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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Maruti Suzuki India, the country’s largest passenger vehicle manufacturer, has added another milestone with its popular Dzire sedan surpassing cumulative production of 3.5 units, reaching the figure in approximately 18 years and 9 months since its launch in 2008.

Manufactured at the company's Manesar plant in Haryana, the Dzire joins the Alto, Swift and WagonR as the fourth Maruti Suzuki model to reach the 3.5 million production threshold.

The Dzire sedan took 7 years and 3 months to reach its first million units, while the most recent million units were produced in 4 years and 4 months. The Dzire became the first sedan to achieve a 5-star safety rating under Bharat NCAP and featured among Maruti Suzuki's top five export models in the previous financial year. The current generation model, introduced in November 2024, includes an automatic S-CNG variant offering fuel efficiency figures of 36.47 km/kg.

Hisashi Takeuchi, Managing Director & CEO of Maruti Suzuki India, said, "The cumulative production of 3.5 million Dzire vehicles marks a significant milestone in the model’s journey. More importantly, it reflects the trust and affection of millions of customers across four generations. It is rare for a car to remain relevant for nearly two decades. Introduced in 2008, the Dzire has created a strong legacy by combining style, comfort and practicality. Across four generations, the sedan has evolved with changing customer aspirations while retaining its core strengths, helping it to sustain its position among India’s highest selling vehicles over the years. I express my heartfelt gratitude to our customers for making Dzire a part of their lives, and to our employees, supplier and dealer partners whose contribution has made this journey possible. Together, they have shaped Dzire’s legacy and established it as one of India’s most successful passenger vehicles. Going forward, with increasing manufacturing scale, we remain committed to delivering world-class quality and delighting customers in India and across global markets."

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Automotive tier 1 supplier MAHLE has fully commissioned a photovoltaic-thermal (PVT) system at its manufacturing site in Vaihingen an der Enz, Germany, marking the largest installation of its kind in the country.

The 2,000-square-metre facility comprises over 1,000 PVT hybrid modules supplied by Dresden-based startup Sunmaxx, integrated with a geothermal borehole field and a heat pump system. The installation delivers over 430 kWp of electrical capacity and a projected annual output of 1,086 megawatt-hours of thermal energy, meeting almost the entire heating demand of the site previously supplied by fossil fuels.

The geothermal borehole field acts as a seasonal thermal storage unit, storing excess heat generated during summer months for winter use by the heat pump.

The modules utilise cooling plates developed by MAHLE, based on its automotive thermal management technology used in electric vehicles. Positioned at the rear of the PVT modules in full-surface thermal contact, the cooling plates absorb heat from the solar cells to reduce temperature-related power losses and transfer thermal energy to the heat transfer fluid.

Established in 1979, the Vaihingen facility employs 200 workers and serves as MAHLE's sole European plant manufacturing Visco fans and pumps for engine cooling systems.

Martin Wellhoeffer, Member of the MAHLE Group Management Board, responsible for the business unit Thermal and Fluid Systems, said, “With our PVT system in Vaihingen, we are creating a unique bridge from proven automotive technology to pioneering energy technology, underscoring the consistent implementation of our sustainability strategy.”

Joachim Wulff, Plant Manager, MAHLE, said, “We are particularly proud to have installed this forward-looking technology here at the site, using existing structures and without interrupting ongoing operations.”

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Maruti Suzuki India has partnered with Adobe to modernise its digital ecosystem across marketing, sales, service and vehicle ownership lifecycle touchpoints.

The initiative integrates legacy systems to unify customer profiles and content delivery platforms. The automaker utilises Adobe Experience Manager Sites as a Cloud Service alongside Edge Delivery Services to manage brand web portals, including NEXA and ARENA, achieving reduced page load times and incorporating 3D showroom interfaces.

Additionally, Adobe Experience Platform consolidates customer data to support campaign orchestration, loyalty initiatives and service workflows. The manufacturer is also integrating artificial intelligence capabilities through journey orchestration tools and content optimisation solutions.

Sunil Kakkar, Director of Corporate Planning and Executive Committee Member at Maruti Suzuki India, said, "This collaboration has enabled us to respond to the market shifts very effectively, innovate faster and create a meaningful experience that strengthens our leadership in the quickly evolving digital landscape, so we can deliver superior products with high value while shaping the future of the automotive ecosystem."

Shobhit Mittal, Executive Vice-President of Digital Enterprise, Maruti Suzuki India, said, "One of the biggest challenges during Maruti Suzuki’s website revamp was integrating multiple legacy systems. We had to ensure data consistency and smooth connectivity across platforms while delivering a modern, intuitive interface. Adobe's live “See-to-Believe” proof of concept was a game changer. It allowed us to experience the platform's capabilities in real time, demonstrating how their solutions could handle complex integrations and deliver personalized experience at scale. Adobe's consultative approach, involving global experts, showcased strong commitment for us and assured us that they were the right partner to deliver a seamless, future-ready digital experience."

Tapan Sahoo, Senior Executive Officer of Digital Enterprise, Maruti Suzuki India, said, "Transformation is about people coming together with a shared vision, collaborating across teams and co-creating value for customers."

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KUKA Mexico has opened its Innovation and Technology Development Centre in Monterrey, expanding operations in Northern Mexico.

The R&D setup is located within the Centre for Innovation, Research and Technology Development at the Universidad Autonoma de Nuevo Leon within the Technological Research and Innovation Park.

Spread across the 500-square-meter facility, it provides automation technologies, training programmes, technical support and product demonstrations for sectors including automotive, intralogistics, electronics and metalworking.

The facility houses educational cells from the KUKA College training initiative, autonomous mobile robots for intralogistics and industrial robots for welding applications.

Through a collaboration with the university, the centre aims to double KUKA Mexico's annual training capacity from approximately 550 engineers to support technicians, students and partners in robotics and automation deployment. The opening coincides with KUKA marking 30 years of operations in Mexico since its establishment in 1996.

Christopher Hernandez Moya, MD, KUKA Mexico, said, "Opening this new facility marks an important step in KUKA Mexico’s continued growth. By establishing a stronger presence in Northern Mexico, we are working more closely with our customers, partners and educational institutions to expand robotic automation training. At the same time, we are providing greater access to KUKA technologies, services and technical expertise. We are excited to continue supporting the development of automation and manufacturing talent in the region."

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