Made-in-India cars are now competing with China's dominance in Europe
India is emerging as a major player in the global automotive industry, especially in the electric vehicle (EV) segment. According to a report by Nikkei Asia, several global automakers are ramping up car exports from India to Europe. This comes after their recent success in Japan and marks a major shift for India's manufacturing facilities which have primarily catered to Latin America, Africa, and the Middle East.
India: A low-cost global manufacturing hub
The increase in shipments to Europe and the UK highlights India's growing importance as a low-cost global manufacturing hub. Major car manufacturers like Suzuki and Honda have recognized India's strategic role in their global production strategies, including for electric vehicles. This comes amid increasing competition from Chinese manufacturers.
Surge in car exports to Europe and Japan
Between April and August, car exports from India to the UK, Germany, Spain, and Norway were worth $63 million. While this only accounts for 2% of total exports, it is nearly nine times the shipments made in the previous fiscal year. The trend mirrors a similar surge in Japan where car exports skyrocketed nearly fourfold to $813 million in the fiscal year ending March.
India offers cost advantage for manufacturing
India's cost advantage for manufacturing has been highlighted by Rahul Bharti, Maruti Suzuki's Senior Executive Officer for Corporate Affairs. He said a skilled workforce, good infrastructure, and reliable suppliers help produce high-quality products at low costs. This makes operations more competitive and optimizes resources. Maruti Suzuki plans to invest $7.7 billion by 2031 to increase its annual manufacturing capacity in India from 2.5 million to four million units.
Global automakers are investing in Indian auto industry
Hyundai Motor and Toyota are among the global automakers investing heavily in India's auto industry. Hyundai plans to invest $5 billion by 2030 while Toyota has signed an MoU with Maharashtra to invest over $2.25 billion on new factories. These investments are part of a larger strategy by manufacturers to reduce dependence on China for production and sales.
India's auto market is shifting toward SUVs
India, the world's third-largest auto market, is witnessing a shift in consumer demand from hatchbacks to globally appealing SUVs. This change is backed by a $2.9 billion government program to boost local vehicle and component production. Experts believe India-made cars could be competitive alternatives to Chinese vehicles whose market share in Europe is expected to double by 2030.
India is a credible counterweight to China's momentum
Harshvardhan Sharma of Nomura Research Institute said the competitive landscape is changing as Chinese manufacturers scale rapidly with sharply priced EVs and compact ICE vehicles. In this context, India is emerging as a credible counterweight - a cost-competitive, value-rich manufacturing base that global automakers can leverage to respond to China's momentum. Exports from April to October reached 514,622 units accounting for nearly 67% of total shipments in FY25.