Auto Sector To Roll Out 10.1% Salary Hikes In FY26, Beating Industry Average: Report

Some automotive companies have already concluded their performance evaluations and salary decisions by March 2025, while others plan to complete the process after June

Boosting the sector’s momentum, automobile exports jumped 19 per cent in FY25, reaching 5.3 million units, up from 4.5 million the previous year

Source : PTI

India’s automotive industry is expected to grant an average salary hike of 10.1 per cent in the financial year 2025–26 (FY26), according to Deloitte’s latest ‘Performance and Rewards Trends Study’ for automakers, as reported by The Economic Times. This anticipated raise outpaces the average 8 per cent increment projected across other sectors, signaling the industry’s continued demand for specialised talent.

Some automotive companies have already concluded their performance evaluations and salary decisions by March 2025, while others plan to complete the process after June, aligning with their respective fiscal year-end schedules.

EV And Tech Roles Fuel Salary Upsurge

The push towards electric mobility and digital transformation is reshaping the sector’s talent landscape. Human resources executives at Hyundai Motor India Ltd (HMIL) and Skoda Auto Volkswagen India Pvt Ltd pointed to a strong surge in hiring across electric vehicle development, R&D, automation, and roles involving artificial intelligence and machine learning as a key reason for the substantial pay increases.

The report also suggests that top performers in the industry may receive increments exceeding the average 10.1 per cent, reflecting the sector’s growing appetite for high-impact talent.

Sustained Double-Digit Hikes In The Auto Industry

Commenting on the trend, Neelesh Gupta, Partner at Deloitte India, noted that FY26 would mark the fifth consecutive year of double-digit pay hikes for the automotive sector. However, he cautioned that while the hikes remain strong, the pace has been slowing over the past three years. FY25 saw a slightly higher average increase of 10.5 per cent, but even the revised FY26 estimate continues to outpace the 8.8 per cent projected average across Indian industries.

Export Growth Bolsters Industry Confidence

Boosting the sector’s momentum, automobile exports jumped 19 per cent in FY25, reaching 5.3 million units, up from 4.5 million the previous year, according to data from the Society of Indian Automobile Manufacturers (SIAM). Passenger vehicle exports alone grew 15 per cent to 770,364 units, marking the industry’s strongest export performance to date, driven by a surge in global demand for vehicles manufactured in India.

IT Sector Faces Slower Wage Growth

In contrast, the IT services industry is likely to see more conservative pay increases in FY26. Amid macroeconomic uncertainties and evolving skill demands, average hikes are expected to fall between 4 per cent and 8.5 per cent. This subdued outlook reflects an industry adapting to automation, AI integration, and a growing emphasis on cost efficiency and sustainable compensation models.