China's auto-parts makers entering India market

(chinatrucks.com, Jan.13, 2010)China's auto-parts producers are quietly foraying into India. More than 100 companies, from the truck engine subsidiary of FAW Group to gear-box maker Weichai Power, are at the 10th Auto Expo in Delhi showcasing their products to the local commercial vehicle makers, Business Standard reported today.

The Chinese companies, perhaps the largest number ever, at the expo are seeking possibilities like joint ventures with Indian partners, manufacturing base establishment, after-sales service operations, and direct export from China by appointing Indian distributors.

"India is growing and demand for trucks is more. Indian consumers need good-quality products at the right price, which our products can meet. We are 40-50% cheaper than competitors," said Wang Yuhe, manager of international service department at Weichai Power.

India's commercial vehicle market is expected to grow 20% annually, which will be driven by Tata Motors, Eicher-Volvo, Ashok Leyland and Mahindra & Mahindra (M&M), among others, which are launching large trucks at the expo.

Chinese auto-parts makers have contributed over 10% to the $4.5 billion components imports in India. While auto-parts imports by Indian companies have grown by 30%, Chinese components to India have grown much faster at 100%.

China's auto-parts makers are also cashing in on their low-price models while shrugging off the "low quality" tag. "We import Chinese components only if the landed cost is 10% lower," said an M&M executive.

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