IT, ER&D firms hit by auto sector downturn in Europe

The downturn in the European automotive sector has cast a shadow over the auto engineering business for leading Indian software service providers and engineering, research and development (ER&D) firms in the first half of FY25.

Key IT services players like Tata Consultancy Services (TCS), Infosys and HCLTech posted weaker demand from their automotive clients, driven largely by the European market’s challenges with supply chains, shifts in regulatory needs, poor macroeconomic conditions and rising cost pressures weighing heavily on the sector.