Chinese auto firms have indicated that doing business with India is not lucrative due to demand of low-cost variants. Auto firms have expressed concerns over prices of auto parts sold in the Indian market. According to them, auto parts in India are 30-40 per cent cheaper as against in Europe, United States of America, Middle East, South America and Russia even after rising manufacturing costs. Xing Wen Chao, General Manager, Xinxiang Huazheng Radiator Co. Ltd. reportedly said, “Trading with India is low owing to lower prices. We can't compete with them (Indian firms).” He also said that export to Nigeria was good due to good pricing and payments. Notably, Chao's $7-million annual turnover company in Xinxiang city in Henan province, currently, manufactures auto radiators and inter-coolers. Besides this, the company also makes components for the People's Liberation Army.
According to statistics, in 2012, China continued to be world's largest auto market and producer for the fourth consecutive year. To be more precise, as per CAAM (China Association of Automobile Manufacturing), China saw sales and production of over 19 million units each. Xueke Xu of Tirri Automobile Parts Co. Ltd. in seaport town Ningbo in Zhzjiang province, said, “In India, prices are too cheap. I don't know the reason for this. We prefer to look at markets in Russia and South America, where prices are higher.”
Alisson Grossl of Brazilian Automotive Supplier Gauss Industriae mentioned that the company was yet to make a mark in India. Grossl also added, “We didn't find much potential in the Indian market. They (Indians) prefer to go for Chinese parts as they are cheaper.” Just to note, Grossl had came down to participate in the four-day Automechanika Shanghai trade exhibition, which was organised by Messe Frankfurt Co. Ltd. and the China National Automotive Industry International Corporation (CNAICO). The auto trade exhibition was concluded on 14th December. However, Christine Berk, Project Manager, Messe Frankfurt Exhibition, who also participated in the exhibition said, “Our companies did good business in ACMA Automechanika in New Delhi this year. The market for new vehicles and after-sale in India is enormous. We will participate in the Delhi exhibition in future too.”
Helme Koop, Sales Manager at German automotive supplier, Vierol AG, reportedly stated that the company would fancy its chances and test waters in India over a span of three to four years. Ningbo-based Xiamen Aohang International Freight Forwarding Company's Manager Gina Jin indicated that their company, on an average, was shipping over 100 containers annually. Containers mainly comprise auto components, Jin disclosed. Trade representatives have indicated that the market in India is good for key components like shock absorber, ignite, brake, gear shaft, spark plugs, fuel pumps, filters, panel control switches, radiators, oil and grease seal and clutch segments.
Chinese cities like Tangxia (Zhejiang province), Changchun (Jilin), Wuhu (Anhui) and Shanghai are prominent automobile industry hubs in the country. PIM Ltd., a US-based firm focusing on industrial and commercial activities reportedly stated that China has become one of the world's largest auto components makers and exporters due to a robust support from the functional government. Notably, since 2001, the Chinese auto components industry has got subsidies worth $27.5 billion. Furthermore, the Chinese central government is looking forward to give an additional amount of $10.9 billion in the form of subsidies over the next decade for technological development and industrial restructuring. China has seen a tremendous growth of over 150 per cent since 2004. It has now become world's fourth-largest exporter of auto components. It follows likes of Germany, US, and Japan. As per PIM, the Chinese automobiles and auto component industry is flourishing mainly due to an expanding population, an increased domestic demand and rapid export based developments.
