Japanese carmakers push $11 billion investment collectively in India
Japanese carmakers are looking at India as the perfect place to make a manufacturing and export hub, as brands try to slowly pivot away from China.
New Delhi: Japanese auto giants Toyota, Honda and Suzuki together have invested around $11 billion in India, making it one of the country’s biggest-ever foreign investments in the automobile sector. This shows India to be emerging as a hub for manufacturing and export, with global automakers trying to reduce reliance on China.
India’s combination of low costs, along with a skilled workforce and very supportive government policies, have brought in a record attention from Japan’s auto industry. Suzuki controls about 40 per cent of India’s car market, will invest around $ 8 billion to boost production to 4 million vehicles yearly. Toyota is planning to add another $3 billion, expanding their hybrid component supply chain and building a new plant in Maharashtra.
Honda isn’t too far down the line, and they have promised to make India an export base for their upcoming Zero Series electric car, which is set to roll out in 2027.
What Japanese carmakers are targeting?
For Toyota, there are 15 new launches or updated models in India by 2030, targeting a market share increase from 8 to 10 per cent. Their latest investments will lift capacity to over 1 million vehicles a year. Suzuki is targeting to transform Indian into their global export base, using Maruti Suzuki’s dominating domestic presence and overseas markets, and company president Toshihiro Suzuki confirmed this recently.
For Honda, the aim is to become central to their global car strategy. CEO Toshihiro Mibe recently noted that India, alongside the US and Japan, is three of Honda’s top three car markets.
The global car makers are seeing the government incentives and restrictions on Chinese investment as the perfect catalyst for them to invest in India. The Indian market is attractive, and the auto industry last fiscal year produced 5 million passenger cars, with exports of close to 15 per cent.
Of course, there is a challenge with the biggest one coming in the form of Tata Motors and Mahindra and Mahindra, who are capturing the growing SUV demand and cutting into Suzuki’s market share. However, the outlook remains positive as Japanese automakers deepen localisation and better their long-term foothold.