The prospects of India becoming the Global hub for car manufacturing, at least for the small car segment, look good given the difference in the labor costs.
Just consider the case of European car industry to 'feel' the difference:
Average of 70 hours of labor per small car * labor cost of 1.5 Euro in India = 105 Euros
Compare this with the average labor cost incurred for a similar small car manufactured in Germany: 3000 Euros!!!
And one company that has exploited this and taken the right strides is Hyundai Motor India. With the given state of World economy, companies across the World will be looking to cut the prices of their products and even with freight and import charges added up, Indian manufacturing seems more luring. And this is a big opportunity for other Indian companies to penetrate this segment given the fact that cos like Nissan, Volkswagen and Fiat have already realized this and made inroads.
Source: ET, 18.06.2009
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