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.
Sales of the Hector for the company in India are expected to reach 24,000 in 2020, and the capacity of the SAIC India plant where the MG Hector is made will continue to expand as sales are projected by the company to reach 70,000 units in 2021.
SAIC's India production base opened in April this year when it acquired GM's Halol plant in Gujarat (western India). SAIC in India said it received 31,000 Hector orders in three months after the launch of MG Hector.
Animesh Kumar, Director of Automotive Consulting at GlobalData, says that other Chinese OEMs are planning to follow SAIC into India.
"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.
"Besides announcements of India entry plans by Great Wall Motors (Haval) and Changan Automobile, Haima Automobile is also 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.
Kumar notes that 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," he says. "And 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.
"It is clearly a busy period ahead for the Chinese OEMs looking to build a presence in India."
Kumar also says the Chinese OEMs are well-placed with electrification tech at an opportune time. "The 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."
He adds: "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."
However, a growing Chinese presence in India will make the passenger vehicles market in India more competitive, particularly in the SUV segment. "A challenge for Chinese brands will be to overcome the usual poor perception regarding quality, durability and service," maintains Kumar. "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 could bring Malaysia's Proton to the Indian market."
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