- Chinese car manufacturers Great Wall Motor (GWM) and
FAW Haima showcased their first vehicles for the Indian market in the Auto Expo 2020. - The news came after China’s car sales tumbled for the second year in a row, analysts are unsure of the recovery.
- HS Markit estimated India to take over Japan by 2025 and become the world’s third-largest car market after China.
Chinese car manufacturers Great Wall Motor (GWM) and FAW Haima showcased their first vehicles in India at the Auto Expo in February. FAW Hamina will also be launching FAW Haima 8S, a mid-size SUV in India.
Chinese manufacturer
This will bring a new phase of competition in the Indian car market, said Motilal Oswal brokerage. Currently, Japanese joint venture
Added to that, the market is also replete with German and other foreign automakers like Ford, Skoda, Renault and Audi. And these existing market players too had to resort to price cuts and other measures to clear their inventory ahead of a change in emission regulation would make BSIV cars irrelevant to the market. The Indian government has decided to disallow the sale of cars that do not cater to BSVI norms by April 2020.
In spite of a sales slowdown, the demand however is higher for those cars which comply with changed emission norms. MG Hector belongs to this category. Both its launches were successful as the bookings crossed 50,000 units in eight months since its launch.
Another recent entrant is the South Korea-based Kia Motors, which debuted with Kia Seltos, a mid size SUV in August 2019. Seltos became another hot seller that gave tough competition to Hector. And now, Kia has launched its second car in the market – Kia Carnival. Kia’s cars too are BSVI compliant.
Chinese auto giants need India
A new market is necessary for Chinese car makers as their sales tumbled for the second year in a row.
A reason for the declining sales could be Beijing’s one-car policy. Several Chinese cities over the last few years introduced a quota on car ownership, which limits the number of new cars registered in the city during a year. It also states that only one car can be registered locally per person.
According to the China Association of Automobile Manufacturers, the sales dropped almost 8.2% to 25.8 million vehicles in 2019.
Puneet Gupta, an analyst at
IHS Markit estimated that India will overtake Japan by 2025 to become the world’s third-largest car market after China. And China is keen on reaching out to this emerging market.
GWM unveiled its Haval brand of a sport utility vehicle (SUV) and vehicle concept 2025 during the Auto Expo 2020. It also plans to invest around ₹7,000 crore in India in manufacturing plants, vehicle research and development, production of power batteries and electric drives, vehicle and component manufacturing.
They are also ready for the regulatory challenges that the market presents. “With the BS-VI kicking in we need to gauge the sentiment. We are preparing for that as we have 10 global Research & Development centres that equip us to prepare anything and everything that is required to bring and make it successful in India,” Hardeep Singh Barar, sales director at GWM told ET Auto.
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