Indian automakers and component makers, including Royal Enfield, Bajaj Auto, Tata Motors, are increasingly expanding manufacturing and assembly operations overseas as exports become a key growth pillar at a time when higher tariffs and geopolitical disruptions threaten to play spoilsport.
At least four companies, including Bajaj Auto, Royal Enfield, Sona Comstar and Tata Motors, have underlined benefits of overseas plant expansion or committed additional expenses for improving overseas operations over the past month in key export markets across South America and Asia.
The bullish commentary on international plans come as exports of vehicles hit an all time high in financial year 2026 with cumulative vehicle exports growing by 24% to 6.6 million units, as per Society for Indian Automobile Manufacturers (Siam) data.
The need for geographical diversification has become more pressing as two of India's largest export destinations—Mexico and South Africa—have considered raising tariffs on vehicle imports from India over the past six months.
Mexico has already increased tariffs to as much as 50% on passenger vehicle imports and 35% on two-wheeler imports. South Africa is also reviewing its automotive policy, with passenger vehicle tariffs potentially rising to 50%.
Brazil push
Royal Enfield is preparing to set up its own assembly plant in Brazil to deepen its presence in one of its fastest-growing overseas markets.
Bajaj Auto, meanwhile, said its first manufacturing plant outside India, located in Manaus, Brazil, helped deliver its best-ever performance in the country.
"In CY2025, Bajaj Do Brasil sold nearly 32,000 units—versus over 13,000 units sold in CY2024. A key enabler of this performance was the successful commencement of operations at the dedicated manufacturing facility in Manaus, Bajaj Auto’s first plant outside India," Bajaj said in its FY26 annual report released last week.
"The annual capacity has increased to 50,000 units per year, having started local operations for frame welding and painting," the report added.
Speaking after the company's results on 22 May, Royal Enfield chief executive B Govindarajan said Brazil would be the next phase of its international expansion.
"Now, we are also working on establishing our own CKD facility, which will help us in the years to come for the higher growth rate," he said during the call.
The company is also evaluating a plant in Mexico to help offset tariff risks in both Mexico and the US.
South Africa, another major export destination for Indian automakers, is also reviewing localization policies that could raise tariff barriers.
Companies across two wheeler, three wheelers, passenger vehicles and commercial vehicles across all categories have reported a sharp focus on international sales for driving growth.
Local advantage
Tata Motors has also identified international expansion as a key pillar of its long-term growth strategy.
Speaking on Thursday, the country's largest truck and bus maker said it plans to establish assembly plants in markets where sales volumes reach a threshold that justifies greater localisation.
The commentary comes months after Indian two wheeler giants Hero, TVS and Bajaj noted that existence of assembly plants in Mexico which is one of the largest export markets will help in offsetting higher tariff impact in the country, thus suggesting that the playbook may become wider as exports grow for Indian firms across categories.
Tata Motors won a large 70,000 order in Indonesia in February this year which came under intense scrutiny from local lawmakers over lack of value addition.
"We operate several assembly plants across the globe in countries like Bangladesh and South Africa. We have been having semi knock down units assembly facilities especially in those countries where duty differential is very high. When a particular market becomes significant in terms of volume then we will increase our level of localization. We will keep rolling out these plants as these markets hit the volume threshold," Tata Motors managing director and chief executive Girish Wagh said.
He added that governments across the world increasingly expect manufacturers to create local jobs, making localization an important consideration for global expansion.
Trade hedge
Auto component maker Sona Comstar is following a similar strategy.
In April, the company's board approved a $6 million investment to expand its Mexico operations, strengthening supplies to the US market through a lower-tariff manufacturing base.
"We do play on it (theme of geographical diversification of plants) as you would have seen. North America was where we had seen that this may happen. So even before all the tariffs were put etc, in 2024 we had announced our Mexico plant. I think we are decent at reading the wind and seeing where the world is going. And we will act accordingly. But we will act prudently," Vivek Vikram Singh, managing director at Sona Comstar, told Mint in an interview in May.
Bloomberg reported earlier this year that Mahindra and Mahindra is looking to set up plant in South Africa to protect against any higher tariffs.
To be sure, most Indian automakers already operate assembly and manufacturing facilities across several overseas markets. However, tariff volatility, supply-chain disruptions and growing localisation demands are prompting companies to accelerate regional manufacturing strategies.
"It's no longer just about exporting products from the lowest-cost manufacturing base; it's about building resilient regional and localised manufacturing ecosystems, that can respond quickly to changing market and supply chain dynamics," Vinay Piparsania, founder at MillenStrat, said.
“I believe we're witnessing the next logical phase of globalisation by Indian automotive companies.”