Are the Chinese players afraid of the Indian markets?
China Car Times often wonders why the Chinese automotive manufactures arent taking a more pro active role in tackling the Indian subcontinent, we know that Chery have made certain inroads into Pakistan, but India remains off limits in some ways to the Chinese marques.
Why?
The reasons why Chinese car makers should be in India are obvious – India is a massive country, with a similar population size to China, the number of people who can afford to buy a car in India is growing day by day, just as it is in China. The market for mini cars to SUVs and pick up trucks is ready to grow at an extortionate rate over the next five years, as is the market for small Toyota Coaster type coaches, Chinas Chang’an motors makes such coaches. The American consulting company, Keystone, (a subsidary of Laselle) believes that by 2030, India will be the worlds third largest auto market after the US and China (althouh, China will most probably replace the US as no 1 by 2030)
Lack of Customers?
Maybe its a lack of a market for cars in India that keeps Chinese players away from India, but then again, maybe not. Although in some places it seems there are as little as 32 cars per 1000 people, and as high as 82 cars per 1000 people, the scope for car sales is just as big as China.
Who will win the race to the sub continent?
It seems that Chery are leading the way into the Indian subcontinent with their entry into the subcompact market, early news reports say that Chery were going to enter the Indian market with their QQ mini car, priced at 2.5 Lakh to 3.5 Lakh. The recent Tata Nano car was an amazing 1 Lakh, in comparison the QQ would be seen as an expensive import, but has a similar basic specification (except for the bigger engine) BYD has set up a battery factory in Chennai, India, but has yet to begin producing its line of cars in India.
The Competition
The competition from Indian marques seems very low. TATA seem to be the only company with interesting designs, and with much of India still rolling around in Hindustan Ambassadors (Morris Oxfords). The rest of Indian car makers seem to be joint ventures with Euro or Jap marques, what do the Chinese independent brands (Roewe, Chery, Geely, Lifan etc)really have to fear?
What do China Car Times readers think of the non action of Chinese makers in India?
(No Ratings Yet)
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If TATA relaunch Rover, then Roewe will be kind of an embarrasement. It will be like knocked off Casio LED watch made in China! Time for SAIC to focus on MG!
I think Chinese makers should try to get the largest market share in china first.
I think chinese car makers should try designing some original cars and sorting out their safety then and only then concentrating on building their market share. Otherwise they’ll churn out copied rubbish which isn’t safe!! In fact just like they’re doing now! The threat from India is real but then so is the threat from Europe, Japan and America.
Oh, Come on! You’ve ever heard India is a free-entry market? India has very strong regulations to protect her domestic players. As you said, there is not a lot of competition in India. It is not because Toyota, GM or even ford can’t come up with cars as attractive as TATA cars (BTW, TATA is truly a crap. Don’t be silly, TATA is even way behind its Chinese counterpart. I know most of us have very good wishes for this “democratic” country. But, please don’t mix your wishes and hard facts.)So, it is not fault of Chinese players (look at them, they even went to Iran! It is truly illogical why they don’t go to India.) Face the fact, India’s stupid trade protection keep them off! (especially for Chinese companies. because Indians want to sell cars to China not the other way around, as they believe)
well Simon,
I don’t know about regulations in India, so I will not speak about that.
I know that here in China a foreign OEM can not set up a production line on his own but only in JV with a Chinese OEM (and the Government must approve the JV and prefers that the foreigner stay below 49%). And I know that the import tax on car is so heavy that it makes sense importing only really expensive or niche cars (S-Class, Bentley, Ferrari, etc). Summing those factors, let me doubt that in the near future India will try to export to China…
Now it’s 3 years that I live here,so I’m not really updated; back in Europe I remember that the quality of Tata cars was low, but not awful as the one I’m used to see here from many local OEM. Speaking out of memory, I would say that Tata is the same league as Chery and Haima, that is much better than your average Changan or Geely…
Regarding Foreign OEM’s and ownership……a Chinese partner is not needed anymore under certain conditions.
this should not turn into a comparison discussion. India is not that protectionist to be honest, hyundai and suzuki doing ok there.
