Toyota, Honda, invest billions to make India new car production hub. Turb away from China. | investingLive

Japanese automakers are increasingly turning India into a key production and export hub as they shift away from reliance on China. Toyota, Honda, and Suzuki are investing billions to expand factories and build new models in what is now the world’s third-largest car market.

An interesting item via Reuters.

Low production costs, government incentives, and barriers to Chinese electric vehicle makers have made India an attractive alternative for Japanese manufacturers seeking stability and growth. Toyota and Suzuki have announced a combined $11 billion in new investments, while Honda plans to make India a base for its next-generation electric vehicles starting in 2027.

Japan’s investment in India’s transport sector has surged more than sevenfold since 2021, while direct investment in China has plunged. Prime Minister Narendra Modi’s government has offered production-linked incentives to encourage automakers to manufacture locally and export globally.

For Japan’s carmakers, India offers not just cheaper costs but a strategic foothold in a fast-growing market largely insulated from Chinese competition — a rare advantage as they battle shrinking margins and rising rivalry elsewhere in Asia.