Enter The Dragon: China's SAIC to cause disruption in Indian automobile industry

After conquering the country's smartphone and electronics devices market, China Inc. has set its sight on India's lucrative automobile sector, where one of its largest manufacturers SAIC will compete for space.

Even though, Chinese firms have been present in India's auto sector, their presence till now was only concentrated in areas of public transport and commercial vehicles. 

However, SAIC Motor Corporation, which had a revenue of USD 129 billion in 2018, intends to change all that.

Accordingly, the automobile manufacturer which is one of China's largest carmakers and ranked 41st in the Fortune 500 list of companies will enter the Indian market by June through its fully-owned British subsidiary MG (Morris Garages) Motors India.

It will offer, India's first internet-enabled Sports Utility Vehicle (SUV) Hector priced at Rs 15-20 lakh. Overall, the company aims to launch four vehicles during the next 18 months.

"Any player that comes with innovative and differentiated products against the competition can succeed in India," P. Balendran, Executive Director, MG Motor India, told IANS.

"We are determined for a strong footing in India which is estimated to be the third biggest market by 2025 after the US and China... We see the SUV market as a strong bet in the short-term, with many upgrades in the market from compact cars."

SAIC's entry, industry insiders predict, will induce disruption as with deep pockets, the Chinese behemoth through MG will first launch the feature-rich SUV Hector, followed by three other offerings including an electric car eZS.

"MG's intention is to emerge as a successful player in India and grow with our partners," Balendran said.

"Over the past two years, we have built a strong foundation for our future in India... A differentiated product offering combined with strong product and service promise gives us confidence of making inroads in this market."

Furthermore, the brand which is already present in 41 countries including the UK, Australia, Thailand and the Middle East has committed an investment of Rs 2,200 crore in the first phase of operations in India.

"Our plan is to invest Rs 5,000 crore in India over a five-year period depending upon the market conditions and product programmes," Balendran said.

Last year, the company acquired General Motors' Halol plant, where it manufactures Hector.

When asked about the launch timing coinciding with a sales slowdown, Balendran said: "We expect the market to improve after elections and during the festival season in the last quarter of this year."

"As seen various times earlier, the automotive industry goes through cyclical ups and downs from time to time. We believe that fundamentally there is space for everybody to operate in a growing market."

Expected to be launched in June, SUV Hector, will bring in features including the iSMART Internet car functionality. It will also be the first car with a 48-volt lithium-ion battery, which helps store energy and provide extra torque assistance.IANS