- Sunday, November 24, 2024
By: Shubham Ghosh
INDIA’S auto component manufacturers want Tesla’s potential entry into the country to benefit the suppliers and one way to reach that goal is for the company to make locally, the head of the Automotive Component Manufacturers Association (ACMA) said.
Last month, Tesla Inc chief executive Elon Musk said that the company was likely to set up a factory in India if successful with imported vehicles after it wanted big cuts in import duties on electric ones.
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Reuters reported that Musk’s demand has polarised the country’s auto industry. A debate has emerged among the carmakers over whether easing import tax rates is against India’s goal of promoting domestic manufacturing.
“We will always promote localisation,” Deepak Jain, the president of ACMA told reporters on Tuesday (3), after he was asked about the industry body’s views on Tesla’s demand.
“We would welcome any foreign or domestic entry, capacity expansions on any vehicle segment as long as it promotes value addition and localisation, which gives the opportunity for the component sector to flourish,” he said.
According to some industry executives, India lacks a strong supply chain or domestic production of electric vehicle components like motors or lithium cells and would need to rely on imports, at least in the short run.
Jain said ACMA is in talks with the government to identify those parts of the electric vehicles that can be manufactured locally but also cautioned that firms may struggle to go for large investments at a time when the sales have been slow.
ACMA’s remarks backing local production are similar to those made last week by Indian automakers like Tata Motors which is one of the top sellers of electric cars in India besides Softbank Group-backed Ola, which makes electric scooters in the country.
South Korean automaker Hyundai Motor, which is another major player in the Indian market, supports import duty cuts. German maker Daimler’s Mercedes-Benz also wants cuts in import duties.
Santosh Iyer, vice president, sales and marketing at Mercedes in India told Reuters that customers of luxury cars are early adopters of new technology and once they start taking to EVs, it trickles down.
“To give confidence to carmakers, if India is able to liberalise the import tax then companies like Mercedes can test the market and choose to manufacture EV models locally,” he was quoted as saying by the media outlet.
