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New Delhi: Global auto companies are increasingly leveraging India as an export hub with Honda even shipping cars to its home market Japan and Suzuki set to follow suit later this year, driven by a growing base of quality suppliers in the local market that’s helping them manufacture vehicles at a competitive cost in the country. Japan has traditionally been a major producer and dominates vehicle exports globally, having shipped 5.97 million units in 2023.
India is the sole production hub for Honda’s Elevate SUV, which is sold as the WR-V in Japan. The seven-seater SUV Meridian made in India by Jeep, part of the Stellantis group, is sold as the Commander in Japan. Suzuki’s India subsidiary Maruti Suzuki, which is gearing up to produce its first electric vehicle (EV) later this year, will export the first lot for sale in Japan and Europe.
India’s largest carmaker Maruti Suzuki has been stepping up exports over the last few years. It intends to ship to Japan the “new EV and more products” made in India in the coming months, said Rahul Bharti, executive director, corporate affairs. Plans are also afoot to export the five-door Jimny to Japan. A three-door version is made in India only for export.
While Toyota is yet to firm up plans to export vehicles from the country, it is shipping high-end components including e-drives for its range of hybrids. The e-drive or transaxle combines the electric motor, differential, axle and brake into an integrated assembly.
“The reason why we send our cars to Japan is because the quality of product and the competitiveness is such that it does well in Japan,” said Aditya Jairaj, managing director and CEO, Stellantis India, home to the Citroen and Jeep brands. “Their quality standards are so high, not every plant can send vehicles there, and we qualify.”
Along with Japan, Jeep is also looking at the possibility of exporting vehicles to Southeast Asia and South Africa.
Cost Advantage
“With its cost advantage and commitment to high-quality output, coupled with a robust ecosystem of suppliers and partners, India has emerged as an attractive manufacturing hub,” said Kunal Behl, vice president, Honda Cars India. This reflects Honda Motor Co’s “strong belief” in delivering top-quality products from its Indian operations to global customers, he said. Exports of the Elevate to Japan began in December 2023.
India is the sole manufacturing hub for the Honda Amaze and Elevate models, he said. While the Japanese carmaker ships its entry-level Amaze sedan from India to South Africa, Nepal and Bhutan, the Elevate is exported to Japan, South Africa and Nepal.
India currently is the world’s third largest automobile market, presenting manufacturers with opportunities in both domestic sales and exports. The country’s safety and emissions regulations are at par with global standards, opening up the scope for global sales.
Honda aims to establish India as a “key export hub in its business globally”, Behl said. While the proportion of exports is likely to remain at about 30%, absolute volumes will rise over the next few years as total sales go up on the back of new model introductions.
“It is the best case point of India’s emergence as a global manufacturing hub of strategic importance,” said an email from Toyota.
