In the recent past, major automobile manufacturers have been expanding their bases to India due to the economic conditions that are ideal for business. As the input costs of setting up manufacturing facilities are relatively lower in the country, major auto companies are preferring to export vehicles to other markets from India. A few examples of major companies that have chosen India over China to manufacture vehicles are Harley-Davidson, KTM and Mahindra & Mahindra. Also to mention, the new found phenomenon of exporting vehicles made in India to China is on a rise, which is glaring to see.
Talking about the Austrian bike manufacturer, KTM is planning to export two products that are made in India to Chinese market as Completely Knocked Down (CKD) units. During the initial stages, the company is aiming to export over 10000 CKD units of its bikes in China each year. The high-specifications bikes that are intended to be manufactured in India while exported to China are Duke 200 and Duke 390, both of which are built at Chakan facility in Pune.
Affirming to the plans, S Ravikumar, Senior Vice President for Business Development, Bajaj Auto, said, “The China strategy for KTM is clear. They want to target the niche upper end of the motorcycle market in China. They are not interested in the lower end where there are many players and huge volumes. We expect there to be a large market for high-end bikes in China.” Stefan Pierer, CEO, KTM Motorcycles AG, said, “We are in the process of setting up an assembly unit in China, which is expected to be commissioned sometime next year.”
Another major bike manufacturer, Harley-Davidson is also planning to follow the same lines. The company had recently announced that it will be producing the new Street models from its facility in Bawal (Haryana) to sell them in other major markets. At present, Harley-Davidson does not have any manufacturing facilities other than U.S., Brazil and India. Recently, Anoop Prakash, Managing Director for Harley Davidson India, was quoted as saying, “Harley Davidson has developed the Street platform after a gap of 14 years. Both Street 750 and Street 500 will be manufactured in India, the only other production hub for the models apart from Kansas in the US. These bikes will be exported from India to markets in Europe and Asia, including China.”
Reportedly, the production and exports of both the models are based on Street platform and are expected to commence in India from 2014. Recently formed, Mahindra Reva is also eyeing the opportunities for exporting electric vehicles to China. As the Indian Government phased out incentive policies on electric vehicles, the company sold 400 units of e2o since March 2013, a figure that it aimed to achieve every month. Interesting, the Indian auto company is aiming to sell its products in high volume markets like China in the next year. Also, Mahindra Reva is planning to manufacture European specification variants of e2o, which will be offered at a later stage in 2014.
