Traffic jams in India are bad. Indians want cars and trucks that will make things worse. India is now a key market for growth. China has been a focus for global manufacturers for decades. Now, fierce competition is making traditional, and new, enterprises look to India. "Make In India" is a goal. Make money from India is what foreign enterprises want. Here, EkaLore talks about what's needed.
This is a continuation of the post Dynamic India: Manufacturing and Marketing. The first post described the vehicle market changes due to the introduction and transition to EVs. While the size of China’s market and its buying power have helped shape that transition, its held traditional ICE manufacturers at bay. India looks to be a similarly sized market that will continue to grow for the foreseeable future.
The conflict of goals for India pits the interests of a Dynamic India against the rushing needs of traditional, and newer, manufacturers. "Make Money" is a pounding message for all global manufacturers. The push for EV/NEV's in the EU, USA, Japan, and China are lowering profits from traditional platforms. "Make In India" could see large employment using ICE technology vehicle platforms. A Green Transformation will take longer to cover India and the ICE vehicles may have a longer lifetime. The goals are not yet aligned for India's marketplace.
Tesla Motors has had huge success by manufacturing in China. High tariffs (up to 100%) have kept Tesla from becoming a competitor in the Indian market. The possible advantages of an Indian-based manufacturing plant are highly attractive as exports from Indian manufacturing were only 600,000 units in 2022. A combination of a huge domestic Indian market and potential exports to other Asian and African markets is an incentive for global enterprises to look more deeply at an Indian capacity.
India is also racing to use the advantages of a Dynamic India against other jurisdictions. Vietnam (VinFast) is beginning to build a manufacturing capacity. Thailand has been selected by some global manufacturers as a ‘near-China’ low-cost location. Indonesia is using the rich deposits of nickel and minerals to lure higher-level processing, battery and metals production, and possibly vehicle brands to manufacture there. The competition places new demands on the Indian commerce landscape to compete in global opportunities.
India desires to compete for global vehicle manufacturing and build a sustainable industrial base using the advantages of a Dynamic India. The success of “Make in India” luring Apple to expand to serve the domestic and export markets is a strong policy narrative for government and industry. The disruption of global vehicle markets for software-defined product platforms is the opportunity for building a long-term success story for Dynamic India.
Dynamic India stands to gain share and attention as it looks to be an easier market to play for outside manufacturers. Foreign enterprises must discover if the marketplace and competition will be kinder than China and the USA.
If you’d like to see more articles that talk about Dynamic India’s unique capabilities, you can see more posts at www.ekalore.com/india-business
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