Chinese SUV Giant Enters Indian Market
At a time when automobile giants are pulling
back on investments from India, Chinese car makers may prove to be the savior
for the Indian automobile industry. At Least 6 companies are speculated to
bring $5 billion into the industry.
BY
HARSHIT GUPTA | 3 min read
Amidst a
severe slowdown in the market, China’s largest SUV maker, Great Wall Motors,
has registered an Indian subsidiary "Haval Motor India". Established
in 1984, Great Wall initially manufactured only trucks, not producing a sedan
car until 2010. Great Wall Motors has been a very successful producer of
pick-up trucks, reaching top position in the Chinese pick-up truck market in
1998. The company is planning to invest approximately ₹7,000 Crores into the
market. Great Wall Motors is forming a subsidiary in India in order to pay less
tax, and direct the assets towards research and development. This move comes
despite the Indian automobile market
being in a slump.
The
company will set its headquarters in Gurgaon. The firm had previously
shortlisted five states for manufacturing base, i.e. Maharashtra, Gujarat,
Karnataka, Andhra Pradesh and Tamil Nadu. But now, Maharashtra seems to be the
first choice. The company is eyeing the General Motors facility in Talegaon,
Pune which currently makes GM's export models. By acquiring this working plant,
the company would be able to roll out their product by mid-2021 otherwise it
would be delayed a year. Great Wall Motors is also looking for a meeting with
the Maharashtra CM but recent political disturbances has delayed the same.
Another
point to note is that Haval Motor India registered before October. What this
means is that it will not be eligible for the corporate tax cut that came into
effect from October and will have to pay 25% instead of decreased 15%.
However,
Great Wall Motors is not the only Chinese company entering the indian
automarket. BYD Auto Co. continue to invest in India,
while Changan and Beiqi Foton are designated to invest in local manufacturing.
Other giants like Geely and Chery are eyeing the Indian market as well. Changan
and Great Wall motors have been studying the Indian market for the past 2 to 3
years and are ready for local manufacturing. This would lead to influx into the
economy. Chinese companies have the ability to challenge the power of market
leaders through cost effective production and technological edge in terms of
electric vehicles that settles into the government's vision of electrification
due to rising concern of climate change.
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