Why Are Auto Giants Shifting Their Manufacturing Hub to India?

Auto giants are shifting their manufacturing hubs to India for several compelling reasons:

  1. Cost Efficiency: India offers lower labor and production costs compared to other major manufacturing regions, making it an attractive destination for cost-effective manufacturing.
  2. Growing Market: With a rapidly expanding automotive market and increasing consumer demand, India presents significant growth opportunities for automotive companies looking to tap into a large and emerging market.
  3. Government Incentives: The Indian government provides various incentives and support under schemes like the Production Linked Incentive (PLI) scheme, aimed at boosting domestic manufacturing and reducing import dependence.
  4. Strategic Location: India’s geographical location provides easy access to key markets in Asia, the Middle East, and Africa, enhancing logistics and distribution efficiencies.
  5. Skilled Workforce: India has a large pool of skilled engineers and technicians in the automotive sector, contributing to high-quality manufacturing and innovation.
  6. Infrastructure Development: Ongoing investments in infrastructure, including roads, ports, and industrial parks, improve logistics and operational efficiency for manufacturers.
  7. Market Diversification: By establishing manufacturing hubs in India, auto giants can diversify their production bases, reducing dependency on their home countries and mitigating geopolitical risks.

Tecnova supports automotive companies in this transition by providing insights into regulatory requirements, assisting with local partnerships, and offering strategic guidance to optimize manufacturing operations and leverage India’s market potential effectively.

Three major Asian countries India, Japan, and Australia, launched Supply Chain Resilience Initiative or SCRI, with a vision to prioritize certain sectors. The considered sectors include automobiles, petrochemicals, IT services, and others. As a result of this initiative, Japanese giants are shifting their manufacturing hub in India. This move is also encouraged by financial assistance from the Japanese Government and the favorable manufacturing conditions offered by India.

Major companies are considering shifting their manufacturing base in India due to the unusual disruptions in global supply chain management after the COVID-19 pandemic. Among the ‘MITI-V’ countries, India is slightly at the forefront of the race due to favourable market demand, Government initiatives, and extensive support from experienced manufacturing consultants India.

According to reports, from FY16 to FY20, the value of auto components in India increased from USD 10.83 billion to USD 14.5 billion. Apart from this, India offers a cost-effective manufacturing base. Additionally, compared with Europe and Latin America, the manufacturing costs are 10-25% less in India.

So, India, the world’s 4th largest vehicle market, is booming in the auto sector and is expected to reach USD 300 billion by 2026.

India- The Alternative Global Manufacturing Hub for Foreign Investors

India, often considered China’s competitor for the manufacturing sector, is looking for the next big thing in the manufacturing industry. An example includes Japan. The Japanese Government has proposed to offer approximately 23.5 billion Yen (About USD 217 million) for the companies looking to shift their manufacturing base to other countries.

India is certainly a favourable choice for most foreign companies due to its cheap labor costs and attractive Government initiatives. Despite the pandemic, the automobile export shot up in the first half of 2021. As per reports the first half of 2021, automobile exports achieved the highest performance in the last seven years.

The exports increased by 49.9% year on year to 23.6 billion dollars. It should be noted that companies from US, South Korea, Japan, and other countries are not only looking to shift to India as their manufacturing for its rising economy but also for its demographic advantages.

Apart from alluring advantages, the ‘Make in India’ initiative triggered the ease of manufacturing in India. India is also developing land of 462,000 hectares to attract businesses looking to invest in manufacturing.

How Tecnova Helps Auto Giants Enter and Expand in India

  1. Market Entry Strategy – Tecnova provides in-depth market research and competitive analysis to help auto giants develop a successful India entry strategy.
  2. Site Selection & Setup – Assists in identifying ideal manufacturing locations, handling regulatory approvals, and setting up production facilities.
  3. Regulatory Compliance – Ensures smooth navigation of India’s policies, legal frameworks, and compliance with FDI norms and taxation regulations.
  4. Supplier & Vendor Development – Helps in identifying and onboarding reliable local suppliers and vendors to optimize the supply chain.
  5. Mergers & Acquisitions (M&A) – Supports companies in identifying potential partners, conducting due diligence, and executing acquisitions for business expansion.
  6. Talent Acquisition & HR Solutions – Provides executive search services to recruit top talent for leadership and operational roles.
  7. Manufacturing & Operations Optimization – Offers lean manufacturing strategies, cost optimization, and operational efficiency solutions.
  8. Sourcing & Procurement – Assists in sourcing raw materials and components at competitive prices while ensuring quality standards.
  9. Growth & Expansion Strategy – Develops long-term strategies to scale operations, increase market share, and drive profitability.

Tecnova’s end-to-end consulting ensures a seamless and efficient entry and expansion for global auto manufacturers in India

Tags:

automotive manufacturing consultants India , manufacturing consultants India , Manufacturing consulting firms , Top manufacturing consulting companies India,automotive consulting company in India, automotive consulting firms, automotive consulting in India, Automotive Consulting Services, Automotive Consulting Services in India, automotive industry consultants, automotive management consulting services, Automotive Sector Consulting Firm, best Business Consulting Firms in India, best India Market Entry Strategy, best M&A advisory firms in India, best merger and acquisition firms in india, Boost Business Expansion In India

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Why Are Auto Giants Shifting Their Manufacturing Hub to India?

