EkaLore regularly posts about India’s unique marketplace and conditions that make it an increasingly important player in global tech. You can find more here at www.ekalore.com/india-business
The Indian government is actively pushing measures to fence off the growing EV market from Alien Invasion. In a few years' time, the Indian domestic vehicle market may be double the French market space. It is already larger than the German market space and continuing to grow.
The nature of a Dynamic India is a push to have critical technologies in Make in India marketspaces. Global enterprises such as Mercedes Benz use India as a key development location. Access to the domestic Indian EV market space is a key consideration for global enterprises.
Despite its many advances elsewhere globally, Tesla has not expanded into India during 2022. Indian government import tariffs, bureaucracy, and costs to enter the Indian market are keeping Tesla out as an Alien Invader. SAIC, a Chinese manufacturer, has also not been able to become an Indian market space participant at less than 1% share. The Indian government has clearly favored vehicle manufacturers wishing to enter the Indian market who also put manufacturing facilities in government-preferred areas.
Mercedes Benz has begun selling a premium-level EV (EQS) in India. The EV is assembled in India (Chakan, Pune) without a substantial base of domestic India content suppliers. Indian government tariffs distinguish between vehicles “assembled” rather than “completely built”. Matching the demand in the premium segment marketspace the MB facility has a full capacity per year estimated at 20,000 vehicles. Initial employment of less than 200 is geared to produce about a 7,000 vehicle-per-year run rate. Two shifts are producing vehicles with seasonal peaking in demand.
The VW Group of brands has also seen reverses in the Indian vehicle market. VW Group brands sold more than 100,000 vehicles combined in the early 2010s and then have seen steady drops in revenue and volume to less than 1% of global revenues (in a market larger than the German home market). VW sales have not been growing rapidly even with limited manufacturing and distribution facilities growth in India. VW Group has set a modest set of goals of 3% marketspace share while only participating in selected market segments with its own brands.
More domestic Indian production is coming as major market manufacturer Mahindra has allied itself with VW Group to use, initially foreign-built, EV platform components in locally produced EVs. Tata Motors is estimated to be the largest EV producer in India although the sales base is tiny at less than 5,000 vehicles per month. The development of an EV component supply chain in India is an obvious preferred outcome for a Dynamic India though likely only a long-term prospect.
Additional global entrants or participants in the Indian market space include Maruti-Suzuki, Honda Cars (India), Toyota Kirloskar, and others from Korea and China.
The Indian government's “Make in India” initiatives are a part of conscious policy choices to protect a domestic market and grow local domain knowledge and manufacturing know-how. Indian vehicles are not yet ready to compete in first-world global markets and are not market participants in China, Japan, or the USA. Indian R&D (see EkaLore release at bit.ly/3W6grfn ) and low-cost components will probably get to those markets first.
For now, the Alien Invaders are still looking in from the outside of the Indian vehicle markets.
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