Increased demand and strategic shifts by global corporations are acting as growth factors for the sector. The home-grown automobile sector is also relying on this new-age trade practice as it allows companies to reduce capital expenditure on infrastructure, equipment and labour. 

Different industries within India have found a fondness towards contract manufacturing owing to several factors. The sector is experiencing significant growth driven by increased demand and strategic shifts by global corporations.

Policies like ‘Make in India’ act as a catalyst for the growth by offering incentives to boost domestic manufacturing. The Central Government has also introduced measures to attract foreign investment in electric vehicle (EV) manufacturing, aiming to establish India as a hub for EV production.

The home-grown automotive sector is also seen relying more on this new-age trade practice. From commercial to passenger vehicles, contract manufacturing allows automakers to reduce capital expenditure on infrastructure, equipment and labour. Instead of investing heavily in setting up factories, companies can focus on product development, marketing and other areas while leveraging third-party manufacturers.

Speaking to Motoring Trends, Layam Group Chairman G S Ramesh said, “The automobile industry encompasses plenty of activities including assemblies, subassembly etc. Currently, there is a shortage of labour within the industry. Contract manufacturing is picking pace as it helps companies to offload certain responsibilities without compromising on quality standards.”

“Companies involved in contract manufacturing take full responsibility of the products and are extremely cautious about quality and skill aspects. They produce the products in tandem with set quality standards and get paid in return,” he added.

Companies involved in this model also cut back on employee costs as contractors hire their own workforce and are responsible for their career progression.

Layam Group is involved in automobile, smartphone and other sectors for contract manufacturing. It reported an INR 3-4 billion turnover with 70 percent revenue coming from the automobile and engineering sectors.

Commenting on the same, Ramesh explained, “We have been involved in the space for the past few years. We have undertaken two kinds of models. One is contract manufacturing, and the other is job contract model. In the job contract model, we assume the role of a third-party quality inspector of the contract issuer’s product line.”

Alluding to vehicle segments the company manufactures under contracts, he noted, “We are involved in the commercial vehicle segment, where we produce the body frame for Tata Motors’ buses. We produce electric buses too and are also involved in logistics, shell making, final panelling etc. The manufacturing unit is in Dharwad and Lucknow.”

Commenting on market opportunities, the executive noted, “India’s contract manufacturing sector presents a compelling growth story, driven by rising demand for trusted partners among OEMs and smaller manufacturers alike. The opportunity lies in how effectively firms can position themselves as reliable collaborators. Clients are increasingly open to outsourcing, provided they find dependable service providers, creating a strong business case for contract manufacturers.”

“Small and medium enterprises are also showing interest in contract manufacturing, seeking to integrate themselves into broader supply chains. This trend signals a growing ecosystem where even niche players can secure a foothold,” he added.

However, the key challenge remains a mindset shift. Traditional industry players often resist adopting technology-driven solutions, preferring conventional methods. Yet, once convinced, they integrate seamlessly, underscoring the importance of strategic engagement. The availability of skilled resources is less of a bottleneck, given the emergence of hire-train-deploy models that ensure workforce readiness.

“In an increasingly competitive landscape, transparency and trust emerge as the defining factors for success. Companies that establish credibility and deliver on performance expectations will secure long-term partnerships and growth,” said Ramesh.

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Belrise Industries (formerly Badve Engineering), an Indian automotive systems manufacturer, and Plasan Sasa, an Israel-based provider of armour and survivability solutions, have signed a strategic agreement to develop solutions for the Indian military market. The collaboration focuses on the ATEMM (All-Terrain Electric Mission Module) systems.

The ATEMM is a self-propelled electric platform designed to increase payload capacity, energy supply and mobility for armed forces. The partnership aims to adapt this platform for the specific requirements of the Indian defence sector.

The agreement outlines three primary goals for the collaboration:

• Market Entry: Jointly introducing the ATEMM platform for military applications in India.
• Localisation: Aligning with the ‘Make in India’ and ‘Atmanirbhar Bharat’ initiatives through local production and technology transfer.
• Global Integration: Integrating Belrise into Plasan’s global supply chain to enable the production of Plasan’s systems in India for international markets.

Swastid Badve, Chief of Staff, Belrise Industries, said, "This partnership agreement represents a significant milestone in our journey to bring world-class defence technologies to India. By combining Belrise’s manufacturing capabilities with Plasan’s innovation, we are confident in delivering solutions that meet the evolving needs of the Indian Armed Forces."

Gilad Ariav, VP Marketing & Business Development, Plasan Sasa, said, "We are proud to partner with Belrise Industries, a company that shares our vision for innovation and excellence. Together, we will not only serve India’s defence requirements but also strengthen our global supply chain with cost-effective production from India."

The partnership combines Plasan’s experience in survivability and automotive engineering with Belrise’s manufacturing infrastructure in India to support long-term defence programmes.”

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Jaya Hind Industries (JHI), part of the Dr Abhay Firodia Group, held a groundbreaking ceremony for the expansion of its manufacturing facility in Kottaiyur Village, Thiruvallur District.

The project involves an investment of approximately INR 2 billion towards increasing capacity and integrate manufacturing processes for high pressure die casting and components for internal combustion engines, electric vehicles and structural castings.

The expansion includes a new shed covering 13,000 square metres, and once complete, the facility will have a manufacturing capacity of 20,000 tonnes per year.

The facility is designed to provide end-to-end process control. Jaya Hind Industries will include the following in-house operations: machining and honing, powder coating, heat treatment and impregnation.

