What is making Ford, Fiat, and Kia put more money in India

• Fiat Chrysler Automobiles announced its expansion plans to boost the local product line-up in India, with a commitment of investing over $250 million. It plans to roll out four new SUVs in 2021.
• Not just Fiat, even the American multinational automaker Ford Motor had expressed plans to expand its presence in India. They are looking to launch four models this year.
• In an exclusive interview earlier with Business Insider, Kia Motors India revealed its plans to make India a global export hub for Kia Motors.
• Nissan is already ramping up its production at its Chennai plant and has plans to add 1500 more jobs.

With new investment plans of over $250 million (₹1,824 crore), Fiat Chrysler (FCA) joins the likes of other multinational giants like Ford, Kia, and Nissan that are already betting big on India’s potential in the coming years. Fiat has announced its mega investment plans to build its presence in the country by launching four new sport-utility vehicles (SUVs) under its Jeep brand over the next two years.

The American multinational automaker Ford Motor has also charted out growth plans in India, and it is going solo too. At the beginning of this year, Ford called off its joint venture with Mahindra and Mahindra (M&M). While the move may affect some plans to launch new variants, Ford remains gung-ho on its India expansion plans and has a slew of launches scheduled for 2021.

Even Kia Motors’ India revealed its plans to make India a global export hub for the auto giant, in an exclusive interview with Business Insider. And Nissan too is no less than its peers, the company is already ramping up its production at its Chennai plant and has plans to add 1500 more jobs.

These announcements come at a time when the pandemic has battered automakers around the world with subdued sentiment and a decline in sales. In fact, the Indian auto sector was witnessing a slowdown and BSVI transition challenges even before the pandemic struck. Japan’s Honda Motor was forced to shutter one of its plants in Noida, while General Motors (GM) stopped producing cars in India for export in international markets.

But that isn’t discouraging these companies. And it opens up more room for competition. Whether in terms of money, setting up newer plants and tech centres, or research & development, Ford, Fiat, and other global auto companies are making a move to grab their share in India’s automotive market.

So what makes India attractive for these automakers?

Fiat’s $250 million India investment plans

Fiat currently holds less than a 1% share of India’s passenger vehicle market but is looking to expand its operations with four new products that will hit Indian roads by the end of 2022. It is determined to increase its locally-made componentry in vehicles produced in its joint venture manufacturing facility.

“Our plans in India are aimed at increasing the value proposition for customers through our products and services, working hard on customer satisfaction and unlocking business opportunities for our business partners,” FCA India Managing Director, Dr Partha Datta said.

The all-new local vehicle line-up includes the 2021 made-in-India Jeep Compass, a locally produced and global-first three-row Jeep SUV, as well as the iconic Jeep Wrangler and next-generation Grand Cherokee flagship, which will both be locally assembled in FCA’s joint venture manufacturing facility in Ranjangaon.

The company’s Jeep brand made its debut in India in 2016 and carved a premium position in India. Fiat is now planning to unveil the 2021 Jeep Compass in India on January 7, and production has already commenced. The luxury seven-seat mid-size Jeep, codenamed H6, will be launched in 2022.

Fiat’s $250 million investment plans in India are in addition to the $450 million they have already committed over the past five years. They have also recently invested in setting up a tech centre in Hyderabad. Fiat aims to create at least 1000 new jobs by the end of 2021.

Ford is betting big on India

The American multinational automaker Ford Motor is expanding its presence in India. From its Focus ST to Ranger Raptor and Figo to EcoSport — the company had a slew of launches scheduled for 2021. And they are all set to go at it solo in India

Ford had signed a joint venture with M&M in October 2019 to produce vehicles for emerging markets. However, on January 1, they pulled the plug on this partnership due to the challenges caused by the COVID-19 pandemic. Ford intends to continue its standalone business in the country.

On January 4, Ford India introduced the 2021 line-up of its compact SUV EcoSport with enhanced connectivity features and an enhanced warranty at a starting price of ₹7.99 lakh.

Kia also has big plans for India

In an exclusive interview earlier with Business Insider, Kia India revealed its plans to make India a global export hub for Kia Motors.

“For us at Kia, the new production-linked incentive (PLI) scheme certainly puts the spotlight on India and makes it even more important in our global scheme of things. Now, with the new scheme, we will be able to offer even more competitive and globalized products and reach more markets,” Tae-Jin Park, Executive Director & Chief Sales Officer at Kia India, told Business Insider.

The government’s PLI scheme includes incentives of ₹57,000 crore over five years for the automotive sector and focuses on making Indian companies globally competitive by driving exports. According to the Nomura report dated December 28, the eligibility criteria are likely to be such that companies with high export revenue could be the key beneficiaries of the scheme.

The global automakers are pushing ahead with big plans for India in the coming years. Even Japanese auto major Nissan is ramping up its production at its Chennai plant and starting a third shift to increase output. On Monday, the company said, along with its dealer partners, it will hire 1,500 people in India to enhance production and reinforce the sales force after the robust response to its newly launched compact SUV Magnite. This comes after the company announced plans to layoff 1,700 people in India in 2019.

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