06 Jan 2020
Posted in Automotive
Success of MG Hector attracting more Chinese brands to India, says GlobalData
Following the news that Chinese carmaker SAIC-owned Morris Garages (MG) Motor’s Hector has emerged as the market leader in the mid-size sport utility vehicle (SUV) segment for the second half of 2019 in India;
Animesh Kumar, Director of Automotive Consulting at GlobalData, a leading research and consulting company, offers his view:
“After the success of SAIC (MG Motor) and the announcements of India entry plans by Great Wall Motors (Haval) and Changan Automobile, another Chinese automaker Haima Automobile is set to enter India. Haima will bring capabilities regarding manufacturing of internal combustion engine (ICE) and electric vehicles, including sedans, multi-purpose vehicles (MPVs) and SUVs. The yet to be declared model will be showcased in India Auto Expo 2020, which is scheduled in February 2020.
“Though the Indian automotive market is witnessing a slowdown, the uptake of recently launched MG Hector has encouraged and attracted more Chinese brands to launch products in India. MG Hector uses the same platform as its Chinese sibling Baojun 530 as both brands are owned by China’s state-owned automotive company, SAIC. MG is launching its second model – ZS EV – in January 2020. Great Wall Motors plans to introduce Haval’s H4, H6 and H9 SUVs. It also plans to launch world’s cheapest electric car – Ora R1 – in India in 2020. Changan Automobile, which specialises in SUVs and electric vehicles (EVs), has announced investment of INR40bn in India in a phased-manner.
“With stagnating sales in domestic passenger vehicles market, Chinese OEMs will benefit from entry into the India market. At the same time, Indian automotive industry is undergoing major transformation. BS-VI emission norms will be implemented from 1 April 2020 and India is also pushing for EV and other cleaner and relevant technologies. In such a scenario, the market can benefit from the experience of Chinese OEMs, who have robust technical expertise in EV as well as EV battery manufacturing.
“In China, China VI emission standards will be implemented in July 2020. China VI will largely be equivalent to Euro VI and BS VI. Chinese OEMs are already developing models that meet the standards and those models may find their way to Indian roads.
“The entry of Chinese makes will make the passenger vehicles market in India more competitive, particularly in the SUV segment. Customers will have a larger pool to choose vehicle from. The challenge for Chinese brands will be to overcome the usual poor perception regarding quality, durability and service. However, the success of MG Hector indicates that Indian buyers are not too concerned. It will be interesting to see how the current and upcoming models fare in the long run. The success of these makes will also attract other Chinese automakers like Chery and Geely towards the Indian market. The limitation for Geely is that it does not have a right-hand drive vehicle but it can bring Malaysia’s Proton to the Indian market.”