ManagementChina auto biz enters India
Chinese auto component manufacturers are quietly making inroads into India. Over 100-odd companies, ranging from the largest truck engine manufacturer FAW Group, to medium-sized players like gear-box maker Weichai Power, are at the 10th Auto Expo in Delhi showcasing their products to the local commercial vehicle manufacturers.
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The largest contingent of Chinese companies, perhaps for the first time in terms of numbers, at the expo are looking at options like joint ventures with Indian partners, setting up manufacturing base and after-sales service operations, and directly exporting from China by appointing Indian distributors. They are also cashing in on their low price model.
“India is growing and demand for trucks is more. Indian consumers need good quality products at the right price, which our products can meet. We are 40-50 per cent cheaper than competitors,” said Wang Yuhe, manager of international service department at Weichai Power.
With Tata Motors, Eicher-Volvo, Ashok Leyland and Mahindra & Mahindra (M&M) launching large trucks at the expo, the commercial vehicle market is expected to grow 20 per cent annually.
The Chinese auto component makers are already a force to reckon with in India, constituting over 10 per cent of the $4.5 billion components imported in the country. While auto component imports have grown by 30 per cent, Chinese components to India have grown much faster at 100 per cent.
The Chinese are also making a determined bid to shrug off the “low quality” tag attached to their products. “Our quality is internationally tested and accepted by all large commercial vehicle manufacturers,” said Amixi Zhong, export manager of Zhejiang Zhong TIE Autoparts, which manufactures airbrake systems of heavy commercial vehicles.
Commercial vehicle manufactures say they would buy from the Chinese if their costs are cheaper. “We import Chinese components only if the landed cost is 10 per cent lower,” said Pawan Goenka, president, automotive sector, M&M.
“The key issue for us is quality and if that is taken care of we are not adverse to importing from them,” said Somnath Bhattacharjee, president, Volvo Trucks India.