India, the New Automotive El Dorado

The announcement and then the arrival onto the market of the world’s cheapest vehicle, the Nano, were both received by the automotive world with certain distrust. Still, as time passes, carmakers around the world are having, one after the other, an epiphany: India can build cars, and cheap.

As a result, more and more of them are looking into outsourcing production into the country. The most recent example, Ford, has already announced it is getting close to opening the new assembly lines at their Maraimalai Nagar facility and launch a new small car for both the Indian market and the world.

But the list is much longer, Autonews reports. "Apart from the obvious cost advantages, India has a good base of component suppliers who come with the experience of having supplied to global car companies," Deepesh Rathore, auto analyst with IHS GlobalInsight told the source. "India is in a strong position at the moment to be an exporter."

American manufacturer GM plans to export 20 percent of the output from its plant in Maharashtra by 2011, the year in which it will be fully operational.

Suzuki, together with local subsidiary Maruti Suzuki, will pump $300 million on building a small-car research and development center in India, while the Japanese who lead the top of the worlds’s biggest carmakers, Toyota, will also create a compact car for the, at first, local market.

To complete the list, the Koreans from Hyundai are already exporting most of their Indian output, but plan to bring the country to the core of their exports.

"All big companies have created capacities here. So when they have the capacity, it has to be utilized. Until the domestic demand picks up, these cars will be exported," P. Balendran, GM marketing vice president said.