While the world is looking to invest in China as an emerging market, many multinational car companies have begun to pay special attention to another big country with more than one billion people: India.
Last week, Toyota Motor Corp announced another new global strategic plan. "One of our important tasks is to use Toyota's expertise and practical experience in cutting costs to turn India into our lowest global production cost." Car manufacturing center.†Akira Okabe, Toyota’s director of operations in Asia, Oceania, and the Middle East, said a few days ago. Toyota said it is confident that India will become a low-cost automobile production center and will use local Indian factories to produce cars for export to the rest of the world. Toyota regards India's various convenience factors as the basic conditions for establishing a low-cost automobile manufacturing center.
At the same time, Gerrit Kuyntjes, Asia Pacific General Manager of JD Power, an industrial consultancy, recently told reporters that India, with its low cost and skilled technology, is fully capable of becoming an important global automobile exporter. “Their production skills, practical ability, craftsmanship, and ability to take responsibility are all very competitive and well worth using. In terms of quality, apart from South Korea, the quality of cars produced in India is the best in Southeast Asia. And, compared with China, there are relatively few problems. Indian cars can compete with European cars."
In fact, global automakers like GM, Ford, and Toyota have already competed in the Indian market, and they have begun to use their local factories and various facilities in India to produce cars for export. For example, Hyundai Motor Co. announced in 2002 that it has started to use India as an export base for small cars. Nowadays, the number of modern cars exported from India has grown from 7,038 to 32,775, and the number has continued to expand.
India has performed well over the past few years. Although India had a relatively slow pace of manufacturing, a relatively small degree of market liberalization, and did not take advantage of cheap labor, India began its economic development in the 1990s. The reforms, some economists said, India may be entering a period similar to China's rapid economic expansion during the 1990s, which will make India a major player in the emerging market stage in the next few years. Among them, the profound influence that the Indian automobile industry has brought to it cannot be ignored. As economist Fan Gang said, “An important indicator for my judgment on the future economic development trend in India is to see if there is a greater development in the manufacturing industry.â€
In fact, India and China have a big difference. Many Indian companies rely on exports to realize most of their income. In China, few companies have enough influence in the international market. At present, the annual production of cars in India is 600,000, of which 9% are exported. Bharat Forge, India’s auto parts maker, relies on exports to achieve 60% of its sales revenue, half of which comes from the United States. Since 2003, Tata Group, India’s largest automaker, has started selling 100,000 cars “Indika†to Rover in the UK for Rover’s sales in the European market over the next five years.
Undoubtedly, the Indian market is also a huge cake with great potential. In addition, it will surely play an important role in global automobile exports and become one of the most attractive investment markets in the world.