The Indian automobile market is one of the largest in the world, both just sheer volume and profitability. Most of the foreign automakers doing business here have dedicated strategies that could drive success in a country that is hell-bent for efficiency and affordability.
But this does not affect the specific market that deals with premium luxury and supercars. Irrespective of the country of origin, be it Japan (Honda), South Korea (Hyundai), German (Volkswagen) or American (Ford), all of the automakers have managed to taste success in India.
However, Chinese automakers are yet to make their presence in the subcontinent due to various reasons. In fact, quite contrary to other China-made product, automobile originating from the country has struggled to make an impactful presence in any other country other than their home.
Having said that, the situation might not be the same post the coronavirus pandemic. The sentiments of the common people pertaining to Chinese products will not be the same as a lot of people are swearing by to boycott their products. Even if 10% of these people manage to actually boycott China-made cars, it could be difficult for them to make a strong comeback.
Scope for Chinese automakers in India
Chinese automakers have created a major impression at the 2020 Auto Expo help in the first half of February 2020. A handful of them had already showcased their expected lineup and concept cars to gauge the response here. Some of the most notable ones were Haval, from GWM (Great Wall Motors) and FAW, Haima Automobile Company.
Moreover, Tata Motors is in talks with Chery Automobile, a China-based automaker to strategise the passenger vehicle businesses, including EVs. Being a strategic investor, Chery Automobile will help Tata Motors save costs and share investments. It could even add valuable technologies for future EVs.
However, China has already made an attempt in entering the Indian automobile circuit with the MG Hector, a British owned automaker by a subsidiary of SAIC. This attempt hasn’t been a very successful venture as it could not succeed as much as the automaker wanted. Moreover, the Kia Seltos, a direct competitor, managed to hog more of the popularity.
Would there be re-entries in the Indian automobile circuit post coronavirus?
Among the automakers that are in-line to make a comeback in the Indian market is Groupe PSA. However, the giant French auto brand has reconstructed its strategies here as it would not enter with the popular Peugeot brand. Instead, it will be making its way here with the Citreon since the company is eager to expand the brand outside of Europe too.
Groupe PSA’s strategy for the Indian market will be intact post the end of the pandemic and the Citreon C5 Aircross will be the first model to make its way around 2021, delayed by a year. However, this delay was notified about way back in 2018, more than a year before coronavirus pandemic happened. Further, the automaker has plans of introducing four new cars in India, including the C5. Though the first car is most likely to be a CKD unit, the following three will be locally made at the production plant in Tamil Nadu.
This development will be taken forward with the joint venture that Groupe PSA signed with CK Birla Group in 2017. This venture will see the two collaborating to produce passenger cars and engines locally in Tamil Nadu.
Precautions foreign automakers would take
With all the corporate sectors running through a period of uncertainty, there will be huge changes in the plan of action and strategy they adopt.
- Just like GWM and Haima Automobile Company, Groupe PSA might also delay their operations in a quest to recover from the economic impact of COVID-19. They would also be aware of the fact that regaining the position as a world-class exporter would take time, thereby affecting its economy in the short run.
- The Indian automobile market is also expected to run a low period even after the pandemic is over to recover from the impact. This will also test the new automakers on how well they can strategise their entry against some stalwarts in the segment, like Maruti Suzuki, Honda and the indigenous Tata Motors. However, the regular Indian and foreign automakers, except the Chinese, could become normal soon.
