The Indian automotive sector is shifting toward a digitally intermediated liquidity system, solving the "lemons problem" through engineered trust while causing traditional dealers 90% footfall reductions and 35% margin compression. This hybrid study (doctrinal and Navi Mumbai pilot) uses Chi-square testing to confirm that digital platforms significantly impact dealer cashflows.

Findings reveal that 100% of dealers consider a "Hybrid Phygital" architecture essential for survival as digital trust replaces traditional "touch and feel" heuristics. However, a significant "Regulatory Confidence Deficit" persists regarding algorithmic hegemony. To achieve market equilibrium, the study recommends a Comprehensive Sectoral Law, a Centralized Algorithmic Monitoring Authority, and Digital Dispute Resolution (DDR) tribunals.