Toyota, Honda, and Suzuki Turn India Into a New Production Base From China

Japanese automakers Toyota, Honda and Suzuki are increasing their investments in India as part of a wider move to diversify manufacturing away from China. The companies are spending billions of dollars to expand production, build new factories and develop export bases in what has become the world’s third-largest car market.

Growing Investment in India

Toyota and Suzuki have announced investments worth around $11 billion to expand manufacturing and exports. Honda has also confirmed that India will become a key production and export base for one of its new electric vehicle models. The country’s lower costs, large workforce and rising manufacturing quality have attracted major interest from Japanese carmakers.

Decline in China Investments

Japan’s direct investment in India’s transport sector increased more than sevenfold between 2021 and 2024, reaching 294 billion yen ($2 billion). Over the same period, Japanese investment in China’s transport sector dropped 83% to 46 billion yen. This marks a significant shift in focus as companies reduce exposure to China’s slowing market and ongoing competition from domestic EV manufacturers.

Toyota’s Expansion Plans

Toyota plans to launch 15 new and updated models in India by 2030, including SUVs and hybrid vehicles. The company aims to raise its passenger car market share from 8% to 10% and deepen its rural presence with smaller dealerships and workshops. A new factory in Maharashtra and expanded operations in southern India will take its total annual capacity to over 1 million vehicles.

Honda and Suzuki 

Honda will begin production of its new “Zero Series” electric cars in India, with exports planned to Japan and other Asian markets from 2027. Suzuki, through Maruti Suzuki, is investing $8 billion to boost capacity from 2.5 million to 4 million units annually.

India’s Auto Growth

India produced about 5 million passenger vehicles last financial year, with 800,000 units exported, a 15% rise from the previous year. Domestic sales grew 2%, supported by steady economic growth averaging 8% over the past three years and government incentives to attract foreign manufacturers.

Read More: Renault India Reports 21% Sales Increase for October!

Conclusion

Japanese automakers are steadily turning India into a regional production base as they scale back operations in China and focus on expanding output and exports from India.

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