JOIN USSuzuki, Hyundai looking at India as their export hub
Influenced by the Centre’s decision to boost manufacturing in the country, automakers Suzuki and Hyundai are charting plans to make India a global leader in vehicle exports and a hub for sourcing of auto components, according to Mint report.
These initiatives come as a push for auto companies to have multiple sourcing hubs and not be dependent on China after these cos suffered massively when the Covid-19 pandemic shutdowns roiled the global supply chain.
Suzuki is considering India as the sole production location for its popular hatchback -- Swift -- and may even discontinue manufacturing the car in Japan and other locations, two people in the know told the publication.
The company, the parent of Maruti Suzuki India, may approach its sports utility car Jimny with the same strategy.
Similarly, Hyundai is contemplating a move to make India one of its global sources for auto parts and vehicles. The South Korean carmaker wants to move away from China for its supply needs, the second person is quoted as saying in the report. This means that India will be the main source for auto parts in Hyundai's current or upcoming factories in the ASEAN region. The auto giant will also use India for its parts requirement in South America and Eastern Europe, which would be a big boost for India as a manufacturing hub.
“If Suzuki finally decides to make India the sole hub for production (of Swift), then exports of Maruti is expected to benefit immensely. Also, given its production capacity in India, financially it will make sense as well," the person told the paper.
To reduce dependency on Chinese imports, the Centre in November rolled out a Rs 3 lakh crore-incentive package to encourage local manufacturing, of which the biggest chunk will go to the auto sector.
Hyundai’s sister company, Kia Motors, also has ambitious plans to make India its export hub in the coming years.
Suzuki wants to cash in on the government benefits to make India the sole production site of other products as well.
“For Hyundai, India will play a bigger role when it comes to supply of parts to destinations in South America and Eastern Europe like Brazil, Slovakia, and others. India is already one of the regional headquarters and, post-covid, it will be a regional hub for procurement of parts for other countries," the report quoted one of the sources as saying.