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As some economic circles talk about whether China's manufacturing base will shift to India, the Indian Tata Motors Group has clearly defined "strongly growing China" as one of its global production bases and has opened up access to the global automotive market. a window.
On June 26, a staff member of the Shanghai Representative Office of Tata Auto Parts System Co., Ltd. in India told reporters that “the Nanjing Tata Parts Factory has been completed and will soon provide support to the Chang’an Ford Mazda’s Nanjing plant. The automotive interior is dominated but there has not been a formal launch of a cooperative business."
It is understood that the factory also won an order for a GM European plant.
The staff member also told reporters that “Shanghai GM is also one of the partners of the Nanjing plant, but the main supply method at present is to import parts from India.â€
Tata Nanjing is a wholly-owned subsidiary of the Tata Group in India. It occupies an area of ​​more than 26,000 square meters and plans to invest approximately US$15 million. At present, it has invested US$7 million. It plans to double its production capacity in the next two years.
“For us, China is not only a production base, but also a window to the global market. From now on, I believe that this factory will be marketed to the United States, Europe, and other emerging countries including China. “This is what Rajiv Bakshi, general manager of Tata Motors and the head of the plastics division, said.
Tata’s globalization strategy
Since the beginning of the planning, Indian cars have been struggling with a global perspective, and the Tata Group is undoubtedly an important role.
In January of this year, Tata Motors launched the “Cheapest Car in the World†for only $2,500 at the International Auto Show in India, accelerating the competition in the global market for small, inexpensive cars. In April of this year, Tata bought Jaguar and Land Rover in a big way and formed a huge lineup of products from commercial vehicles, mini-vehicles to luxury cars.
“India has the potential to emerge as one of Tata’s outstanding automakers, and it is related to the attitude of the Indian government in guiding domestic companies to cooperate with foreign automakers.†Anbang Consulting analysts believe.
In 1983, Japan Suzuki took the lead in entering the Indian market and set up a joint venture manufacturer, mainly producing miniature cars. Afterwards, Hyundai Group also entered the Indian market, but the premise is that the cars produced by these joint venture car manufacturers cannot use the trademarks of foreign companies, which reinforces the image of local brands.
Low-cost tips
Rajiv Bakshi stated with certainty that operating pressure on cost increases, “This is a phenomenon faced by any industry and will not affect the level of production in this area. It depends on a strong R&D center in India, the Nanjing Plant and other China. Compared to the factory."
Tata Motors' low-cost secrets have always been of concern to the world's automotive industry. The realization of ultra-low-cost car sales is not only due to the miniaturization of design and lower configuration, but also thanks to the full support of the coordinated development of India's automotive, parts and motorcycle industries.
According to analysis by Fourin Consulting, Tata Motors focused on overall design and development on the one hand, and on the other hand commissioned internal and external component suppliers to carry out most of the design, development and production of parts and components. In response to the Tata Motors' goal of reducing costs by 20% to 50%, most parts suppliers will make full use of existing product technologies and adopt simplified product design and processing lines, reducing the cost by nearly one-third.
In addition, Tata Motors has reduced overall vehicle development and production costs while reducing component development and production costs by implementing alternative procurement strategies, supplier industrial park models, and modularized outsourcing of parts and components policies.
Another secret to reducing costs is Tata’s unique outsourcing strategy. Tata Motors established a component supplier industrial park at the Singur plant to attract important parts and components companies.
China-India Automobile Trade Friction Appears
China and India have begun to experience friction in the automobile trade. According to the website of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, the Anti-Dumping Administration of the Ministry of Commerce and Industry of India initiated an anti-dumping investigation on the power steering system originally produced in China on June 13.
Anbang Consulting analysts believe that the Indian automotive industry is not enough to compete with China, but the Indian automotive industry has great potential for development and potential competitive threats are increasing.
PricewaterhouseCoopers predicts in a report that demand for private cars in India will increase by an average of 1 million vehicles per year over the next three years. According to a conservative estimate of the Indian Automobile Manufacturers Association, by 2015, private car sales are expected to reach 3 million.
According to the website information of the Ministry of Commerce, in early 2008, the Indian Tata Group has announced that it has established China as a key country in its globalization strategy. In the current fiscal year, India’s Tata Group’s revenue in China is expected to double, from 300 million U.S. dollars in 2006-2007 to 600 million U.S. dollars; at the same time, imports from China will also increase to 500 million U.S. dollars.
Ampang Consulting analysts also pointed out that Indian cars quickly relied on cheap prices before they entered the same grade cars in Japan and South Korea and quickly seized their own markets in Southeast Asia and South Asia. China’s own brands have shown little interest in the surrounding markets, not only did not compete for the Southeast Asian market, but even did not have an advantage over neighboring markets such as Vietnam and Cambodia.