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| Edited By: Yuga Chaudhari |Source: DNA |Updated: Mar 30, 2018, 04:04 AM IST
The strong growth in passenger and commercial vehicle sales in the country has caught the fancy of Chinese original equipment manufacturers, going by Vikas Sehgal, partner at management consultancy Booz and Co India.
“Around 4-5 Chinese players are looking at going global and India could be one of their preferred destinations. Companies like First Auto Works (FAW), Geely, DongFeng Motor company, Chongqing Changan Automobile, Chery Automobile and Beigi Foton Motors are among the few companies that might look at India as a potential market considering their product portfolio,” said Sehgal.
Most of these companies are strong players in the passenger vehicles segment, though FAW and DongFeng Motor are also major CV players, said Sehgal. “With the kind of product portfolio Chinese automakers have, India is a very suitable market for these players.”
While SAIC has already announced its plans in India along with General Motors, LCV manufacturer Foton Motors is looking at setting up a plant in Pune.
According to Bloomberg, Chongqing Changan Automobile and Ford Motor are in talks to expand their partnership in India.
“The companies might have to invest anything between $600 million to $1.2 billion to set up operations in India. By 2015, we expect these companies to enter India,” said Sehgal.
A study just released by Booz & Co reveals that the global paradigm shift could see India become the fourth-biggest auto market by 2015, surpassing European nations like Germany, France and the UK.
“Looking at India’s strong growth rate, expect 2-3 new car manufacturing plants every year over the next 4-7 years. Around 2 million cars are sold in India. Even if we look at a growth of 10%, it will be crucial for manufacturers to come up with new plants,” he said.
New entrants like Volkswagen, Nissan and Renault will continue to shift more of their production to be closer to their biggest source of new customers.
With China and India ramping up in parallel directions, the global auto industry is sure to get reshaped, propelling Asia to capture 65% of the world market by 2020. “The volume of sales in India is steadily growing and India’s car market has the potential to grow up to 6 million units annually by 2020,” said the report.
