“In India, China’s commercial vehicles can hardly be seen.†This is the first impression made by Chen Shiping, deputy general manager of Shanghai CTS, on the commercial vehicle market in India. He told the "Commercial Automotive News" reporter that the heavy truck market in India is basically monopolized by Tata Motors, and most of the passenger bus market in India is a Tata bus. Chen Shiping believes that India’s infrastructure construction is proceeding in full swing, and it is difficult for Chinese commercial vehicles to enter this market that has been monopolized by Tata.
Not only India, Russia's export environment is also deteriorating. Since China, Russia, India, and Brazil are also known as the "BRIC countries," they hope to replace the Group of Seven nations in the decades to become the world's largest economy. As a result, the automotive markets in these four countries have high hopes, especially Russia, which has become one of the major exporters of Chinese automobiles. However, due to the trade pressures and the dual pressures of the economic crisis, it is increasingly difficult for Chinese commercial vehicles to enter these markets.
Reduced domestic demand led to a sharp drop in imports
The phenomenon of declining car sales and continued declining consumer demand has not only occurred in the mature countries and regions of the automotive industry in Europe, the United States, and Japan, but even some emerging countries. Since October 2008, car sales in various countries have continued to decline. By November, this phenomenon has become more apparent. As the demand for cars in various countries decreases, some local companies have already reduced their pressures by reducing production or laying off employees; on the other hand, they have also reduced the demand for imported cars.
According to the Brazilian Automobile Sales Association, due to the credit crunch caused by the international financial crisis, Brazil sold a total of 310,000 motor vehicles in November, a decrease of 22.8% from October and a decrease of 23.4% from November 2007. In response to changes in the market, Brazilian automakers collectively announced that they were on holiday. Judging from the current statistical data, about 75,000 employees of automobile manufacturing enterprises will be collectively vacant by the end of the year, accounting for nearly 60% of the total employment in the automotive industry, and Brazilian companies will therefore produce 200,000 fewer cars. At the same time, Brazil’s auto parts companies will also be implicated, and the industry’s employment will reach 231,200.
In October, sales of medium-sized and heavy-duty commercial vehicles in India plummeted, and Tata Motors, the country’s main commercial vehicle manufacturer, was down 50% from the same period in 2007. The sales of Tata’s best-selling light commercial vehicles also fell by 10% in October. The head of automotive business at PricewaterhouseCoopers in India stated that India’s heavy-duty auto industry is in its most difficult period in more than a decade. On November 10, Tata Motors stated that it had closed a factory and in December it would be possible to suspend the production of the other two factories. Its competitor Ashok Leyland also reduced production time to 3 days a week starting in December. Under the dual pressure of declining domestic auto demand in India and the suspension of production by local companies, auto imports will also be affected.
Russia also faces similar problems. It is understood that due to the economic crisis that led to a decline in the demand for commercial vehicles in Russia, Russia’s commercial vehicle manufacturer, the Kamaz Automobile Plant, stopped production for two weeks. Workers receive 2/3 of their original salary during vacation. Although the spokesperson of Kamaz Automobile Factory did not respond to the plan to revise this year's production plan, according to media reports, the factory now has a backlog of about 2,000 cars. Before the financial crisis, the plant had only 700 cars in stock.
Russia and India have many restrictions on China
Recently, the latest survey results released by Russia's "Automotive Statistics" consulting company showed that sales of Chinese cars in the country's market began to decline. According to analysis, the main reason for the decline is related to the new policy recently introduced by Russia. India also began to say no to Chinese commercial vehicles in different ways.
In 2007, China's commercial vehicle exports to Russia can be described as a moment. Statistics show that last year, the sales volume of Chinese cars in Russia reached 57,000, accounting for 3.5% of the country’s imported car market share. In 2008, the situation deteriorated rapidly. Sales of Chinese cars in Russia began to decline. In the first half of the year, only 25,000 vehicles were sold, which accounted for 2.4% of the market share. Recently, Great Wall Motors announced the dissolution of the Great Wall of Russia's Great Wall Alabaga Auto Open Stock Co., which was the last Chinese car company to establish a joint venture plant in Russia. From then on, Russia completely shut down the doors of Chinese car manufacturers to set up joint venture factories in the region.
It is understood that in 2008, Russia implemented a more stringent testing certificate system, which not only restricted the imported models, but also increased the export costs of Chinese cars. It is reported that the average cost of obtaining a certificate is up to 150,000 US dollars. In addition, Russia has recently increased the import tariffs on finished automobile bodies, and the minimum import tax for each body must not be less than 5,000 euros, which makes it unprofitable for the semi-finished assembly (SKD) of Chinese cars in Russia. In addition, since January 4th this year, Russia has raised the threshold for the certification of non-Geneva vehicles that are exported to Russia, with 55 certification projects. These policies have made it harder for China’s commercial vehicle exports to Russia.
In India, commercial vehicles in China have also encountered similar situations. Chen Shiping told reporters that the Indian government strongly protects the domestic auto industry, so Tata almost monopolized the commercial vehicle market in India. Judging from the current situation, the demand in the Indian market exists. “For example, the quality of road buses in India is not high,†said Chen Shiping. The problem is that even if Chinese car companies see opportunities, it is difficult for Chinese commercial vehicles to enter. "I feel that India does not like Chinese commercial vehicles." Chen Shiping mentioned. He believes that if China's commercial vehicles want to enter the Indian market, it will require Chinese commercial vehicle manufacturers and the government to communicate more with the Indian government, so that their understanding of China's commercial vehicles has improved.
Although Indian domestic commercial vehicle manufacturer Tata Motors is the only one, some commercial vehicle manufacturers in Europe and the United States can still enter the Indian market. For example, MAN, the German heavy truck manufacturer, produces nearly 10,000 trucks at Manfred, a joint venture in India; Daimler and the Indian company Hero Group set up a joint venture to produce trucks; Volvo and Indian company Eicher Motors Ltd Cooperate to produce trucks. We still do not see the Sino-Indian commercial vehicle joint venture.
India's setbacks on China's commercial vehicles are not groundless. In June this year, the Anti-Dumping Administration of the Ministry of Commerce and Industry of India initiated an anti-dumping investigation against the automobile power steering system originating in China, restricting the export of Chinese commercial vehicle products to India on the ground of low price dumping. The products involved are automobile power steering systems, which are mainly used for medium-sized vehicles with a load capacity of 12 to 16 tons and heavy-duty vehicles with a load capacity of 16 to 40 tons. In addition, the Indian government’s import duties on vehicles and parts are as high as 121% and 83%.
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