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Few weeks earlier, executives of Great Wall Motors, the largest sports utility vehicle (SUV) and pick-up manufacturer in China, made a covert visit to the office and production unit of an automotive company in India. The aim was to explore an India entry, with a manufacturing route and a supporting sales channel.
This was preceded by a news report in a China daily in January that minivan maker SAIC-GM-Wuling, a tripartite joint venture, was planning to buy into General Motors India, which produces and sells cars under the Chevrolet brand. SAIC, the biggest automotive company in China, holds nine per cent stake in GM India.
And, Chery, the Anhui, China-based small car specialist, held a dialogue with India’s biggest automobile maker, Tata Motors, to sell its SUV and small car platforms for use in India, according to reports. The two companies have an active partnership for making Jaguar and Land Rover models in China.
These are some of many such exploratory talks between automotive companies in the two countries. According to local manufacturers, almost every big Chinese automotive company, in motorcycles to smalls car and heavy trucks, is keenly exploring ways to come to India. This is despite no Chinese automotive company having tasted any success in India.
Beiqi Foton, one of China’s biggest commercial vehicle manufacturers, even signed an agreement in 2011 with the Maharashtra government for a Rs 1,700-crore manufacturing plant. However, nothing has moved.
“There is enormous interest in Chinese companies to come to India and invest,” said a top executive of an automotive company who was in dialogue with Great Wall Motors. “But there are no local business houses with interest in automotives left with whom they can partner with.” A mail sent to Great Wall Motors went unanswered.
At 13 cars for every 1,000 people, India (compared to China’s 44) has the lowest car penetration level among large developing nations. This is why Chinese companies are keen on entering here. At 2.5 million units of passenger vehicles sold last year, India pales in comparison to China, which sold nearly 18 mn.
Chinese brands in India have had a difficult past. Air-conditioned King Long buses, made in China and run by the BEST undertaking in this city were blacklisted after fires and breakdowns. China’s Lifan group, which partnered Delhi-based Monto Motors for selling motorcycles, had to shut shop after it found few takers.
Though Chinese branded products have not done well here, models engineered by them have been in the Indian market for some time. The Chevrolet Sail, Sail UVA and Enjoy, made by General Motors in India, were developed in China. SUVs such as the Premier Rio, Force One and ICML’s Extreme draw heavily from Chinese models.
“If the Chinese want to come to India, they will have to bring in an ecosystem like the Koreans did. Perception will not be a problem with the Chinese, as they would want to go the mass market,” said Anand Rangachary, an independent consultant.
