TOKYO, Japan: Japanese automakers are deepening their bets on India, shifting billions of dollars in investment from China to build the country into a new global manufacturing hub for cars and electric vehicles.

Toyota, Honda, and Suzuki are leading the charge, committing more than US$11 billion in new factories, electric vehicle programs, and export infrastructure. Executives say the pivot is part of a broader strategy to diversify supply chains, reduce exposure to China's slowing market, and capitalize on India's expanding economy and government incentives for local production.

"India is a good choice as a replacement market for China," said Julie Boote, autos analyst at Pelham Smithers Associates in London. "For the time being, the Japanese think it's a much better market because they don't have to deal with the Chinese competitors."

A brutal price war in China and tighter profit margins have made it harder for foreign automakers to operate there, while India's restrictions on Chinese electric vehicle imports have created an unusually open playing field for Japanese firms.

Toyota, the world's largest carmaker, and Suzuki, which dominates India with nearly 40 percent of the market, are expanding local capacity for both domestic sales and exports. Honda is preparing to use India as a production base for one of its upcoming electric cars.

"The Indian market is significant and is set to grow in the future," said Toyota President Koji Sato, noting that India has become a focal point for global carmakers.

Toyota's investments include more than $3 billion to expand its southern India factory by 100,000 vehicles per year and build a new plant in Maharashtra by 2030. The projects are expected to push Toyota's total Indian capacity beyond one million vehicles annually, as it introduces 15 new or refreshed models and aims to lift its market share to 10 percent by decade's end.

Japan's overall investment in India's transport sector has surged more than sevenfold since 2021, reaching 294 billion yen ($2 billion) in 2024, while investment in China's transport sector has plunged 83 percent over the same period.

Automakers say India's rising manufacturing standards and Prime Minister Narendra Modi's industrial incentives are drawing them in. The country's economy has grown by around eight percent annually for three years, and its government is pushing for more export-led growth.

"India's protectionist stance toward neighbouring countries is a blessing in disguise for Japanese carmakers," said Gaurav Vangaal of S&P Global Mobility. "Because of this, they see an opportunity to expand investment in India, enhancing their cost competitiveness against domestic players."

Honda, which already dominates India's motorcycle market, plans to expand its car business. CEO Toshihiro Mibe said India will be one of Honda's three key car markets — alongside the U.S. and Japan — and will produce and export its "Zero series" EVs to Asia starting in 2027.

Suzuki, meanwhile, plans to boost production to four million cars a year from 2.5 million, led by its Indian subsidiary Maruti Suzuki, the country's top automaker and largest exporter. "We would like to grow India as Suzuki's global production hub," said President Toshihiro Suzuki.