We haven’t seen any crash tests of indian cars , so i cannot comment on the quality.
I was not aware of the new rules… which are the conditions? Do you know if any foreign OEM already set up a company under the new rules? Thanks
Sorry I can’t give those details at the moment, even though it’s second hand news it does come from a good source. I was told it’s happening and govt. licenses have been issued…….it’ll be WOFE ventures not JV.
I’m sure the cat will be outa the bag before too long.
hello
I think that if this were the case Nick, that Fiat would have jumped at the chance to go it alone after its venture with NAC went sour. I suspect that all the foreign makers would opt out of the “49 percent” JV if they had the chance.
Honda was given an exception by Beijing when it opened a “for export only” plant. I believe it has 60% equity (not 100%) in that venture.
Of course the OEM parts makers are another case, as they can do WOFE in China.
Well it will be interesting how the changes you mentioned unfold Nick.
But while on the subject, what are the rules in India? Maybe the Chinese have found them most unfavorable and so are have gone elsewhere.
You are on the right lines with your Honda exception.
hey,let’s not turn this into a comparison thing. i think india is not that protectionist, hyundai and suzuki are doing ok there.
and about quality of indian cars, i cannot comment on that since we have not seen any crash tests of indian cars. btw does indian have any crash test regulations like the Cncap of China ?
Chinese companies should form joint ventures with indian comapnies and start manufacturing cars ,trucks and buses in india,Indian will get cheap and high quality cars at the earliest possble .
Why would India suddenly get cheap and high quality cars if they jumped into bed with China? When did either country make high quality cars? They both make cheap and cheerful (well not always cheerful) cars, but neither are known for the quality aspect!
By high quality I mean that which suits the Indian Road safety needs,not european or US road safey needs,which satifies the basic needs of the Indian family requirement not the US or European need of crossing the continents in car.
Considering how long TATA has been in the market and how long Chery or other Chinese car business are, it is really shameful for TATA to get this far after so many years.
Simon you seem to have a grudge against TATA, which is not there against Chinese
but a few facts here for you :
1. Chinese cars lack the base of engineering which is research, instead they go for the fastest available copies they can produce. what is better an example than QQ
2. Then again TATA has been around for a century in diverse industries
3. TATA gonna buy Land Rover, Jaguar and also building
the NANO.
4.
I think to summarize jin jin’s comment. Look at Japan’s Mitsubishi Heavy Indurstries, they manufacture all sorts of things, whether it’s cars, televisions, construction equipment. TATA is diversified like Mitsubishi and even Korea’s Hyundai group (heck, Hyundai even makes oil tankers). Not to knock the Chinese but I’ve seen more originally designed Indian cars than the Chinese even though India has a lower amount of car manufacturers. The cars aren’t pretty but they are original. China is on its way there as well but India won’t be a market to compete in until the Chinese market is saturated and there is no room for expansion in China.
Some Chinese co’s are equally diversified, Chery owns a shipping group!
The Chinese car market probably has the fastest growth rate in the world. It doesn’t make any sense for Chinese car companies to not concentrate in their own backyard first. It is best to leave India’s backyard to the Indian companies. What is the point of “non-profit” competition? The goal is to maximize profit.
I do have grudge toward TATA because I AM AN INDIAN! Of course, TATA is just like Mitsubishi and Hyundai. But, it doesn’t mean TATA will truly become a company like them one day. Let’s don’t forget the difference between countris like India and Korea. Korea is small and when Hyundai monopolized the market, it will go out and compete with others. However, TATA will only monopoly its market in India because it is big and profitable enough (BTW, it is protectd. Some of you argues that India is not that protectism. Then, just look around how many foreign car companies are doing business in China and how many are in India (Hyundai, Suzuki?). If a market is open and free, you should see something just like China or U.S. The domestic brands can only survive when they do have the guts to compete with other powerful players. Let’s look at the Chinese example. Would you agree the cut-throat competitions from foreign brands actually help Chinese domestic players to catch up quickier. Lots of people laughed when they saw Geely or other Chinese carmakers showed up at Detroit. But, think it for a second, is it the exact enterprenual spirit, energy and committment that can make a difference and shape a country?! Then look at our dear TATA! At least, Hyundai made Korean rich. What did TATA do? Spent millions to buy an apartment in Florida? Just like everything from Bollywood, pretend we are living as Americans. How pathetic!
