Automakers in India and China can collaborate for mutual benefit

There is a huge gap between the automotive markets in China and India. China has a domestic car market of 20 million units whereas India’s stands at 2.6 million. But even then there could be avenues for collaboration between automotive players from these countries, feels industry veteran Dr V Sumantran, who also runs a strategic advisory firm Celeris Technologies.

Speaking at a press conference on the sidelines of the 6^th Global Automotive Forum in Chongqing, China, Dr Sumantran said that there are specific areas where both countries have strengths and those can be brought together for enhancing competitiveness of the automotive industry in both India and China.

China strengths lie in large scale manufacturing capabilities, infrastructure and skilled manpower. India on the other hand, can bring its strengths of frugal innovation and technology talent to the table. “China’s scale of hardware and India’s software skill can be mutually beneficial,” says Dr Sumantran. He says that though India is far behind in terms of the market size, the country is beginning to seeing growth that China did 10 years ago.

China could also be a good market for Indian component makers, some of whom have reached global scale in terms of quality. “Last year 20 Indian component makers visited the top 5 OEMs in China,” says Amit Mukherjee, deputy executive editor, ACMA. The OEMs are yet to place any orders even though there were some requests for quotations (RFQs).

A veteran Chinese industry analyst points out that the key reasons for the lack of cooperation between automotive players from the neighbouring countries could be “lack of understanding” and “prejudice” due to reasons of the past. But with the recent diplomatic step of prime minister Narendra Modi’s visit may help, at least to some extent, resolve those issues.

According to the analyst, India’s weakness in infrastructure is one reason why some in China feel India is around 10 years behind China. But he also points out that visits to some Indian manufacturing facilities, which meet global standards, will help Chinese players to have a better understanding of the competencies available in India. Another reason why India doesn’t attract Chinese players to invest in India is because they may be more interested in exporting from China, where they have underutilised manufacturing capacities, rather than setting up new facilities in India. However, there are some like Foton and Great Wall Motors which are looking at investing in India.

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