"We have an advantage over China."
India Ashok Leyland Low Cost Tactics and China's Fight for Auto Parts Market
Reporter Meng Jia Shanghai Report
Toyota Motor hopes to expand its market share in China. The focus of its cooperation will gradually shift to other companies in FAW Group. Only in this way can Toyota achieve the goal of capturing 10% of the Chinese market.
In the common interest of Toyota and FAW Group, Xiali must seek more room for growth in order to maintain its position.
In late August, the Ashok Leyland Motor Company in India, which is about to expand globally, has formulated a detailed plan, in which the automakers in the world are keen on the Chinese market. The car manufacturer came to the conclusion that “we cannot be like China. Or, as in other Asian countries, mass production is possible. Within a day, we can produce millions of products, but we have advantages over China in product design, machinery and equipment, etc."
At the same time, in terms of production costs, the Indian company also believes that it is more competitive than China. It is under such a strategy that their strategy for overseas markets has also undergone fundamental changes.
As India's second-largest commercial vehicle production company, Ashok Leyland hopes to continue to expand its production capacity by establishing production plants in the country, and then enter the international automotive market to supply parts and components for major auto companies worldwide. The premise that can do this is to understand the most urgent needs of the entire vehicle production company.
Recently, the Indian auto company announced that it will invest Rs. 1 500 crore to establish an engine parts supply plant. If nothing else happens, the new plant will be completed within two years and the direct suppliers will be vehicle manufacturers in Europe and North America.
According to its chief executive R. Seshasayee, this is a good opportunity for them to use low cost to step out of India and enter the international market. The vehicle manufacturers all over the world are under pressure from cost and AshokLeyland can do what they demand. Although things have just started, R. Seshasayee said in an interview with Indian media: “If we have the opportunity, we will continue to invest in it.â€
This is a way of operating AshokLey land into the international market. At the same time, they also have world-renowned competitive products such as trucks, buses and engines. Their statistics show that in the automotive brake system, their labor costs are only about 70% of that in Western countries, but they are higher than Europe in terms of energy and production efficiency, but in terms of the overall level, they still have It has a 15% advantage over European and North American manufacturers.
In 1948, Ashok Ley land was established in Madras, India (now the port city of India) to assemble the Austin brand cars in the United Kingdom. Later, it cooperated with the British Leland automobile company and produced commercial vehicles in 1950. In the 1980s, he cooperated with Land Rover and Fiat Iveco. In 1994, it began to increase truck production and gradually became a large commercial vehicle manufacturer in India.
According to statistics, 80% of India's urban traffic buses are produced by Ashok Leyland. Its products range from 18 to 82 seats of all types of passenger cars and 7.5 to 49 tons of trucks.
After taking possession of most of India's markets, Ashok Leyland began overseas expansion. While using its own advantages to enter the European market, these Indian automakers hope to unite more competitive domestic auto parts companies into large-scale interests. Community, accelerate the pace of entering the overseas market.
Indian automakers are now preparing to enter China, but Ashok Leyland believes that this is not the most appropriate time. They are considering whether to enter the Chinese market.