simon you are not an Indian and not a proud one at that.
in fact pathetic.. take the challenge.. go and try to achieve 0.0000001% of what TATA has achieved in terms of profit or social workings. Buy a flat in Florida or buy a gift jet for the wife, is still ambition and drive to achieve.. that is what you lack.. dream on..
simon, india is protectionist when it comes to competing from similar markets . Mind if I ask, what Chinese product did you try to sell in India and loose out
Indian markets are I believe more open than Chinese markets. Most of the foreign companies in China are in JV’s with the government linked companies and that is because they based their market strategies based on size,population and their sales figures ten to 15 years ago. What they underestimated : India is powered only by TATA and Reliance and a semi protectionist social government of the time.They totally missed out the factor that India will be driven a lot by the power of the well educated masses and youth of the next generation
Wow this is some rant. Are you an ex-employee with a grudge? It’s a powerful rant but one which is not wholly correct. For example if hyundai are in such a good way why did it have to tie up with Kia and also have links in with Mitsubishi and Daimler-Benz (when they were around). If they were that cash rich then why would this happen? And yes you are right about the chinese having spirit and showing up at a show in the USA. But with what? Cars that were poorly built, poorly engineered and poor copies of Western Cars. There’s your answer as to why we laughed. Yes look at Tata, they like all companies have made mistakes but Tata is a private company and buying apartments in America wouldn’t cost the Indian people anything. so what exactly is your point? It’s kinda lost in all the anger you’re showing!!
I think that almost all chinese cars can be succesfully launched in India and they can succesfully compete in the market .But india is Right hand drive.Initially Chinese companies should push for manufacturing in India via joint ventures.Indians require cheap and high quality cars ..”Win Win” slogan of the China should be implemented in full earnest.TATA has targeted the bajaj auto three wheeler market(which sells at 1.4lac) which is used for taxi by launching the Nano i.e 1 lac car.Soon all the three wheelers in India will be replaced by TATA nano.
Indian markets are I believe more open than Chinese markets. Most of the foreign companies in China are in JV’s with the government linked companies and that is because they based their market strategies based on size,population and their sales figures ten to 15 years ago. What they underestimated : India is powered only by TATA and Reliance and a semi protectionist social government of the time.They totally missed out the factor that India will be driven a lot by the power of the well educated masses and youth of the next generation
If NANO or TATA may be derided by a few,include Indians, I still believe they have woken up a lot of world notice and may change ways how things work
Calm down simon,
I think tata is doing pretty well in its own indian market, i think tata needs more time, it is good for tata to monopolise its own domestic market anyway.
Mememe: Economic theories may have lots of problems and economists may never come to consensus on any issues. But, in economics, regardless of theories or empiricals, it has been proved monopoly: lack of competition, will not save a company but will destroy it. This monopoly will only jeopardize efficiency of the economy. It is stunning to me that how many of you need some basic economic educations.
It is stunning how condescending you sound on this forum. This is a car forum not a lecturing hall discussing how ‘lacking’ we all are in economics.
I suggest that if you have a point you want to get across about cars then make it. But do not come on this attacking everyone else and talking down to us. This is not on.
so if you’ve something constructive to say then say it otherwise keep quiet!
well said colin.. fact is that we, me included have left the main topic of discussion and gone to compare economies and individual rants.
I have seen cars of foreign companies(GM,FORD etc) in Indian Markets with quality 40% comparison to India Cars.
So with the price that of Indian cars, Forieners can not compete here. Event if You have to stay in Indian Market your car’s lowest model should start from as low as INR 2.5 Lacs.
Good Luck China and others.