Transport equipment is one of the key sectors for Indian exports and the country's principal players are increasingly looking to cement the success of their exports by establishing assembly plants in Africa.
In fact, the doubling in India's exports to Africa, from 2006 to 2010, has been significantly aided by an increase in the export of transport equipment. Globally, Indian car sales are predicted to more than quadruple to si45bn by 2016.
After South Africa, Kenya is seen as the hot spot for commercial vehicles. Following the World Bank's approval of the next tranche of funding to improve East Africa's transport infrastructure, growth is expected to accelerate in the commercial vehicle sector.
Perhaps one of the biggest success for Indian automobile companies venturing into Africa is Tata Motors, the subsidiary of India's famous Tata Group. Tata Motors has registered spectacular growth in Africa, emerging as the third-largest player in South Africa's commercial vehicles market in 2008 after a period of just three years.
It is today one of the fastest-growing brands in the passenger vehicles segment across Africa. The company also makes the world's cheapest car, the Tata Nano, which costs around $2,500.
Like many players across different industries in India, there is an increasing pressure to look abroad to fulfil revenue targets due to competitive challenges in the home market. Competition, apart from crowding the market, is having an inflationary effect I on salaries.
The Tata Group's first international expansion was in 2000 with Tata Tea, which bought the famous brew, Britain's Tetley, for [pounds sterling]271m. Since then it seems that the group has not stopped looking outside its borders for acquisitions; for example, Tata Motors bought out Daewoo's truck unit in Korea.
Analysts believe that Tata Motors played a vital role in the development of Tata Africa's origins and current operations in the continent.
In June 2011, based on market value, Tata Group has become India's wealthiest with a market value of $98.7bn. The group first put its foot on the continent by marketing Tata Motors' heavy vehicles in Zambia in the 1970s.
India's Setco Automotive is planning to build a plant on the continent sometime this year as part of its aggressive export growth. The clutch manufacturer, which focuses on medium to heavy commercial vehicles, is optimistic about the prospects for growth in this sector.
It also believes there...