Industry Trend Analysis - Autos Investment Round-Up: EV Projects Dominate Asia Investment Landscape - DEC 2017

BMI View : EV related investments dominate d the investment landscape in Asia in the third quarter of 2017 with China continuing to solidify its position as an EV manufacturing and component hub, while other companies start ed to gear up for the Indian government ' s electrification push.

In BMI's regular round-up of production investments, we track the latest projects from the production side of the industry and analyse regional trends that we see developing. In doing so, we hope to build a picture of any potential hubs that may be developing, as well as company strategy in terms of production bases and export programmes.

Asia Autos Production Investment
Date Announced Country City/State/Region Company Value Brief Description Date Onstream
na = not available. Source: BMI
Jul-17 China Tianjin Volkswagen USD17mn Will produce up to 120,000 electric motors per year at existing transmission plant. 2018
Jul-17 Indonesia na SAIC-GM-Wuling Automobile USD700mn New facility which will have a production capacity of 120,000 cars per year. 2017
Jul-17 South Korea Ulsan Hyundai USD268mn Set up a mixed model production line at one of its plants in Ulsan. 2017
Aug-17 China Liaocheng Zhongtong Bus & Zhongshan Broad Ocean Motor USD75mn Will produce hydrogen-powered fuel cell buses, powertrains and a new vehicle platforms. na
Aug-17 China Nanjing Bosch USD116mn Will produce a new regenerative braking system for hybrid and electric vehicles. 2019
Aug-17 China na Ford & Anhui Zotye na Joint venture to build electric passenger vehicles under a new brand. na
Aug-17 Vietnam na Toyoda Gosei USD24.6mn Production of airbag parts and steering wheels. 2017
Aug-17 India Gujarat JSW Group USD623mn Will produce 200,000 electric vehicles annually along with batteries, electrical storage solutions and charging infrastructure. 2020
Aug-17 India Alwar Honda USD245.9mn Expansion of production capacity at the Tapukara plant along with the localisation of various car parts to reduce the cost of the automakers products. na
Aug-17 Indonesia na Hyundai na Will set up a commercial vehicle production plant as part of a 50-50 joint venture with a local company. The new facility will have an initial production capacity of 1,000 units a year, with scope for expansion. H218
Sep-17 Bangladesh Sonargaon Rangs Group na Assembly of pick-ups and human haulers from completely knocked down kits supplied by Indian car manufacturer Mahindra & Mahindra. The facility will have a capacity to produce more than 2,000 vehicles per year. 2017
Sep-17 India Hansalpur Suzuki USD593mn Will add a third car production line to its facility, which will have a production capacity of 250,000 units annually. na
Sep-17 India na Hyundai na Will set up a complete knock down electric vehicle assembly plant. H218
Sep-17 Vietnam Haiphong Vingroup USD3.5bn Will set up a manufacturing and research and development complex to establish the country's first national automotive brand called VINFAST. In its first phase, the Vietnamese company will invest between USD1-1.5bn with the aim of producing 100,000-200,000 vehicles per year, including 5-seat sedans, 7-seat SUVs and electric motorbikes. 2018-2019
Sep-17 Japan Morinosato Ichikoh USD148.6mn New facility to produce automotive headlamps. 2019
Sep-17 Japan Tokoname GKN Driveline na Will produce next-generation, all-wheel drive systems and rear drive modules featuring advanced technologies such as electronic disconnect capability and torque vectoring. H218
Sep-17 India Gujarat Suzuki, Denso & Toshiba USD180mn Will set up an electric vehicle battery pack manufacturing plant. 2020

In BMI's investment round-up of countries in the Asia region, we have identified 17 new investment projects that were either announced or inaugurated in Q317, up from 11 projects identified in the same period in 2016 ( see ' Autos Investment Round-Up: EVs And SUVs Main Investment Targets ' , October 3 2016). Available investment values for these projects represent a total of USD5.7bn, down 15.3% y-o-y compared to Q316.

Across the investment landscape for Q317, we have identified a key trend linking projects across the Asia region: alternative fuel vehicle (AFV) related investments dominate the investment landscape in both China and India.

EV Investments Continue To Flow In China

Continuing from what we witnessed in Q217 ( see ' Autos Investment Round-Up: China Solidifying Its EV Hub Status ' , August 9), AFV related investments continue to dominate the automotive investment landscape in China. All four projects in our latest investment round-up range from electric vehicle (EV) component research and development (R&D) to complete EV manufacturing, highlighting the strong interest by automotive majors to tap into China's booming new energy vehicle market.

The stand out investment in China this quarter is the partnership between local electric and hybrid vehicle technology developer Zhongshan Broad-Ocean Motor and native bus manufacturer Zhongtong Bus, which will develop fuel cell powered buses. To date, no other major Chinese firms have publically announced any sort of investment into this form of AFV technology.

India Gearing Up For Government's EV Push

The Indian government's proposed plan to electrify all new vehicles sold in the country by 2032 has seen companies start to draw up EV related plans, which now comprise three out of the five announced projects in the country this quarter, with a total publically announced investment value of USD803mn. These investments represent the Indian autos industry's first steps towards addressing the challenges of meeting the country's lofty 2032 goals.

We previously highlighted how the governments proposed EV plans face considerable challenges in the form of a lack of charging infrastructure and the high cost of these vehicles ( see ' Infrastructure And Poor Consumer Interest Threaten EV Goal ' , June 6). However, the announced projects by Indian company JSW Group into electrical storage solutions and charging infrastructure, as well as Suzuki's partnership with Denso and Toshiba for establishing the country's first lithium-ion battery manufacturing plant, will help to alleviate these challenges and help establish a wider EV presence in the country.

These projects also highlight how Gujarat is emerging as the preferred destination for EV related investments. The region's good infrastructure, availability of power, readily available land, port connectivity and a pro-industry government have been stated by manufacturers as key reasons for its attractiveness.