Chinese automakers have been muscling their way into India for a while now. And the number of Chinese firms entering the Indian market seems to have increased off late, with at least half a dozen automakers queued up to make inroads into the world’s fourth-largest auto industry and pump in about $5 billion over the next 3-5 years.
After Great Wall Motor, Geely, Chery Automobile, SAIC Motor and Beiqi Foton, now China’s state-owned auto firm Changan Automobile Co. Ltd has geared up to make inroads into India.
Headquartered in Chongqing, Changan manufactures cars ranging from entry-level hatchbacks and sedans to sport utility vehicles (SUV), vans and pick-up trucks.
It also has a range of electric and hybrid vehicles. In India, it plans to start with two SUVs, including the CS75 and one more SUV in the Creta segment by the end of 2021.
The carmaker has studied the Indian market for the last four years and has set up liaison offices working towards local manufacturing.
Sources say the company is in talks with various state governments like Gujarat, Tamil Nadu and Andhra Pradesh to set up greenfield operations with a capacity to manufacture two lakh vehicles a year.
It may also go ahead with AP’s Sri City, which has emerged as the new auto hub of South India, to set up its manufacturing base.
The company is also looking at making India its export hub for some of its markets, including Pakistan. It has already set up its corporate office in Gurugram which is set to be operational in a few months, sources added.
According to industry experts, the initial success of MG Motor and a slowing home market have prompted these automakers from China to look at India.
Analysts believe value-based pricing of products, as MG Motor did, would help these carmakers to gain market share in India – much like what happened in the case of smartphones.
Chinese smartphone giants gained 66 per cent of the India smartphone market in the first quarter of 2019 following their value offering, overcoming reservations about Chinese brands.
Moreover, the Chinese are not likely to try to get into Maruti or Hyundai’s forte -- small cars --- but focus on SUVs, in turn eating into the market share of the likes such as Nissan, Volkswagen and Ford.
Many are convinced even if the trade war ends, the Western world — both the US and Europe — will still be determined to put roadblocks in their way. These companies, hence, plan to move into India quickly.