Shanghai Automotive Industrial Corporation (SAIC) the largest carmaker in China has formed up their plans to launch in India in 2019. The carmaker which has an annual production of 6.93 million units in 2017, helped by joint-ventures with General Motors and Volkswagen is aggressively promoting their own brands. In the early-2000’s SAIC bought the British carmaker MG and Rover. The latter was renamed Roewe and has become one of the largest homegrown brands in China, however according to Michael Yang, Executive Director, International Business, SAIC, the MG brand will be used to power SAIC’s global ambitions. And India will play a key role in that global vision, with former General Motors India Managing Director Rajeev Chaba Harding MG Motors India and the company acquiring GM’s old Halol facility in Gujarat.
Chaba said that several modifications had been made to the Halol facility in order to prepare it for MG Motors including a new press shop as well as a new vendor park. Along with itself, SAIC is also bringing SAIC subsidiaries which will produce parts and handle logistics. “We understand that to be successful in India products will need to have a high-degree of localisation and when we launch we will have over 75 per cent localisation”, Chaba said. While it is likely that the company will enter the Indian market with their HS sports-utility vehicle, a C-segment SUV in the same size category as the Jeep Compass and Hyundai Tucson, Chaba refused to confirm this other than to say that whichever product came to India would feature both petrol and Diesel engines.
Yang added that SAIC has already decided that the second vehicle that MG will bring to India will be a purely electric vehicle. “At the MOVE summit last month we saw the vision that Prime Minister Modi has for electrification, and it is clear that India is walking down the electric path. SAIC is a global pioneer in electric vehicles and it is only right that we bring our products to India”, Yang told The Pioneer. While he gave no details as to which vehicles could be brought to India, the carmaker recently launched their new all-electric SUV, the MarvelX in China. The company has also electric sedans and hatchbacks in their product portfolio.
Chinese manufacturing has often been criticised for copying ideas and technologies from western companies, enabled through compulsory joint-ventures and outright copying of designs. SAIC took pains to prove that they are developing their own designs and technologies in-house. During a walkthrough of the company’s Anting facilities, the company showcased their in-house vehicle development abilities including new engines and an advanced Dual-Clutch transmission gearbox. SAIC has also developed their own crash laboratory where they conduct crash tests and all their new products are ‘Five Star’ certified in China New Car Assessment Program (CNCAP) which includes front-offset tests at 64 kilometers per hour.
To be sure, India will play a critical role in SAIC’s plans of becoming a global force, with globalisation being one of the four main pillars of the company’s strategy. Chaba however did warn that the company was not being overconfident. “We are not expanding manufacturing output from the 100,000 that Halol can currently manage. We are also not adding too many dealers, we have plans for just 45 dealer principals and a 100 touchpoints at launch and we will grow with our dealers going forward. Many foreign brands have come to India and failed. We do not want to repeat the same mistakes, we want to focus on customer satisfaction and service.”
SAIC is moving abroad as the Chinese car market growth tempers off, after growing from just over 10 million units to 25 million in just over a decade. Chinese carmaker’s which were derided for poor quality in their homegrown products just over a decade ago have dramatically picked up their act which is clearly evident to the casual observer. If the success of Chinese manufacturers in the mobile phone industry in India is any indication thanks to a blend of features and cost-competitiveness then carmaker’s in India should be worried.
