--- Nasci Caldeira <[EMAIL PROTECTED]> wrote: > Hi all, > > China's auto industry is so young and yet they are > manufacturing cars quite > good and above all very cheaply (half the cost) > compared to European/ > American/Indian prices. Last week , 400 cars, medium > duty and two wheel > drive, manual were exported to Germany, for > distribution all over Europe. > (Left Hand Drive) All these, I believe are already > sold in advance of > shipment; and as a result another 400 cars are on > their way. All this info > is from 'The Business Review Weekly' published in > Australia, and of which I > am a subscriber. As and when they start making > 'Right Hand Drive Cars', we > are going to see China's cars sold in Australia, > Japan, UK and all of Asia, > and may be even in India! I get all this info from > the BRW magazine. > See ya! > > Cheers > Nasci Caldeira > Melbourne
The Chinese car market is being primarily driven by the same multi-nationals that sell cars in other parts of the world. The two biggest manufacturers in China at the moment are VW and GM. VW's China sales are actually on the verge of overtaking its largest market, Germany. There are a couple of homegrown manufacturers in China too. One of the biggest is called Cherry Motors. The problem with China is that there is very little intellectual property protection. GM for example has filed a lawsuit against Cherry for copying one of its models. Likewise, there is another small outfit that has a name and logo that looks very similar to that of BMW's! Hint: this chinese company a blue and white logo and has a three letter name and also begins with a B. India actually exports far larger volumes of vehicles than China. It exported over 100K cars last year and should export over 140K this year. The biggest exporters are Hyundai, followed by Maruti, Tata, Ford and Mahindra. Amongst these companies, only Tata and Mahindra can be considered to be genuinely home grown manufacturers. While their products may be considered crude relative to what the world has to offer, this is more by design rather than ability. Tata and Mahindra have invested in engineering capability that is world class, but their products have been designed to meet the needs (i.e. budget) of the Indian consumer. The current obsession with Tata is to produce a 1 lakh car. Ratan Tata, the head of Tata Motors envisions this car being India's equivalent to America's Model T. It remains to be seen if Tata can deliver such a product. The success of the low cost manufacturers in India will not necessarily translate to export success abroad. Indian products have had some success in Africa and those parts of the world that are price sensitive. However, these markets are relatively small. Conversely, they have failed to make much of an impact in richer markets such as in Europe and do not exist in America. Tata has been selling cars in the UK for about a decade with limited success. These markets demand higher spec. and higher performance products (at a higher price point of course)which do not completely mesh with the market needs of the Indian market. In contrast, the foreign based manufacturers (Hyundai and Suzuki/Maruti) which already have established themselves in foreign markets and have broad product lines are using India as a regional hub for exports to parts of Asia, Europe and the Middle east. In the short run therefore, companies like Hyundai and Suzuki will continue to be India's primary exporters. In the longer term, it is possible that Tata could become a major world player. Last but not least, India has become a major hub for a variety of automobile component manufacturers. MICO, Kalyani, Sundaram are some major players in the world stage, with the last two being purely home grown companies that supply components to the world's major manufacturers. Unlike the recent explosive (and highly risky imo) growth in the automotive sector that has been witnessed in China, I think India's long term growth in this field should be relatively more sustainable, though it is possible that there may be a modest correction in the short term. Unlike the much publicized IT sector, India's lesser known automotive sector is also becoming a significant contributor to India's growth. With Intel planning to set up shop in India, it is possible that India's nascent semi-conductor industry may also experience sharp growth. However, this may be significantly hampered by intense competition from China as well as India's poor infrastructure. In contrast, there is little doubt that India's pharma industry is set for major growth. In the past India's home grown companies such as Ranbaxy, Dr. Reddy's Labs etc have been the primary drivers. With the recent changes in India's patent laws, it is logical to assume that many multinationals will increasingly begin to use India as a major base for development and production. Marlon
