11/27/2019 | 1 MINUTE READ

Chinese Carmakers Eye Indian Market

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Chinese vehicle manufacturers, who are facing slumping sales in their home market, are looking at India for potential growth.

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Chinese vehicle manufacturers, who are facing slumping sales in their home market, are looking at India for potential growth.

Several Chinese carmakers are expected to unveil their expansion plans in detail during India’s Auto Expo 2020 in February.

A few companies are already taking action. Earlier this year, SAIC Motor Corp.’s MG Motors brand launched the five-seat version of its Hector SUV in India. The company plans to add a three-row, seven-seat edition later.

The Hector is being produced locally at a former General Motors Co. factory in Halol, which SAIC acquired for 22 billion rupees ($307 million). The facility has the capacity to make 80,000 units per year.

MG plans to test India’s electric-car market in December when it introduces the eZS sporty crossover. That model will be imported from China. The marque hopes to build annual sales to 200,000 units, mostly piston-powered vehicles, by 2025.

Meanwhile, Great Wall Motor Co. announced two weeks ago that it expects to invest some $1 billion in India and launch its first domestically assembled model there—perhaps its popular Haval H2 small SUV—as early as 2021.

China’s Changan Automobile Group says it plans to debut its first Indian-produced vehicles in India by 2022. The company intends to invest more than 40 billion rupees ($558 million) to erect a plant with an estimated capacity to make 100,000 vehicles per year.

Chinese makers of commercial vehicles have been building a base in India for years. BYD Co. set up a local business unit, BYD India, 12 years ago. Operating through several joint ventures, it is supplying more than a dozen Indian cities with locally assembled electric commercial buses.

BYD India currently controls more than half the fledgling Indian electric bus market. Now the company is testing demand for all-electric commercial minivans.

BYD is not alone. Beijing-based Beiqi Foton Motor Co. is investing 5 billion yen ($46 million) in a joint venture with local EV company PMI Electric Mobility Solutions. The venture, in which the Indian partner holds a 70% stake, aims to begin making electric buses in India 2-3 years from now.