Škoda CEO Klaus Zellmer Says India Could Become Car Industry's Next Big Manufacturing and Export Hub

India has the potential to become one of the world's most important car manufacturing hubs over the next decade, developing, building and exporting vehicles rather than simply selling more of them, Škoda chief executive Klaus Zellmer has said. Speaking to The Independent's Steve Fowler, Zellmer described India as "possibly the biggest car market that has got the biggest growth potential in the next 10 years," while cautioning that success there would demand far more than a scaled-down European product.

The remarks come as Škoda's India-built Kylaq, a sub-compact SUV, has helped the brand double its local sales volumes between 2024 and 2025. Zellmer has previously indicated that bringing the Kylaq to Europe is "very much on the table," and has now outlined a broader strategy built around India as a low-cost, high-quality manufacturing base.

Central to that plan is CMP21, a Volkswagen Group platform developed in China that Škoda intends to localise fully in India. "We know if in terms of innovation, capability and cost efficiency, the platform is competitive in China, it will be competitive anywhere in the world," Zellmer said, adding that vehicles built on it could eventually reach markets beyond India, including the Middle East, the southern hemisphere, and potentially Europe.

Zellmer was direct about the scale of the challenge. India, he said, is "a totally unforgiving market" where success requires a company's best engineering, not outdated technology reworked for a price-sensitive audience. Siddharth Vinayak Patankar, Editor-in-Chief of ACKO Drive, echoed that view, noting that India's growing engineering, software and design capabilities are already drawing serious research and development investment from Mercedes-Benz, Hyundai, Kia and Suzuki, among others. He added that a strategy built solely around cheap, India-specific products would struggle to succeed, since Indian buyers are quick to sense when a car has been diluted for cost reasons.

For Škoda, the appeal of India extends beyond manufacturing economics. Zellmer described the country, alongside Vietnam, Southeast Asia and the Middle East, as a strategic hedge against overreliance on Europe, where the brand currently generates the bulk of its sales. He said India's combination of skilled, comparatively lower-cost engineering talent and efficient production, demonstrated at Škoda's Pune plant, positions it as a genuine alternative manufacturing base to China.

Whether Indian brands themselves follow Chinese manufacturers into export markets is, in Zellmer's view, no longer a question of if. "They will certainly do it," he said, citing Mahindra, Maruti Suzuki and Tata as likely candidates, partly driven by the Indian government's own ambitions to grow exports. Škoda, he argued, retains an advantage through its established European dealer network and regulatory experience, though he acknowledged competition would intensify.

Bringing an India-built car to Europe would still mean clearing stringent safety, emissions and regulatory hurdles. "It would not be a walk in the park," Zellmer said, underlining that no final decision on exporting the Kylaq has been made.

This report draws on an exclusive interview conducted by Steve Fowler for The Independent.