Industry

Top 3 Emerging Automotive Industries in 2023

Once only involved in the assembly of foreign vehicles, automakers based in the developing world are now keen to establish themselves as car manufacturers in their own right.

Image credit: Shutterstock / Radiokafka

Most famous automotive manufacturers are based in developed economies. Among the world’s top ten automakers, there are three Japanese companies, two German manufacturers, and two American giants.

This is not to say that developing economies don’t play a role in the global automotive industry. Many car manufacturing giants own overseas manufacturing plants across the developing world.

Companies such as General Motors and Ford have long been running assembly plants in Mexico and Brazil—among other places—due to economic considerations.

There are some exceptions, however.

Some emerging economies have locally-grown automotive industries with models designed and manufactured almost from scratch.

The Turkish automobile brand, TOGG, is a case in point, recently making headlines.

Türkiye

Clustered around the Marmara region, there is a strong automotive industry in Türkiye. In 2022, just under 1.5 million vehicles were assembled in the country.

While some of these vehicles were put together on assembly lines operated by foreign manufacturers including Hyundai, Toyota, and Honda, the majority of the output is manufactured by joint ventures such as Oyak-Renault, Fiat-Tofaş, and Ford-Otosan, which are owned equally by international automakers and Turkish partners.

Then there are fully Turkish brands—of which TOGG is an example—and are considered a matter of national pride, symbolizing the nation’s industrial accomplishments.

TOGG’s assembly plant was launched in 2018 in Bursa, Turkey, with the aim of designing, developing, and manufacturing a fully electric SUV in the space of five years—an objective which was achieved by May 2023, when the first TOGG T10X vehicles were delivered to customers.

Since then, the fully electric SUV model has come to assume a role in Türkiye’s diplomatic relations with the gifting of several T10Xs to foreign leaders and dignitaries such as Mohammed bin Salman and Azerbaijan’s President, Ilham Aliyev.

India

India is yet another emerging economy with a homegrown automotive sector. By some metrics, India became the third largest automaker in the world in 2023. By the end of this year, over 4.5 million vehicles will roll out of various assembly lines in India.

Although India has one of the lowest per capita vehicle ownership statistics across the developing world, it is a mighty manufacturer of automobiles. The country’s oldest and most iconic automaker, Hindustan Motors, has been in business since 1942.

Some 80 years onward, other companies have emerged and joined the market. The joint venture, Maruti-Suzuki is currently the market leader, controlling over 44% of the sector and making over 2 million vehicles of various classes each year.

There are also plants owned and operated by international automakers, the largest of which are Hyundai’s two manufacturing plants in Chennai.

The plants assemble the international editions of the Korean automaker’s models for export, as well as slightly modified models for the Indian market.

Other international manufacturers such as Kia, Toyota, Honda, Škoda, and Renault also operate assembly lines in India.

The country’s leading locally-developed automaker is, of course, Tata Motors. Launched in 1991 as a subsidiary of Tata Group, the automaker is relatively young. Nevertheless, it has managed to raise its market share to over 13%. Tata’s lineup of products ranges from small hatchbacks to SUVs. Above all, however, Tata cars are successful because of their affordability—which is a crucial factor in an emerging market.

The Indian automotive sector has excellent growth prospects in a country of 1.4 billion and only around 300 million cars. As the spending power of India’s massive emerging middle class goes up, more families will be willing to own a car. And, this is exactly what Indian automakers are hoping to see by 2030.

Malaysia

Malaysia is a long-established hub of auto industry in Asia. Although Malaysian automakers manufacturer no more than 750,000 vehicles per year, the sector has become highly modernized over the course of its long history.

Indeed, one of the first automobile manufacturing plants in Asia was built in modern-day Singapore in 1926 by Ford, which at the time was still part of the Federation of Malaya.

With Malaysia’s economic development gathering pace in the second half of the 20th century, the Malaysian government encouraged captains of industry to lay the foundations of a homegrown automotive sector. Six major automakers were established between August 1967, and November 1968.

Today, that number has grown to 27 vehicle manufacturers.

Much like Turkey and India, the majority of these companies are joint ventures to locally assemble models owned by international automotive giants. In addition to Asian brands such as Nissan and Toyota, prestigious German automakers Mercedes-Benz and BMW also own manufacturing plants in Malaysia.

It is thanks to the presence of advanced technological know-how that Malaysia has turned into a hub of high quality manufacturing, precision engineering, and even research and development (R&D)—rather than a hub of low-cost mass manufacturing.

The country’s own locally-grown brands, Proton and Perodua, have gone beyond the borders of Malaysia. In the 2000s, Proton became the first automaker based in an emerging economy to export its locally-developed models to Europe.

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