Great Wall Motor officially enters Indian market, launching full range of SUVs & EV Models

Dealers mention that Indian car manufacturers as well as those with Japanese and Korean connections will benefit at the expense of the Chinese players as consumer confidence has started waning for them

All is not well. Sonam Wangchuk, the inspiration behind the iconic character of Phunsukh Wangdu in the movie 3 Idiots, has urged fellow Indians to boycott Chinese products, on the backdrop of the COVID virus, expected to have originated within Wuhan city of China, causing widespread mayhem worldwide. The clarion call to avoid Chinese products may just about spill over into the Indian automotive industry.

Chinese auto majors had displayed a number of products at the Indian auto show last February and announced major investment plans amounting to Rs 34,000 crore.

Industry experts have told ET that car consumers will rethink on buying vehicles which have a Chinese connection including investments from Chinese companies or a technology tie-up. Such a scenario will give players like MG Motors, Great Wall Motors, Foton, Changan and BYD Motors much to think about in times to come.

MG Motors is a year old in Indian market while Changan will start operations in 2022, Great Wall in 2021 and BYD has just launched EV buses. A person in the know working closely with these Chinese auto companies says there is a fair amount of scepticism and negative sentiment for Chinese auto currently.

The negative perception is building and if this escalation continues, it will lead to negative consumer sentiments for products coming out of China. He says Japanese and Korean car companies have been around for more than two decades in India, without any negative perception of their countries. “There is going to be delay in their entry plans as government access will be difficult and talent, dealers and suppliers will also be an issue”, he added.

The call to boycott Chinese products is coming across sectors and a number of Indian celebrities have got on to this bandwagon. Chinese auto majors had displayed a number of products at the Indian auto show last February and announced major investment plans amounting to Rs 34000 crore.All this is set to change, getting the companies to scurry back to their drawing boards.

Dealers mention that Indian car manufacturers as well as those with Japanese and Korean connections will benefit at the expense of the Chinese players as consumer confidence has started waning for them. A person associated with Changan on condition of anonymity said, “Consumer sentiments might become low for Chinese products post COVID. As long as you provide quality products manufactured in India, consumers would buy it” adding that people would be willing to take up work with a new project even if at a risk.

Rajeev Chaba, Managing Director at MG Motors, owned by Chinese player SAIC mentioned that being local meant remaining relevant through investments, jobs and supporting suppliers as well as adding value. “The chemistry between brand and community has to be storing”, he added. Experts maintain that in spite of such assurances, Chinese auto companies may find it difficult to attract high level talent given the negativity.

BYD, Changan and Great Wall did not respond to ET queries.

Nikunj Sanghi, one of the largest automotive dealers mentions that another challenge is OEMs dependence on Chinese ancillary imports. “Today Indian OEMs especially EVs and two-wheelers depend on at least 26% of components from China which may be impacted. Some parts cannot be sourced from alternative sources and it is difficult to switch suppliers for mass-production items”.

As China continues to produce value for money products, it will find takers. However, in case things do not improve, it may yet be a classic case of going back from Chandni Chowk to China for Chinese auto players.