Recently, Indian media reported that Sujiaduo Sen, an executive of the Indian Automobile Manufacturers Association, said that China Great Wall Motors is preparing to establish a wholly-owned subsidiary of the company in India, while another Chinese commercial vehicle company, Beiqi Foton Motor Then prepare another factory in India.
Great Wall å¾˜å¾Š Foton rushes
On December 18, the Auto Business Daily reporter called Great Wall Motor and Foton Motor respectively to verify the authenticity of the news.
â€œIn fact, we are still inspecting this matter. There is no final decision. Of course, the timing conditions are ripe. We will go in. We will enter in the form of a wholly-owned subsidiary or enter into a joint venture. "Xing Wenlin, Vice President of Great Wall Motor Co., Ltd. and General Manager of the International Department, told the Auto Business Daily reporter.
The insider of Foton Motor Indiaâ€™s automotive division also told the Auto Business Daily: â€œFukuda's factory in India is still under construction. The first factory has not been built and it is impossible to invest in another factory. However, this year it is indeed Adding RMB 478 million in investment to Foton Motors India subsidiary."
It is understood that due to optimistic about the Indian commercial vehicle market, but because India's import tariffs on vehicles as high as 24%, so Beiqi Foton Motor Company decided last year in India to invest 387 million US dollars to establish a wholly-owned subsidiary - Foton Motor India Manufacturing Co., Ltd. Headquartered in Mumbai, and building a plant in Maharashtra state in western India, the design capacity of the plant is:
The first stage is 96,000 units/year; the second stage is 120,000 units/year, and the plant is expected to be completed in July 2013. In addition, within the Foton Motor Group, the India Division was established. More than 90% of the division will recruit talents in India. It is reported that Foton Motor is the first Chinese automaker to invest in and build a factory in India.
According to sources from Foton Motor Indiaâ€™s business division, the future of Foton Motorâ€™s full range of commercial vehicles will be realized in India. Because India is the right rudder market, Futian Automobile's future cars produced in India can be exported to other world-renowned rudder markets.
"Now China's auto industry is already in a period of steady growth, and it is expected that the next cycle of growth of commercial vehicles in India will peak between 2013 and 2015," the source said.
Potential lack of motivation
Although, in the view of Foton Motors, India's commercial vehicle market is full of business opportunities, but for many Chinese companies, the Indian market is also a great risk.
â€œAt the moment, we donâ€™t really export cars to India. There are only show cars and prototype cars in the region. The reason why it has not been entered is because Indiaâ€™s passenger car market is mainly monopolized by international and its own local auto giants, such as Suzuki. Large groups such as Tata, if we rush in and compete with them, will be in a very disadvantageous position. On the other hand, our country and India have violent conflicts over the border issue, and the border issue has not yet been resolved. We worry that we Some of Indiaâ€™s people will be in conflict with their products.â€ Xing Wenlin told reporters why the Great Wall Motor has not delayed its march to India.
Du Fangci, deputy secretary-general of the China Association of Automobile Manufacturers, also told reporters: â€œAs one of the BRIC countries, Indiaâ€™s GDP growth rate has increased at an average rate of 8% in recent years. Even in 2010, its growth rate exceeded that of China for the first time. Its population will also surpass China in the future and become the worldâ€™s most populous country. However, compared to China, most of its population is still very poor, and its consumption potential is still quite limited.â€
However, some experts pointed out that the Indian middle class as the main potential automobile consumer has a population of only 220 million, which accounts for about 20% of the countryâ€™s total population. However, its average wage is only 10,000 to 2 million rupees a year, which is equivalent to RMB. More than 1,000 to more than 2,000 yuan, completely different from the Chinese traditional sense of the middle class, which led to the majority of the middle class can not afford to buy a car, and in addition to the vast majority of India's population is completely below the poverty line.
Ashwin Khoti, Managing Director of Londonâ€™s Asian Automobile Intelligence Agency, also believes that â€œthe Indian auto industry is at least 25 years behind Chinaâ€.
Large enterprises monopolize the low end of the market
â€œSince most people are still very poor, it is very difficult for the mid- to high-class cars to be sold in India, but small cars are more marketed in India,â€ Du Fangci said.
According to the data released by the Indian Automobile Manufacturers Association, small passenger cars can be described as the best in the Indian market. In 2010, Indian passenger cars sold 1.87 million vehicles, of which 1.45 million were mini vehicles.
Du Fangci further pointed out that although the products of China's own-brand enterprises are mostly low-end products, due to the fact that many auto manufacturers in India are competing for the mini-vehicle market and competing to launch low-priced products, the profits of such products have been reduced to very low prices. low. "First-time visitors can only lose money!"
It is understood that in order to compete for the low-end mini-car market, in July 2009, Indiaâ€™s Tata Group launched the Nano, which is known as â€œthe worldâ€™s cheapest mini-carâ€ and costs only 100,000 rupees per vehicle (about 2,000 U.S. dollars. RMB 12,800,000), which is close to the price of motorcycles, is known as the "people's car."
"In this case, if the products of Chinese companies go in, they will not be able to make any money. Even the investment costs of the previous period will not be paid back," Du Fangci said.
In addition, experts also pointed out that although India has a relatively cheap labor force, in the automotive sector, the unions of auto workers have performed very strongly, and strikes have occurred from time to time. Since the second half of 2011, workers of the Suzuki company in India have held a long strike, which has caused huge losses for the vehicle manufacturers.
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