China, India could reshape global automobile industry

China, India could reshape global automobile industry

Electronic vehicle manufacturer CT&T introduces the Multi Amphibious concept vehicle at the North American International Auto Show in Detroit. AP

“They are a very credible threat and we discount anyone at our peril,” John Mendel, Vice-President in charge of sales at American Honda Motor, said on Tuesday. While the globally competitive nature of the automotive industry requires mass economies of scale, the relatively young Chinese and Indian manufacturers are ramping up quickly, Mendel noted. And the Chinese automakers buying brands like Hummer and Volvo are gaining access to a valuable distribution network, critical technology and “instant credibility,” he told AFP.

India’s Tata Motors will bring to US market the Nano minicar to show  what the world’s cheapest car looks like. Build Your Dreams Motor (BYD) brought its four-door electric e6 straight to the floor of the auto show where it vowed on Tuesday to become the first Chinese automaker to enter the United States at the end of this year. Meanwhile, both countries are becoming increasingly important markets in the global sales strategy of top automakers with China surpassing the US in total sales volume last year and Indian sales expected to double by 2016.

Toyota’s Chief of US automotive operations expressed skepticism that either BYD or Tata would make a significant mark here in the short term. “I think it’s a mid-term prospective... not 10 years,” said another observer, noting the success of Korean automakers Hyundai and Kia in the US market.

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