Many automakers from China, the world’s largest car market, are sealing agreements with their Indian counterparts in a bid to sell their competitively-priced brands in the fastest-growing car market.
Chinese carmakers such as Chery Automobile, China FAW Group, Great Wall Motor Co and Zotye Auto are looking to get a foothold here after setting up operations in Latin America, Eastern Europe, Africa and Russia.
“The Indian auto market is very price and value sensitive. China too is a developing economy offering price-competitive products, and there is a lot of opportunity,” said Ravi Santhanam, managing director of Hindustan Motors.
Doshi family-promoted Premier, one of country’s oldest car companies, has partnered Zotye Auto to launch its Zotye 2008 compact sports utility vehicle (SUV) in the Indian market. The base variant of the mini SUV is expected to be priced at Rs 5 lakh, the cost of a mid-size sedan.
Asia MotorWorks, owned by Mumbai-based entrepreneur Anirudh Bhuwalka, one of the new entrants in the commercial vehicles space, imports heavy truck kits from China, while Hindustan Motors has tied up with Shandong Shifeng to import knocked-down kits of mini trucks from the company.
The maker of Ambassador cars plans to initially assemble 1,000 mini trucks per month. Other domestic auto players such as Bajaj Auto and Asia MotorWorks are buying parts and kits from China to retain competitiveness.
Two-wheeler maker Bajaj Auto has begun buying parts for its export vehicles from China, a strategy that has helped it gain price-competitiveness in African and Asean markets. However, the company continues to make the engines for these export models at its Indian plants.
A stickler for specifics, Bajaj Auto has stationed its staff at the Chinese suppliers to ensure they stick to its specified quality levels.
Other Chinese firms such as Chery, FAW and Great Wall, have had discussions with potential Indian partners to enter the country.
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Source: Financial Times