On the evening of March 11, Feng Xingya, a deputy to the National People's Congress and general manager of GAC Group, was asked in an interview whether he had plans to enter the Indian market. Feng Xingya said, "Last time I went to India, I had the impression that India is not a big oil producer, and there is pressure on the supply of oil and other fuels, so it is necessary to develop electric vehicles." ”
However, due to differences in India's tax policies and the size and performance parameters of vehicles, GAC will develop products for the Indian market and may also produce them locally in India in the future.
Going to sea is not an option, it is "having to go out"
First stand firm in the local market, and then seek the road of internationalization, which is almost the only way for independent brands to become bigger and stronger. In addition, now is a good time for automobile exports - China's automobile exports reached 3.111 million units in 2022, a year-on-year increase of 54.4%; Exports of new energy vehicles reached 679,000 units, up 120% y/y.
Cui Dongshu, secretary general of the Passenger Association, once described the export advantages of China's new energy vehicles: "China's new energy vehicle supply chain is stable and strong, with the continuous improvement of overseas recognition and the improvement of service network, coupled with the Ministry of Industry and Information Technology and other ministries and commissions coordinating bottlenecks such as export capacity, exports still have great potential." ”
China's automobile exports have not achieved today's good results, from export sales exceeding one million units for the first time in 2012 to exceeding 3 million units today, behind the years of deep cultivation of several independent car companies.
Ambitious traditional independent enterprises such as SAIC, Chery, Geely, Great Wall and so on have already made efforts to go overseas, making overseas markets an important growth point for their sales. Among the top 10 OEMs in 2022, nine are local OEMs, with a total export volume of nearly 90% of China's total auto exports.
The new forces in car manufacturing are not far behind. New energy brands such as NIO and Xpeng have taken overseas appearances as an important way to show their strength, and even directly used the European market as a bridgehead to go overseas when choosing the first stop.
After the Chinese auto market entered the stock state, the importance of overseas markets in driving sales has increased, but the GAC Group has "lost its balance" in this field. In 2022, the GAC Group sold 33,000 units overseas. Although it achieved a year-on-year increase of 59%, it still has a lot of room for growth compared to its total sales of 2.43 million units.
In order not to lag behind in the new round of competition and quickly achieve overseas increments, in 2022, GAC will focus on three key markets: Saudi Arabia, Mexico and Chile, and achieve a breakthrough in the 10,000-vehicle market in Mexico. Actively promote KD projects in Nigeria and Tunisia, and launch CKD projects in Malaysia to prepare for local production; Continue to deepen local operations and promote global layout in an orderly manner.
GAC's new energy brand Aion has set a new goal of going overseas: it plans to achieve sales of 500,000-600,000 units in 2023 and 1.5 million units in 2030, and 500,000 units are expected to be exported.
Why India?
In 2021, India's economy reached $3.18 trillion, and in 2022, India's GDP rose to $3.39 trillion. The rising economic level and the total population of 1.4 billion people have not only promoted the rapid development of India's manufacturing and high-tech industries, but also promoted the continuous expansion of the Indian automobile market.
In 2021, India became the world's fourth-largest car producer; In 2022, India overtook Germany and Japan to become the world's third-largest automotive market, with 3.8 million light vehicles sold, a market growth of 23%.
Notably, electric vehicles are phenomenal in India. According to research institute Canalys, electric vehicles (EVs) in India grew by 223% in 2022, with sales of 48,000 units. Canalys predicts that the Indian EV market will grow to more than 300,000 units by 2025, accounting for more than 6% of the light-duty vehicle market, with a CAGR of 59%.
For Chinese car brands, the Indian market is a land with a large volume, but mysterious and strange land waiting to be explored - because Indian consumers are more inclined to buy Japanese and Korean brands or local brands, the market share of Chinese brands is not high. Its current major automakers are Tata, Maruti, Bajaj, Ashok Leyland, Hyundai and others.
However, the rise of new energy vehicles has allowed Chinese car companies to see an opportunity to cut into the Indian market, and from January to November 2022, China's new energy vehicles exported to India totaled 55,515 units, a year-on-year increase of 32%. For GAC, which has a weak overseas layout, entering popular export markets such as Europe and Southeast Asia may not win, and choosing India, which has a rising market, may have a surprise.
In addition, GAC's product pricing is also in line with the mainstream price of new energy vehicles in India. At present, Tata occupies 86% of India's new energy vehicle market share with Nexon and Tigore, which is priced at about 20,000 US dollars (currently about 137,900 yuan); followed by MG's ZS electric vehicle with a market share of 9%, and Hyundai's Kona, with a market share of 1.6%, and overseas brands represented by them compete for a market of more than 25,000 US dollars (currently about 172,400 yuan).
It is not that luxury car companies such as BBA are not in India, in fact, Mercedes-Benz and BMW sales in 2022 hit a new high in India, but the market share is still less than 1%. In the Indian market, the most popular products are still high-quality and inexpensive.
In horizontal comparison, the price of GAC's new energy vehicles is about 150,000 yuan, and the price of its main model, AION Y, is 11.98-189,800 yuan, which is in line with the mainstream demand of the Indian market. If GAC can localize production in India, costs will be further reduced.
The continuous investment in key links such as design, manufacturing, and R&D has also given the GAC Group more confidence in going overseas. At present, GAC AION has started mixed reform, launched a new logo, made its million-yuan mass production supercar unveiled, completed a round of financing for the A, and developed its own power battery... The second intelligent manufacturing center has also been completed and put into operation, and the overall planned annual production capacity has exceeded 400,000 vehicles. GAC's other own brand, GAC Trumpchi, also released the "Julang Hybrid" in 2022, accelerating the transformation to "electrification + intelligence".