Auto giants are shifting their manufacturing hubs to India for several compelling reasons:

  1. Cost Efficiency: India offers lower labor and production costs compared to other major manufacturing regions, making it an attractive destination for cost-effective manufacturing.
  2. Growing Market: With a rapidly expanding automotive market and increasing consumer demand, India presents significant growth opportunities for automotive companies looking to tap into a large and emerging market.
  3. Government Incentives: The Indian government provides various incentives and support under schemes like the Production Linked Incentive (PLI) scheme, aimed at boosting domestic manufacturing and reducing import dependence.
  4. Strategic Location: India’s geographical location provides easy access to key markets in Asia, the Middle East, and Africa, enhancing logistics and distribution efficiencies.
  5. Skilled Workforce: India has a large pool of skilled engineers and technicians in the automotive sector, contributing to high-quality manufacturing and innovation.
  6. Infrastructure Development: Ongoing investments in infrastructure, including roads, ports, and industrial parks, improve logistics and operational efficiency for manufacturers.
  7. Market Diversification: By establishing manufacturing hubs in India, auto giants can diversify their production bases, reducing dependency on their home countries and mitigating geopolitical risks.

Tecnova supports automotive companies in this transition by providing insights into regulatory requirements, assisting with local partnerships, and offering strategic guidance to optimize manufacturing operations and leverage India’s market potential effectively.

Three major Asian countries India, Japan, and Australia, launched Supply Chain Resilience Initiative or SCRI, with a vision to prioritize certain sectors. The considered sectors include automobiles, petrochemicals, IT services, and others. As a result of this initiative, Japanese giants are shifting their manufacturing hub in India. This move is also encouraged by financial assistance from the Japanese Government and the favorable manufacturing conditions offered by India.

Major companies are considering shifting their manufacturing base in India due to the unusual disruptions in global supply chain management after the COVID-19 pandemic. Among the ‘MITI-V’ countries, India is slightly at the forefront of the race due to favourable market demand, Government initiatives, and extensive support from experienced manufacturing consultants India.

According to reports, from FY16 to FY20, the value of auto components in India increased from USD 10.83 billion to USD 14.5 billion. Apart from this, India offers a cost-effective manufacturing base. Additionally, compared with Europe and Latin America, the manufacturing costs are 10-25% less in India.

So, India, the world’s 4th largest vehicle market, is booming in the auto sector and is expected to reach USD 300 billion by 2026.

India- The Alternative Global Manufacturing Hub for Foreign Investors

India, often considered China’s competitor for the manufacturing sector, is looking for the next big thing in the manufacturing industry. An example includes Japan. The Japanese Government has proposed to offer approximately 23.5 billion Yen (About USD 217 million) for the companies looking to shift their manufacturing base to other countries.

India is certainly a favourable choice for most foreign companies due to its cheap labor costs and attractive Government initiatives. Despite the pandemic, the automobile export shot up in the first half of 2021. As per reports the first half of 2021, automobile exports achieved the highest performance in the last seven years.

The exports increased by 49.9% year on year to 23.6 billion dollars. It should be noted that companies from US, South Korea, Japan, and other countries are not only looking to shift to India as their manufacturing for its rising economy but also for its demographic advantages.

Apart from alluring advantages, the ‘Make in India’ initiative triggered the ease of manufacturing in India. India is also developing land of 462,000 hectares to attract businesses looking to invest in manufacturing.

How Tecnova Helps Auto Giants Enter and Expand in India

  1. Market Entry Strategy – Tecnova provides in-depth market research and competitive analysis to help auto giants develop a successful India entry strategy.
  2. Site Selection & Setup – Assists in identifying ideal manufacturing locations, handling regulatory approvals, and setting up production facilities.
  3. Regulatory Compliance – Ensures smooth navigation of India’s policies, legal frameworks, and compliance with FDI norms and taxation regulations.
  4. Supplier & Vendor Development – Helps in identifying and onboarding reliable local suppliers and vendors to optimize the supply chain.
  5. Mergers & Acquisitions (M&A) – Supports companies in identifying potential partners, conducting due diligence, and executing acquisitions for business expansion.
  6. Talent Acquisition & HR Solutions – Provides executive search services to recruit top talent for leadership and operational roles.
  7. Manufacturing & Operations Optimization – Offers lean manufacturing strategies, cost optimization, and operational efficiency solutions.
  8. Sourcing & Procurement – Assists in sourcing raw materials and components at competitive prices while ensuring quality standards.
  9. Growth & Expansion Strategy – Develops long-term strategies to scale operations, increase market share, and drive profitability.

Tecnova’s end-to-end consulting ensures a seamless and efficient entry and expansion for global auto manufacturers in India

Tags:

automotive manufacturing consultants India , manufacturing consultants India , Manufacturing consulting firms , Top manufacturing consulting companies India,automotive consulting company in India, automotive consulting firms, automotive consulting in India, Automotive Consulting Services, Automotive Consulting Services in India, automotive industry consultants, automotive management consulting services, Automotive Sector Consulting Firm, best Business Consulting Firms in India, best India Market Entry Strategy, best M&A advisory firms in India, best merger and acquisition firms in india, Boost Business Expansion In India