For Legacy Automakers, The Future Lies In Combining Heritage And Disruption

The automotive industry is nearly 140 years old. That means “legacy” has taken on a different meaning over the years. In its earliest sense, legacy was defined by engineering excellence, scale of manufacturing and the ability to build vehicles that are capable to stand the terrains. As the industry matured, legacy was more closely tied to brand story, performance, speed of launches and reputation.

Today, legacy is increasingly viewed through the lens of innovation, adaptability and transformation. In an era shaped by new energy vehicles (NEVs), electrification, software-defined vehicles, connectivity, automation and converging mobility, legacy now reflects how effectively it can leverage its heritage while continuously reinventing itself to meet changing customer expectations, regulatory requirements and technological disruptions.

As per Vahan registrations, India sold over 2.5mn EVs, including nearly 222,000 electric passenger cars, representing over 91% year-on-year growth in 2025–26. The demand surge is also driven by government policies to reduce import dependence and enact stricter emission norms.

Furthermore, there is a push from the government for all production vehicles from October 2028 to be complaint with the AIS-230 safety standard, a regulatory framework that mandates vehicle-to-vehicle (V2V) communication systems across Indian roads. The V2V system necessitate a change in the way vehicle architecture is imagined and deployed.

For the latest shifts, the transformation could be broken down into four pillars. First is product, which covers what is being sold and how is it being built. Second is the channel through which the product reaches the buyer. Then comes customer engagement, where the focus is on nurturing the relationship. The last pillar could be the business model itself—focus on how transactions are being enabled.

Product Dynamic

In many ways, the terminology “software-defined” product is unique to automotive and is the single-biggest transformation that is unique to the automotive industry.

The essential need being the physical transfer of a human or goods from point A to point B necessitates a strong hardware-focus, but the radical shifts seen in accelerated product cycles, software-centric design and integration of emerging technologies call for a radically different approach.

Deloitte's 2026 India Global Automotive Customer Study found that 95% of Indian consumers are willing to pay for software-defined vehicle (SDV) capabilities, while 81% consider SDVs helpful and 84% are open to AI-enabled vehicle customisation.

What this means for legacy players is that decades of mechanical and electrical engineering expertise must parallelly coexist with software- engineering capability. The decision is primarily at platform level—what new features require a new platform versus what can we build in an extended legacy platform.

The Channel Refresh

The strength of distribution (dealer +service) network of legacy original equipment manufacturers (OEMs) is a major differentiator for them.

In India, OEM-led company-owned, company-operated models have not taken off the way it was expected to, and it points us to the importance of having the local presence.

However, gone are the days where channel transformation merely implied a corporate identity refresh along with showroom/workshop layout design and branding.

The new game is all about customer-centricity in end-to-end funnel management and post-sales customer engagement which are critical transformation levers.

So, how can the OEM and channel maximise their strengths while maintaining a symbiotic relationship in the new era? For example, OEMs, with their massive data pool, could churn out insights for downstream consumption, while dealers, with their human-customer access, could play additional roles of not just selling cars but selling tied-in products like finance and insurance better.

Customer Engagement

Episodic customer interactions centred around vehicle purchase and service events are passe. The next-gen customer expects the brand to be accessible and proactive, and the interactions to be continuous and seamless.

With a rising share in consumer spending, Gen Z will dominate the conversations on customer experience. While the usual drift would be to “go all digital”, legacy players have an opportunity to balance the opportunity out by offering the best of both worlds.

Customers in automotive, across generations, still have strong preference for touch and feel. The key is to orchestrate a journey that balances system-driven nudges and alerts with genuine context-heavy human interactions. Can dealers alone deliver this? Possibly not. Hence the legacy OEM decision on how to own the end-to-end orchestration of customer experience.

Business Model

The fourth and interesting pillar centres around transaction.

New age players find it easier to go all direct-to-consumer (D2C) or create “feature-on-demand” business models.

With over-the-air is becoming more commonplace, the narrative is shifting to how I can create new value or deliver new features for customers even many months after the actual purchase is made.

A digital platform-based approach helps open up monetisation opportunities. While it is argued that a car is not a “phone on wheels” and hence analogies to how platforms have developed in mobile phones do not apply directly, it is important for us to appreciate that customers increasingly crave choices. This customer ability to “pick and choose” will be an important differentiator for legacy OEMs to drive additional revenue downstream.

Various estimates suggest that recurring sources will account for 15–20% of average vehicle revenue by 2030 globally. India being one of the fastest-growing automotive markets is seeing new players entering and disrupting the way vehicles are sold.

The future will be shaped by the ability to combine both heritage and disruption. For legacy automakers, success will depend on transforming core capabilities into new sources of competitive advantage in an increasingly digital, connected and customer-centric world.

In this context, legacy has shifted from being a measure of longevity to a balance between proven strengths and the ability to remain relevant. Staying relevant is therefore a “here and now” question for legacy OEMs.

(Mahajan is partner and auto sector leader, and Jairaj is partner, Deloitte India)