Prudence on India
In the Fukuda overseas strategy, India and Russia are the focus of its current investment, and the Indian market is advancing faster than planned. As early as five years ago, Fukuda began its research on the Indian market, and in April 2011, it signed an investment letter of intent with the Indian government to begin formal distribution of the Indian market.
So far, Fukuda has increased its investment in Indian plants three times in succession, and announced that it has invested more than 2 billion yuan in the development of the Indian market, and has set up a business unit in India. At present, the approval of the local land has been basically completed. The Indian branch mainly produces medium-duty trucks, light trucks, and commercial vehicles until it reaches the entire department of Futian.
In addition to Fukuda, the Great Wall is also quite concerned about India. “The current Great Wall’s specific plans for the Indian market have not yet been implemented. As private enterprises, we need to be more cautious in our decision-making.†The relevant executives of Great Wall Motor International Sales said that in early 2012, Great Wall Motors began to identify India as a strategic market, and last year The Indian project team was formally established in May. At present, the project team has completed preliminary research on the Indian market, including product planning, site selection and other work are already in progress.
Levels
With regard to this auto consumption market, which is second only to China's Indian auto market, Chinese auto companies' attitudes are cautious and the progress is also very slow. According to the investigation of this newspaper, the reason is that Chinese auto companies have multiple levels of development in the Indian auto market. Breakthrough.
The first level is a heavy car consumption tax. At present, China's auto consumption tax is approximately 5% to 10% of the vehicle price, but it is as high as 20% to 24% in India and even 30% in 2013. In addition, the weak industrial base and talent reserves have become another important factor restricting the development of the Indian automobile industry.
Second, India's auto manufacturing level is low, and the cost advantage of employing is not obvious. Industry analysts pointed out that due to the fact that a complete industrial system has not yet been established, many parts and components in India's automotive industry chain are still not self-produced. The labor efficiency of Indian local auto workers is generally lower than that of China.
In addition, local Indian products are also highly competitive. “The market potential in India is relatively large, similar to the Chinese market decades ago. However, its heavy-duty trucks have limited export space and the market is very unstable. The policy risks are relatively large. Coupled with the high share of local truck manufacturers, the product's cost performance Also higher.†A related person from Hualing Automotive Overseas stated that it is difficult for the Indian market to enter.
However, things always have two sides. At present, India has not yet established a complete industrial system. Many parts and components cannot be produced, and the illiteracy rate is as high as 35%. It is impossible for the truck industry to achieve long-term rapid development on this basis. In the core technology, it is basically blank. In addition, India has a small number of truck companies, mainly three, that is, Tata, Ashcroft, heroes, and low-end truck sales accounted for 90% of the Indian market. The monopolistic tendencies of local truck companies in India have caused insufficient market competition, further slowing the pace of technological innovation. This is a development opportunity for Chinese trucks.
Three things to watch
After Li Keqiang visited India, the prospects for the development of China and India are promising in the industry. Former Chinese ambassador to India Zhou Gang believed that the three major aspects of Sino-Indian cooperation are: first, the two sides will increase cooperation in the financial sector and provide convenience for the two countries to open bank branches in each other. Secondly, to strengthen the cooperation between the two countries in the field of infrastructure construction, China’s project contracting business in India has developed rapidly. By the end of last year, the contractual amount exceeded 60 billion US dollars. However, there is still room for development, including vast space. Railways, high-speed rail, communications, highways, energy.
In addition, Zhou Gang also believes that both sides will open up new areas of cooperation. For example, building science and technology parks and carrying out sub-regional economic cooperation, such as the economic corridors between China, India, Myanmar, and Bangladesh. At the China Automobile Forum, SugatoSen, senior director of the Indian Automobile Industry Association, delivered a keynote speech and said: “India’s infrastructure construction has also made great progress in recent years. Now that other infrastructure is announced, it is still not perfect, but it has developed. very fast."
SugatoSen pointed out that India’s research on roads is also very beneficial to the development of the automotive industry. The gap between urban and rural areas in India is very large. In rural areas, it accounts for 70% of the total population and 50% of GDP, and 60% of consumption. I think that regardless of whether it is manufacturing commercial vehicles or other types of automobiles, the rural population should be taken into account. Demand.
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