Business activity in India expanded robustly in May. Exports rose at a record pace along with the sharpest job addition rate in nearly 18 years. The manufacturing PMI was 58.4, down slightly from April but still the highest in the world. Firms experienced a sharp upturn in orders and scaled up their production accordingly. India now has some of the highest inventory levels in almost two decades.
In April, India’s auto retail sector surged 27%, which was attributed to stable fuel prices and new model launches by various companies. Two-wheeler sales rose by 33%, cars by 16%, and commercial vehicles by 2% on a year-over-year basis.
Company-wise, April sales for Toyota grew by 32%, Hyundai by 9.5%, Suzuki by 5%, and Tata Motors by 11.5%. According to the Society of Indian Automobile Manufacturers (SIAM), in the 2023-2024 fiscal year, the Indian car market saw an increase in market consolidation. The top six brands of passenger vehicles consisted of Maruti Suzuki, Hyundai, Tata Motors, Toyota, Kia, and Mahindra, accounting for 92.6% of domestic sales.
During the year, India witnessed a significant rise in exports of electronics goods, reaching a notable value of $29.12 billion, a growth of 23.6% over the previous year. The United States, United Arab Emirates, the Netherlands, the U.K., and Italy emerged as the top five export markets for Indian electronic goods. Smartphones are now the fourth-largest export item from India, growing 42% to $15.6 billion.
India is presently Apple’s second-largest manufacturing hub for iPhones outside of China. Apple manufactures about 15% of its global production in India. The number is expected to rise to 26% by 2026. Value-wise, overall annual production has reached $14 billion with exports exceeding $10 billion.
A few recently announced projects and investment news items are listed below for your reference:
Stellantis and Leapmotor announced a major global expansion, with Leapmotor set to enter the Indian market by Q4 2024. This move is part of China-based Leapmotor International’s broader strategy to bring affordable EV technology worldwide.
Mahindra & Mahindra is planning to invest around $4.5 billion over the next three years to boost their auto business ($3.3 billion), farm business ($600 million), and services business ($600 million).
Mahindra Susten, the renewable energy arm of the Mahindra Group, plans to invest $2.5 billion over the next five years to develop a renewable energy portfolio totaling 5.5 GW.
TVS Motor Co. has a $125 million capex plan for the next year. The investment is earmarked for the introduction of a new series of both two-wheelers and three-wheelers spanning both the gas and battery-powered segments.
Siemens Mobility is investing an undisclosed amount to establish a metro train manufacturing facility in Aurangabad. The facility, complementing the existing bogie manufacturing unit, will serve as an export hub for metro turnkey projects worldwide.
Escorts Kubota Ltd. plans to invest around $600 million over the next three to four years to set up a new manufacturing plant. The plant will double their domestic tractor production to 340,000 units annually. The expansion would involve gradually establishing new engine and construction equipment lines.
Dixon Technologies will produce Alphabet Inc.’s high-end Google Pixel 8 smartphones in India. The initial batch of India-made phones will be available in September.
Israel’s EVR Motors, known for high-power-density electric motors, has inaugurated its new greenfield plant in Manesar, Haryana, under its subsidiary, I.EVR Motors. This facility is the first manufacturing operation in India by the Israeli automotive firm.
Want to test out the Indian market? What better way to learn and establish leads than to participate in the IMTEX 2025 show in January? AMT will host a USA pavilion at the show. IMTEX is one of the largest manufacturing technology shows in Southeast Asia. Further details can be found here. Members interested in participating in the event can apply for booth space using AMT’s booth space application. Space is running out, so act fast. Feel free to reach out to me or my colleague Achilles Arbex at aarbex@AMTonline.org for more information.
For more information, please contact Arun Mahajan at AMahajan@AMTonline.org.
