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Soon Indians will be driving ‘Made in China’ cars

February 15, 2011

Even as rubber, oil and steel prices soar on the inflation highway , Chinese auto companies are revving up their engines to cruise into the Indian market.  Even though India’s roads might be congested and cars fight tooth and jowl as infrastructure creeks, the auto market is expected to become the fourth largest globally. In 2010, India was one of the largest car markets in the world logging 30 percent plus growth with 2.3 million cars being sold during the year. According to forecasts by Booz & Company by 2030, India’s automotive sales will likely overtake the US market to touch an expected revenue of US$150-200 billion with 11.7 million light passenger vehicles being sold. To enable this growth, the Indian automobile sector is expected to attract FDI of US$25-35 billion in the next 10 years. Chicago-based Vikas Sehgal, partner, Booz & Company, India, was quoted as saying.

While India is China’s largest auto component supplier, several car manufacturers are interested in India’s growing passenger and truck markets. The interested players include Jianghuai Automobile Company (JAC), Brilliance Auto, Chery international, Build Your Dreams (BYD) and Beiqi Foton.

Recently SAIC, a Chinese auto major which picked a majority stake in General Motors India plans to launch its Wuling range of trucks in the country by 2011. The SAIC_GM combine also plans to launch three cars and two light trucks by end-2012 and it remains to be seen if a ‘people’s car’ will be part of this product line-up. GM already has offerings in the form of the Chevrolet Spark and Beat, but these are in the Rs 0.3-0.4 million price range. “An option in the Rs 0.2 million bracket will be a big attraction to customers with limited budgets,” sources said. In expanding India’s city transport systems China’s Zhuzhou Electric Locomotive Company Limited (ZELC), one of the country’s biggest locomotive makers and a subsidiary of China South Locomotive & Rolling (CSR) recently signed a contract to supply subway trains to India.

Some of the Chinese truck makers that are considering launching in the Indian market are  Foton which has competitively priced models in the low- to mid-range, popularly called the Forland series. Foton plans to directly enter the Indian market by setting up a plant in Pune. Similarly, China-based FAW has a tie up with Ural India to market buses and manufacture dumpers, trucks and low-floor buses.

Additionally Chery which is China’s most popular car is understood to be evaluating India’s passenger car market. Meanwhile, Brilliance Auto, which markets passenger cars under the ‘Brilliance’ brand and mini buses and cargo vans under the ‘Jinbei’ label, is also gearing up to make its foray into India.

 

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