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Many Chinese automakers are sealing agreements with their Indian counterparts in a bid to sell their competitively-priced brands in the local market.
Chinese carmakers are looking to get a foothold here after setting up operations in Latin America, Eastern Europe, Africa and Russia.
"The Indian auto market is very price and value sensitive. China too is a developing economy offering price-competitive products, and there is a lot of opportunity," said Ravi Santhanam, managing director of Hindustan Motors.
Over the years, Chinese companies have built huge car making volumes that are expected to touch 12 million vehicles this year, more than those in the US and 10 times India’s capacity. “While China always plays on volumes, they are now focusing on quality as well. There is a lot of push from their government for them to develop indigenous vehicles and stand firmly on quality parameters,” says Abdul Majeed, auto-practice leader at PriceWaterhouseCoopers.
As volumes start building up, economies of scale kick in. Manufacturers start investing in better dies, tooling, fixtures, gauges and other production equipment, giving components consistency, quality and accuracy, Mr Majeed added.