These additions allow the plant to function as an integrated unit. The expansion follows the utilisation of existing capacity due to orders from domestic and export customers. The Chennai plant supports clients including Cummins (USA), Generac (USA), TVS Motor Company and manufacturers of EV modules.

Prasan Firodia, Managing Director of Jaya Hind Industries, said, “This expansion marks a significant milestone in Jaya Hind Industries’ growth journey. With strong order momentum across domestic and export markets, the Chennai facility will play a pivotal role in augmenting our die-casting capacity while deepening our vertical integration. By investing in advanced HPDC & machining capabilities and critical in-house processes, we are strengthening our ability to deliver high-quality, complex aluminium solutions with greater control, consistency, and speed. This project also reinforces our commitment to building globally competitive manufacturing capabilities in India in line with the Make in India vision.”

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Volkswagen-backed German battery company PowerCo has commissioned its factory in Salzgitter and produced the initial Unified Cells. This start of production allows the Volkswagen Group to design and produce battery cells in Europe.

The cells will be delivered to Volkswagen Group brands for road tests, which are expected to be utilised in the Electric Urban Car Family of Volkswagen, Skoda and Seat/Cupra next year.

PowerCo intends to provide 50 percent of the demand for Unified Cells within the Volkswagen Group, with the remainder coming from suppliers. The architecture allows for use across brands and regions. It supports technologies including lithium iron phosphate (LFP), nickel-manganese-cobalt (NMC) and solid state.

The version produced in Salzgitter uses NMC technology. This cell provides an increase of 10 per cent in energy density compared to previous models. It is designed for use with the cell-to-pack system.

Oliver Blume, CEO, Volkswagen Group, said, "The PowerCo Gigafactory in Salzgitter sends a strong technological signal for Europe and serves as a cornerstone on our path to becoming a global automotive tech leader. We are the first European carmaker to establish our own battery cell development and production. This step strengthens our position and independence in the global competition."

Production in Salzgitter will increase during the coming year. The facility has an initial capacity of 20 GWh, with the potential to reach 40 GWh. Salzgitter serves as the lead plant for factories in Valencia, Spain and St. Thomas, Canada. These sites follow a factory concept that allows for the exchange of knowledge.

The Research & Development centre in Salzgitter is also expanding. A test field is under construction and will begin operation at the start of 2026.

Thomas Schmall, Group Board Member for Technology, Volkswagen, said, "With PowerCo, we are consistently expanding our know-how in battery technology. In combination with the new battery system, the Unified Cell ‘made in Salzgitter’ brings a real technological leap for our customers. This puts us in the driver’s seat when it comes to a key technology for e-mobility."

Production involves automation and data analysis. Data points from machines and buildings provide traceability and assist quality control.

Frank Blome, CEO, PowerCo, said, "In just three years, we have built an entirely new company, developed a competitive product, and completed a cell factory along with its upstream supply chain. At the same time, we are already constructing the next cell factories in Spain and Canada. In short: we deliver. This achievement is the result of an outstanding team effort by many colleagues at PowerCo and Volkswagen – and I’m deeply grateful for that."

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Ford and Renault Group have announced a landmark strategic partnership that will expand Ford’s electric vehicle offerings to European customers, significantly enhancing competitiveness for both automakers in a rapidly evolving European automotive landscape. 
A cornerstone of the partnership is an agreement for the development of two distinct Ford-branded electric vehicles based on the Ampere platform, leveraging Renault Group’s strong EV assets and competitiveness. These two e-vehicles will be produced by Renault Group in the North of France, illustrating Ampere ‘ElectriCity’s’ modern manufacturing capabilities and expertise.
Designed by Ford, developed with Renault Group, the two cars will feature distinctive driving dynamics, authentic Ford-brand DNA and intuitive experiences. They mark the first step in a comprehensive new product offensive for Ford in Europe. The first of the two vehicles is expected in showrooms in early 2028.
In addition to collaborating on EVs, Ford and Renault Group have also signed a Letter of Intent (LOI) for a European light commercial vehicle collaboration. Under this LOI, the partners will explore the opportunity to jointly develop and manufacture Ford and Renault branded selected light commercial vehicles (LCVs).
François Provost, CEO Renault Group said: "Renault Group is proud to announce a new strategic cooperation with Ford, an iconic car manufacturer. This partnership shows the strength of our partnership know-how and competitiveness in Europe. In the long term, combining our strengths with Ford will make us more innovative and more responsive in a fast-changing European automotive market."
Jim Farley, president and CEO, Ford Motor Company said: "The strategic partnership with Renault Group marks an important step for Ford and supports our strategy to build a highly efficient and fit-for-the future business in Europe. We will combine Renault Group’s industrial scale and EV assets with Ford’s iconic design and driving dynamics to create vehicles that are fun, capable, and distinctly Ford in spirit."

Combining strengths
The companies will take advantage of the proven capabilities and competitiveness of Renault Group’s Ampere platform, EV manufacturing ecosystem and industrial capacities in the North of France (ElectriCity) to produce two all-new Ford-branded electric passenger vehicles.
By joining their expertise as major players in Europe, in innovation, design, software, and service delivery, Ford and Renault Group will aim to address industry challenges and better serve customers in both the retail and commercial vehicles segments.
The Ford and Renault Group strategic partnership will combine decades of experience in the light commercial vehicle segment, as well as the industrial scale and extensive supply base of both companies, creating a formidable force poised to drive innovation and efficiency in the European market.
 

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