Going to India to visit China

Traffic conditions on the streets of India are chaotic and busy most of the time.

In the stagnation of traditional auto markets such as North America, Europe and Japan, multinational auto giants are gaining momentum with emerging markets such as China, India, Russia and South America.

Going out and opening up to those lower-tier emerging markets is a strategy that has been adopted by domestic auto manufacturers in recent years. Markets such as the Middle East, North Africa, South America, the Commonwealth of Independent States, and Eastern Europe are the battlefields where domestic automakers are most keen to advance in recent years. In fact, there is no need to go around so far. In less than five hours from Guangzhou, less than seven hours from Shanghai, and less than ten hours from Beijing, local Chinese auto makers Faced with great market opportunities - this is India.

Indian car market comparable to "gold mine"

Last week, by visiting the SAIC General Motors India company, the Southern Reporter had a basic understanding of the Indian auto market.

At present, the population of India has surpassed 1.22 billion. If there is no restriction on maternity, China will surpass China to become the world’s most populous country in five years. From an age point of view, more than 50% of the population in India is under the age of 25, and the population under the age of 35 is as high as 65%. In recent years, India’s socio-economic development has been rapid, and GDP growth has been comparable to and even faster than that of China.

At present, of the 190 million families in India, there are more than 47 million so-called middle class families whose annual household income exceeds $5,000. What's more, the comparison of middle-class households in India and their vanity are nothing less than the Chinese (if you ask the Indian middle-class family whether or not they have a house, they will often tell you how many cars there are in the family). With the middle class generally unable to afford housing, car consumption has become one of the fastest growing consumer categories in India in recent years. In 2010, the number of Indians with 1,000 cars was 18, and just two years ago, the figure was still "7".

It is true that the market environment and infrastructure of the auto market in India are very similar to those of China in the late 1980s. Of course, the Indian auto market is not a "sleeping" gold mine. In addition to the rapid development of the auto market in recent years and the rapid development of the auto market in recent years, apart from the relatively small number of auto brands in India compared to China, the international brands Suzuki, Hyundai, Honda, Toyota, Mitsubishi, Mazda, General Motors, Fiat, Daimler, BMW, Skoda, Volkswagen and Renault Nissan also all rushed into India. Just from the point of view of the brand, the fierce competition in the Indian automobile market is obviously not much lower than that of China.

This year, the auto market in India will exceed 3.55 million, of which sales of passenger cars are expected to exceed 2 million. In 2015, the auto market in India will reach 5.8 million, of which sales of passenger cars will exceed 3.5 million. In the automobile market structure of India, a very important feature is that the mini-car, which is the domestically-known AO-class vehicle market, accounts for more than 70% of the Indian automobile market.

In 2010, India sold 1.85 million passenger cars, of which 1.45 million were micro-cars. Mini-cars accounted for more than 75% of passenger cars and accounted for more than 60% of the total car market.

"Indians mainly look for prices for cars. The purchasing factors are cost-effectiveness, fuel economy, operating costs, maintenance costs, value of used cars, and then considerations such as configuration, shape comfort and safety." General Manager of PR, India Balendran told reporters in this way.

Chinese domestic manufacturers have the opportunity

On the other hand, in the auto market in India, GM, Toyota, and Volkswagen, the “big names” of Chinese or global markets, all “stand by” on the sales charts. The top three rankings in India's passenger vehicle market are Suzuki, Hyundai and Tata. The proportion of the three companies occupying the Indian passenger car market is 46%, 22% and 18% respectively. Although General Motors has been "awakening and awakening" in the Indian market since 2003, it is also currently ranked fifth with a 5% market share in passenger cars.

In India, even in metropolises such as New Delhi and Mumbai, it is difficult to see one or two domestic 4S shops that are commonplace in China. “The level of India’s automotive marketing industry is generally at least five years behind the country!” said Wen Liefeng, General Market Director of India, to the reporter. Obviously, Chinese domestic auto makers have been battling the marketing system for many years in the market, and entering the Indian market will also have advantages.

At present, the Chinese automotive manufacturers have the largest impact in the Indian automotive industry, SAIC and SAIC-GM-Wuling.

At the end of 2009, GM and SAIC reached an agreement. Each of the two companies holds 50% of its shares and establishes GM Shanghai Automotive Hong Kong Investment Co., Ltd., starting from the Indian market to jointly develop emerging markets in Asia. General Motors Shanghai Hong Kong Investment Company acquired two OEMs, an engine plant and Chevrolet Sales Co., Ltd. of the former General India Company and restructured into a new general-purpose Indian joint venture. In accordance with the principle of "product output, business model output, and management team output" agreed by SAIC and GM, SAIC-GM-Wuling Deputy Prime Minister Yao Zuoping is currently heading the General India Business as general manager of General India. In 2009, GM sold less than 70,000 vehicles in the Indian market, and in 2010 it surged 50% and exceeded 110,000.

“The original GM India factory has good management quality and standardization, but it is doing very well, but its efficiency is very poor. The marginal contribution of almost all models is lower than the structural cost, which is similar to that of GM. The other is the small platform and high structural cost. "Yao Zuoping said. Yao said that the reason why GM is willing to cooperate with SAIC and SAIC-GM-Wuling to jointly develop the Indian market is an important reason that Chinese automakers are able to reduce costs and can develop "low-cost, high-value" products. "In addition to Chinese partners, GM could not find a business model and product system more suitable for the Indian market in its global system, and other international brands are also facing this problem!"

It is understood that in March and June of next year, GM India will be producing the sedan new sedan and hatchback new sedan independently developed by Shanghai General Motors at the T elegaon plant in Pune, Mumbai. Later in the year, GM India's other Halol plant in northern India will also begin production of CN 100 (Wuling Hongguang) and N200 (Wuling Hongtu) from SAIC-GM-Wuling.