(MENAFN- KNN India)
New Delhi, Jul 18 (KNN) In a strategic move that could reshape the automotive landscape in India, several component suppliers for Tesla Inc. are actively exploring opportunities to establish or expand their operations in the country.
This development comes despite Tesla's own plans for local production remaining uncertain, following an indefinite delay in the company's much-anticipated entry into the Indian market earlier this year.
According to a recent report by the Economic Times, state governments, particularly Gujarat and Tamil Nadu, are adopting a 'wider net' approach by courting Tesla's suppliers. This strategy is based on the belief that Tesla is likely to establish operations in areas with a robust supply chain.
The report indicates that three of Tesla's suppliers have recently visited Gujarat to scout potential locations. These suppliers, who also cater to other automotive companies, have shown significant interest in the state's offerings.
Meanwhile, Tamil Nadu, renowned for its automotive and electronics manufacturing prowess, is attracting attention from two European suppliers considering expansion.
One of these suppliers, a European metal automotive component manufacturer, is looking to expand its existing operations in Tamil Nadu.
Additionally, a German manufacturer specialising in high-performance rubber parts for various vehicle types is planning to establish operations under its parent company name in the southern state.
State governments are leveraging their unique strengths to attract Tesla and its ecosystem. Tamil Nadu is capitalising on its strong electronics manufacturing base, while Gujarat is aggressively pursuing Tesla's suppliers.
Industry experts emphasise the importance of a local supply system for Tesla's operations, noting that it helps accelerate production and reduce transportation costs.
The complex nature of Tesla's supply chain, involving multiple global Tier-I and Tier-II suppliers, underscores the significance of these potential expansions in India.
The ongoing trend of global manufacturers shifting away from China has positioned India as a promising alternative. Ashwin Amberkar, an automotive analyst at Canalys, suggests that if Tesla enters the Indian market, it would likely leverage its global supply chain partners already based in India.
This strategy could help the automaker lower production costs, manage supply chain risks, and comply with local sourcing regulations.
While Tesla's own plans for India remain unclear, the proactive steps taken by its suppliers signal a growing confidence in the country's automotive manufacturing potential.
(KNN Bureau)
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