One of Changan's first models, if not the first, is set to be the CS 75 Plus SUV; Geely also a mass market car brand, but as it doesn't have any right-hand-drive models is plotting a Proton-led model strategy.
19 Nov 2019 | 33121 Views | By Sumantra B Barooah
"Chinese brands are facing lot of difficulties," Zhu Huarong, president, Changan Automobile Company, had said in a conference three years ago. He was speaking in the context of the growing need for Chinese OEMs to be strong players independently to overcome the growing competition. Almost all Chinese majors have joint ...
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"Chinese brands are facing lot of difficulties," Zhu Huarong, president, Changan Automobile Company, had said in a conference three years ago. He was speaking in the context of the growing need for Chinese OEMs to be strong players independently to overcome the growing competition. Almost all Chinese majors have joint ventures with European, American brands. Expanding overseas is a strategy that Chinese OEMs want to pursue. According to sources in China, Changan started researching the Indian market a few years ago, which included visits to India too.
Now, it seems the plans are getting finalised. According to an industry source, Changan's India market entry is likely to be in 2022. One of Changan's first models, if not the first, is set to be the CS 75 Plus SUV, a newer version of its CS75. The C-segment SUV is also Changan's bestseller currently. CS 55 Plus and CS 35 Plus SUV models complete the top three bestsellers' list. The CS 35 is the smallest of the lot with a length of 4.2 metres. But with the ever-growing competition, made worse by the economy slowdown, is there still for yet another OEM?
One of Changan's first models, if not the first, for India is set to be the CS 75 Plus SUV, a newer version of its CS75. The C-segment SUV is also Changan's bestseller currently.
"Of course, there's room for another player. The number of cars per 1000 population can grow exponentially, with the improvement of the economy and growth in per capita income," says Vinay Piparsania, consulting director - automotive, at research firm Counterpoint Technology Market Research, and a former director at Ford Asia Pacific. New players will have to address a potential concern too. "If a brand doesn't appeal or the product doesn't perform, the Indian consumer can be ruthless," says Piparsania.
Many Chinese OEMs, including Changan, have developed strong capabilities in electric vehicle (EV) technology, and that may offer another opportunity for them in India, where the government is betting for EVs as the future of mobility. Changan has also developed and demonstrated its capability in autonomous driving technology. A few years ago, two of its autonomous driving cars did a 2,000-kilometre Chongqing-Beijing drive successfully.
Changan also has a commercial vehicle (CV) business, which did weigh the India market entry strategy. Domination of the Indian CV market by very strong local players may have dampened the plans.
For the passenger vehicle business, India has 'great potential to be a global production base' too for Changan, according to a source aware of Changan's plan. The OEM has set up a liaison office in Delhi and has roped in G Sanjay, an auto industry professional who has had stints with major OEMS in India, to help build the commercial team.
The industry slowdown in China, the world's largest market for IC engined vehicles and EVs, and China's trade war with USA may also be boosting up Chinese OEMs' overseas expansion plans. India, set to be the third largest car market in a couple of years, becomes an obvious choice. For the January-September period, sales of passenger cars in China fell 12 percent year-on-year, to 15,249,000 units. The Chinese SUV market also fell by over 9 percent during this period.
Geely plots Proton-led India market entry
Geely, another Chinese auto major which owns Volvo Cars at the premium end, and co-owns Malaysian carmaker Proton, is also learnt to be eyeing the Indian PV market. Geely also is a mass market car brand, but it doesn't have any right-hand drive models. According to a source, Geely will field the Proton brand in the Indian passenger vehicle game.
Great Wall, another Chinese OEM, has already set up office in India and is preparing for market entry.
With a growing number of Indian consumers becoming brand averse, in multiple sectors, new players in the automobile industry can expect to play a good innings provided the requisite factors are in place well in time. As for Chinese players, the performance of some Chinese mobile handset brands leading the Indian market, and the initial market response of China's SAIC-owned MG brand may fuel hopes of the likes of Changan, Great Wall and Geely.
During his speech, Huarong had listed down four key points for achieving good performance. They are, ability to provide good products and services, quickly respond to market demand, mobilise and tap into big data, and diversfied ways to achieve profit. Changan may be pulling all these triggers.
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