The ever-increasing number of Chinese auto companies have turned their sights overseas to invest in the huge potential Indian auto market. Yesterday afternoon, SAIC and GM announced that they will establish a GM Shanghai Automotive Hong Kong Investment Company with a 50:50 ratio, and the new company will acquire the former GM India Company, and use the Indian market as a starting point to jointly develop emerging Asian markets. . According to reports, in the first quarter of next year, the new Indian company after the joint venture restructuring will begin operations, and SAIC-GM-Wuling ’s micro-vehicle products are most likely to be put into operation first.
SAIC and GM, a joint venture of Hong Kong investment company registered capital of US $ 100 million from SAIC and General Motors invested $ 50 million each. The new company will acquire 100% of the original GM India company. SAIC and GM will each hold a 50% stake in the new India company. The two companies plan to use GM’s brand, sales network, two OEMs and an engine plant in India to produce and sell locally produced and sold small and mini vehicle products developed by Shanghai GM, Pan Asia Automotive Technology Center and SAIC-GM-Wuling in India. .
After the setback of the acquisition of Ssangyong, the pace of overseas expansion of SAIC is more cautious. Li Chunbo, an automotive analyst, believes that in view of the sensitive relationship between China and India, Chinese auto makers will face great resistance when they attack the Indian market independently. With joint use of GM and the use of universal brands and networks, SAIC's overseas expansion will be much easier. Previously, GM's business in India was also unsuccessful because there was no car that was particularly suitable for the Indian market. He believes that cheaper models like the Wuling Vehicle have long been tested by the Chinese rural market and will be very popular in India.
The SAIC and GM’s new joint venture decision shows that the cooperation between multinational giants and Chinese companies has shifted from the Nuggets China market to the joint development of the global market. Li Zhenghui, director of Shanghai GM's public affairs and communications, said that the establishment of the new investment company is a good opportunity for Shanghai GM to go global. It does not rule out that Shanghai GM’s model products will be exported to other markets in Asia and even to a wider global market.
Previously, Indian officials had disclosed that talks with GM and SAIC on the introduction of the Wuling mini vehicle into the Indian market have continued for several months. Since SAIC-GM-Wuling’s joint-stock restructuring in 2002, its sales volume has quadrupled. As of November this year, the total sales volume was close to 3.55 million units, ranking the first in the minivan market for three consecutive years. The company's products include Wuling minibuses, Wuling minivans and the GM Chevrolet Spark minivan. It is also understood that the new Sail, which Shanghai GM plans to list early next year, is also likely to enter the Indian market.
At present, India has less than 10 cars per 1,000 people, but its consumption potential is second only to China. According to the Indian Automobile Industry Association, the Indian automobile market will grow at a double-digit rate each year. In the next few years, the demand for cars in India will increase by an average of 1 million vehicles a year. In 2015, the Indian passenger car market is expected to reach 4 million vehicles. In addition, compared with other emerging markets, India's auto industry has a higher profit margin, which has become an important reason to attract competition from various countries.