Chinese electric vehicle maker BYD is considering the option of setting up local assembly operations in India as demand for its cars continues to grow despite strict import limits and supply constraints. According to Bloomberg report, people familiar with the matter have indicated that the company is evaluating semi-knocked-down (SKD) or similar assembly routes to assemble its electric cars in India.The development comes after India had earlier rejected BYD’s proposal to set up a full-scale manufacturing facility, citing concerns about Chinese investment. With that route currently closed, local assembly of semi-finished components is emerging as a more viable option. Compared to a full factory, SKD assembly requires less investment and is considered easier to navigate from a regulatory perspective.
Demand for BYD’s electric vehicles has increased rapidly in India, putting pressure on the existing import limits. The report further said that dealers are sitting on hundreds of bookings, with a large portion of the December quarter inventory already committed to customers. BYD’s sales in India grew by nearly 88 percent last year to around 5,500 units. However, growth has been hindered due to high tariffs and import quotas. Shifting to local SKD assembly can reduce this barrier to a great extent, potentially reducing import duties. Such a move would also give the company more flexibility on pricing and volumes.Currently, BYD sells the Atto 3 electric SUV and the eMax7 MPV in India, both of which have received approval to import over the standard quota of 2,500 units. Its lineup also includes the Sealion 7 and Sealion electric sedan.
