Japanese Automakers Expand Production in India

Japanese automakers Toyota, Honda, and Suzuki are investing a combined $11 billion to expand vehicle production and exports in India over the next several years.

Since 2021, Japan’s investments in India’s transportation sector have grown sevenfold, reaching 294 billion yen ($2 billion) last year, while funding to China dropped by more than 80% over the same period. This shift could be attributed to the fierce price competition and declining profits in China’s electric vehicle market.

India is emerging as a major global auto manufacturing hub due to lower labor costs, government incentives, and a large skilled workforce. This transference is expected to reshape where automotive components are sourced and assembled (including power semiconductors, inverters, sensors, and control modules).

Suzuki plans to increase its Indian production from 2.5 million vehicles per year to 4 million, while Toyota aims to exceed 1 million units annually and introduce about 15 new or refreshed models by 2030. Meanwhile, Honda will use India as a base for one of its upcoming electric car models, with exports expected to begin around 2027.

We can expect growing demand for automotive-grade components in India. Suppliers that previously focused on China may need to adjust their strategies to serve India-based assembly lines and adapt supply chains to evolving geopolitical and economic realities.