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VYR

4,461 Posts.

2793

18/01/23

14:56

Post #: 65754687
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Originally posted by MTV: ↑

"I like the Idea of having a second Asian Manufacturing Facility in India."

I still maintain, for reasons I have previously articulated, that the Indian market is just not worth the trouble of direct involvement (high risk - low margin). The main issues briefly:
Protectionism
Political interference
Rule of law
Corruption
Infrastructure
Logistics
Low cost/low margin end of the market

India has begun opening up in recent years, but they have a long way to go. The EV subsidy scheme is an example of how the inclination towards protectionism remains strong. Any material change is likely to come well beyond my investment horizon (10 years), besides which this only addresses the first two issues in my list.

In the meantime VMT should restrict itself to the supply of parts kits, and be careful to leave any issues of local compliance entirely the responsibility of the importer. Any further involvement needs to be kept strictly arm's length, e.g. licensing the local (Indian) production of some parts to meet local content thresholds, and supplying the necessary tools, moulds and IP. They would also need to be very careful in controlling which export markets (if any) that such production could be sold into.

NB: The above post is opinion only and should not be construed as financial advice.

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Good points. VMT dodged a bullet by being arms length in the Revolt Tariff and Fame subsidy blow up.

VMT Price at posting: 40.5¢ Sentiment: None Disclosure: Held
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