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India: Clusters of motor vehicle industry

Colley Hwang, DIGITIMES, Taipei 0

The development structure of the Indian motor vehicle industry is related to its traditional industrial environment. We can come up with the structure of the Indian industry from the distribution areas of the motor industry. The development of the modern industry has evolved from its traditional path. There are three major clusters in the north, west, and south respectively.

Along the east of the Ganges River lies the Gangetic plain as India's most fertile land naturally perfect for farming. Despite this, Bihar and Uttar Pradesh are the most impoverished states in India, since most of the lands do not belong to farmers. Kolkata sits on Ganges Delta where Brahmaputra River discharges into the sea. Originally home to the governor's mansion of the British colonial government, Kolkata was also inhabited by some Chinese.

Southeast India is home to the Tamils. The main cities in this industrially-developed region include Chennai, Bangalore, Hyderabad, and other large cities. Hyderabad wants to develop its own semiconductor industry. Located at an altitude of more than 900 meters on the Deccan Plateau, Bangalore is known as India's Silicon Valley. Many hi-tech enterprises have R&D centers here including Intel, Samsung, Toshiba, and Qualcomm. Chennai is a coastal city. The French established a stronghold in Pondicherry, south of Chennai, which is considered hometown of ethnic Indians living in ASEAN. India's third-largest motorcycle firm TVS has its headquarters in this region. TVS is also an exclusive agent of GM, Mercedes-Benz with service agencies in many states of India. These are prerequisites to run businesses in India.

Since India does not have universal tax policies, national brands are bound to set up offices or agencies in different states to pay taxes according to different tax laws. Therefore, foreign companies must collaborate with local partners with national presences if they are seeking to roll out business operations in Indian.

Delhi is the hub of India's northern industrial cluster. As India's capital, New Delhi has a population of 25 million. Gurgaon and Noida are industrial and commercial cities. Gurgaon is an emerging metropolis, but it is also India's most polluted city. The northern state of Haryana near the capital New Delhi has seen booming industrial development in recent years. Many foreign investors have been flocking to Noida: Samsung has set up a mobile phone factory, and MediaTek's R&D center has nearly 1,000 engineers. Offices of mobile phone brands such as Micromax and Lavas and startups are springing up. The promising cluster effect is appealing to industrial players looking for production bases.

The western clusters are scattered around Mumbai, Pune, and Goa. The Persians set out on their voyage along this centuries-old route to the south with help of the monsoon. To the north of Mumbai lies Gujarat state home to prime minister Modi. Ahmedabad, the capital of Gujarat, is the hub of the shipbreaking and petrochemical industries.

India's motor vehicle industry will develop on the foundation of industrial clusters. Foreign enterprises must make good use of the industrial base of the past. Local business environments and practices have been formed along with a variety of relatively complete infrastructure. Foreign enterprises seeking to operate in the Indian market can generally develop a roadmap based on highlighted points to operate in the Indian market.

Credit: DIGITIMES

(Editor's note: This is part of a series of analysis on India's industry and market by DIGITIMES Asia president Colley Hwang.)

Colley Hwang, president of DIGITIMES Asia, is a tech industry analyst with more than three decades of experience under his belt. He has written several books about the trends and developments of the tech industry, including Asian Edge: On the Frontline of the ICT World published in 2019, and Disconnected ICT Supply Chain: New Power Plays Unfolding published in 2020.
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