Indian auto parts makers want Tesla entry to benefit local businesses
NEW DELHI, Aug. 3 (Reuters) – Indian auto component makers want Tesla’s potential entry to benefit suppliers in the country, and one way to do that is for the company to manufacture locally, said the head of the Association of Manufacturers of Automotive Components (ACMA).
Tesla Inc (TSLA.O) chief executive Elon Musk said in July that the company was likely to set up a factory in India if successful with imported vehicles after asking for steep reductions in import duties on electric cars.
The demand, reported by Reuters, has polarized the auto industry in the country and sparked a rare public debate among automakers over whether the easing of import tax rates goes against the grain. pressure from India to promote domestic manufacturing. Read more
“We will always favor localization,” Deepak Jain, president of ACMA, told reporters on Tuesday, when asked about the industry body’s view of Tesla’s request.
“We welcome any foreign or national entry, any expansion of capacity on any vehicle segment as long as it promotes the creation of added value and localization, which gives the opportunity to the components sector to prosper”, did he declare.
Some industry executives argue that India does not have a strong supply chain or domestic production of electric vehicle (EV) components such as motors or lithium batteries and should depend on imports, at least. short term.
Jain said ACMA is in talks with the government to identify EV parts that can be made locally, but also warned that companies may struggle to make big investments at a time when sales have slowed since. more than two years.
ACMA’s comments supporting local production are similar to those made last week by companies like Tata Motors (TAMO.NS), the top-selling electric car in the country, and Ola, backed by Softbank Group (9984.T ), which manufactures electric cars. scooters in India.
However, South Korean automaker Hyundai Motor (005380.KS), which has around 18% of the Indian car market, and German automaker Daimler (DAIGn.DE) Mercedes-Benz are backing the import tariff cuts.
Santosh Iyer, vice president of sales and marketing at Mercedes in India, told Reuters that luxury car customers are the first to embrace new technologies, and once they start adopting electric vehicles, it makes itself felt.
“To give confidence to automakers, if India is able to liberalize the import tax, companies like Mercedes will be able to test the market and choose to make models of electric vehicles locally,” he said. .
Report by Aditi Shah; Editing by Emelia Sithole-Matarise
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