Chinas car companies flock to India: looking for a new market for small electric vehicles

category:Finance
 Chinas car companies flock to India: looking for a new market for small electric vehicles


As early as 2016, Great Wall Motors R & D center in Bangalore, India, has begun to operate. At present, there are 150 Indian R & D personnel, who are mainly engaged in the development of new energy and automatic driving software. In February 2019, Great Wall Motor set up a subsidiary in India. In January 2020, Great Wall Motor and GM reached an agreement on the acquisition of GMs taligang plant in India, The acquisition is expected to be completed in the second half of 2020. At that time, Great Wall Motors will take advantage of Indian factories to radiate the Middle East and African markets.

From 2017 to 2018, the growth rate of SUV in Indian market is seven times that of other passenger vehicles, and almost all manufacturers have increased SUV models. An Qingheng, director of the China Automotive Industry Advisory Committee, pointed out that Indias automotive industry has many advantages, such as the infrastructure needed by the manufacturing industry, low-cost labor, the software advantages of the Indian automotive industry and the growing middle class. According to the prediction of fourin, a professional research company in the worlds automobile industry, Indias automobile production will reach 7 million by 2022 and 11.9 million by 2030. At the same time, the countrys sales volume will reach 5.8 million vehicles by 2022 and exceed the 10 million vehicle mark by 2030. Depending on the stable economic growth situation and the dividend of more young people, India is likely to become the worlds largest growth market in the future after China.

However, since autumn 2018, the Indian car market has faced unprecedented challenges. Indias economic growth and loan slowdown, coupled with the rise in automobile insurance premiums and taxes, have led to a lack of consumer confidence among many consumers, which has also led to the first decline in the Indian car market in five years. According to the wholesale data (excluding luxury brands) of auto punditz, the total sales volume of passenger vehicles in India in 2019 was 2.936 million, down 12.4% year-on-year, which was also the biggest decline in the past 20 years.

In addition, most of the models sold in the Indian market are reliable and low-cost small cars. The top four car companies are Maruti Suzuki, Hyundai, Mahinda and Tata, accounting for about 80% of the market share, of which Suzuki accounts for the largest proportion. Small SUVs are becoming the development trend of Indian automobile market. Take the sales volume in December 2019 as an example, the sales volume of compact SUVs reached 34000, an increase of 70% year on year.

In addition to Great Wall Motors, SAIC, BYD, Beiqi Foton, etc. have made some layout in the Indian market before. Among them, SAIC received 31000 orders in three months after it was put into production in 2019. According to foreign media reports, Changan automobile is also looking for a production base in India recently, and considering whether to establish an electric vehicle battery assembly plant in India to prepare for the development of new energy vehicles in the future. In addition, seahorse also announced the strategic layout of emerging markets such as India.

Indias small cars are favored, and electric vehicles are likely to be concentrated in this market in the future. At present, China has cancelled the subsidy for new energy vehicles with driving mileage less than 150 km, and the sales volume of small electric vehicles has declined significantly, so the products need to find alternative markets urgently.

The current development of Indian auto market is equivalent to that of Chinas auto market around 2002, which is in the stage of popularization, so low price is the first factor. Due to cost factors, American and European cars are more expensive or have no low price at all, so their performance in India is relatively weak. In contrast, Chinese car companies have advantages in the small car market segment and cost performance, and development in India is a better opportunity. Luo Lei, deputy secretary-general of China Automobile Circulation Association, told the first financial reporter, but for the electric vehicle market, India is in its infancy and has a small market share. Because Indias small cars are favored, electric vehicles may also be concentrated in this market in the future. In addition, some analysts believe that at present, China has cancelled the subsidy for low mileage new energy vehicles, and the sales volume of small electric vehicles has declined significantly, so the products need to find alternative markets. Source: First Financial Editor: Guo Chenqi, nbj9931

The current development of Indian auto market is equivalent to that of Chinas auto market around 2002, which is in the stage of popularization, so low price is the first factor. Due to cost factors, American and European cars are more expensive or have no low price at all, so their performance in India is relatively weak. In contrast, Chinese car companies have advantages in the small car market segment and cost performance, and development in India is a better opportunity. Luo Lei, deputy secretary-general of China Automobile Circulation Association, told the first financial reporter, but for the electric vehicle market, India is in its infancy and has a small market share. Because Indias small cars are favored, electric vehicles may also be concentrated in this market in the future. In addition, some analysts believe that at present, China has cancelled the subsidy for low mileage new energy vehicles, and the sales volume of small electric vehicles has declined significantly, so the products need to find alternative markets.