Manufacturing is one business China excels at, but now with the Make in India initiative, a lot of foreign companies, including Chinese, are entering the country to expand into developing markets. Automobile manufacturers are no exceptions, with Ford, Chevrolet, Nissan and Honda etc. doing extremely well here.
Now, after so much hiatus in the past, Chinese automobile companies are planning to enter India as the economy is strengthening and the market is maturing. According to a report by The Hindu, Changan Automobile is working on plans to set up a plant in either Tamil Nadu or Andhra Pradesh.
There is also news that the Great Wall Motor Company, an expert in SUVs, is also in talks to enter India through this new competitive segment. As the market matures, more and more segments will open up, giving these Chinese players access to a bigger chunk of the market.
If you don’t know already, Chinese car manufacturers are known around the world for replicating designs from Bugatti, Bentley, Lincoln and Aston Martin and producing cheaper alternatives to these. Very reminiscent of their strategy behind smartphone designs too, isn’t it?
Why would Chinese automakers want to enter Indian market now?
One of the main reasons a lot of companies still fret to enter Indian market is that there are established players like Suzuki, Hyundai, Honda and Ford who have a stronghold in this industry for decades now.
One cannot simply just enter the country and disrupt the automobile scene here. Automobiles aren’t like smartphones, they do not age as quickly as smartphone technologies do. However, with so many segments opening now, Chinese automobile makers might be looking to expand to those growing rapidly, specifically.
Ssangyong, acquired by Mahindra in 2014, hasn’t done very well here, also owing to the fact that their cars were focussed on a premium segment, whereas Indians are still very biased towards the less than Rs. 10L segment.
However, entering the Indian market is never too late. As local manufacturing gets better, these Chinese players will be able to expand to this area, and get access to other Southeast Asian markets like Indonesia and Malaysia. Furthermore, India is also an exporter of automobiles for Suzuki and Ford, which drives volumes and sales for these companies.
Again, from Chinese companies we can expect very competitive pricing and great innovations, not usually seen in sync in American or European cars. Who knows, we might also see electric cars from the likes of Tencent and LeEco.