Reuters, November 5 report, Japanese automakers are accelerating their layout in the Indian market, aiming to get rid of reliance on China's supply chain and capture the benefits of the world's third-largest automobile market. From 2021 to 2024, Japan's annual direct investment in the transportation industry in India increased by more than seven times. At the same time, Japan's direct investment in the transportation industry in China fell by 83%. The increase and decrease highlight the shift in the focus of Japanese companies' layout. Recently, Toyota Motor, the world's largest car manufacturer, and Suzuki Motor, which has a market share of nearly 40% in India, have separately announced plans to invest $11 billion in the Indian market to strengthen manufacturing and export capabilities in India. In addition, Toyota is working with Japanese and Indian suppliers to reduce costs and expand production of hybrid powertrain components, aiming to increase its market share in India to 10% by 2030. In 2024, Toyota has announced an additional investment of over $3 billion in its existing factory in southern India, and is building a new factory in western Maharashtra, expected to start operation by 2030. This move is expected to push Toyota's production capacity in India to over 1 million units. Honda said it plans to build a production and export base for the Honda 0 series electric vehicles in India, further expanding its four-wheel passenger vehicle business in India. Analysts point out that there are four reasons for Japanese companies to accelerate their entry into India: first, India has a rich labor force and low production costs, providing convenience for local production; second, the Modi government has introduced a series of incentive policies to actively attract manufacturers to serve the domestic and global markets; third, the characteristics of the Indian market being closed to China help Japanese companies avoid direct competition with Chinese automakers, while Japanese companies can also form a "downward strike" advantage in the game with Indian local automakers such as Tata and Mahindra.
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