Japanese automakers are turning India into a manufacturing and export hub
Japanese automakers are rapidly increasing their investments in India, turning the country into a key manufacturing and export hub, diversifying their operations and moving away from China, Reuters reports.
Toyota, Suzuki, and Honda have announced new projects totaling $11 billion aimed at increasing car production, building new factories, and localizing supply chains. This change reflects India's growing strategic attractiveness: low labor costs, a large consumer base, improved production quality, and strong government incentives under Prime Minister Narendra Modi's "Make in India" program. Meanwhile, Japan's direct investment in India's transport sector has increased sevenfold since 2021, while investment in China has fallen by more than 80%. Toyota is deepening local partnerships, expanding the production of hybrid components and aims to occupy 10% of the Indian passenger car market by 2030. Suzuki aims to increase production from 2.5 to 4 million vehicles per year and strengthen exports through Maruti Suzuki, the Indian market leader. Honda plans to make India the global base for its future electric vehicles "Zero series" from 2027.
Another factor influencing Japan's change of course is India's closed position towards Chinese electric vehicle manufacturers such as BYD, which deprives Japanese brands of direct competition. Although challenges remain, especially from growing domestic players such as Tata Motors and Mahindra & Mahindra, India is emerging as Japan's best alternative to China for the growth of the automotive industry and global exports.