The slowdown in the automotive industry notwithstanding, the Indian market continues to offer long-term promise to investors.
And the latest wave – after Japanese and Korean manufacturers – seem to be coming from China. Chinese auto manufacturers, reportedly, are expected to pump in close to $ 5 bn in the Indian market over the next three to five years. Some of them have already made investments, while others have committed to infuse capital in a market that could potentially become the third largest automobile market in the world in some time.
At the Auto Expo in February, the Chinese interest in India was evident with MG Motor, Great Wall Motors (GWM) and FAW Haima putting their product strength, technological might and financial capabilities on full show. MG Motor India, a SAIC Motor subsidiary, has made a good start in India with two of its SUVs – the Hector and ZS EV – being accepted well by Indian consumers.
Great Wall Motors, China’s largest SUV maker, has announced a $ 1 bn investment in the Indian market and is committing to launch its first product in 2021. We spoke to Hardeep Singh Brar, Director, Marketing & Sales, GWM India and Kaushik Ganguly, Director – Corporate Strategy & Planning, GWM India to get a deep insight into Great Wall Motors’ plans for India.
With the first product committed to roll-out within the next 18 months, Great Wall Motors’ market development tasks are on an aggressive drive. The first major area of focus is the manufacturing plant, and the company expects to secure a deal with General Motors to take over its Talegaon production site in Maharashtra sometime in Q3 this financial year.
The second broad bucket in focus is research and development. Great Wall Motor, incidentally, has been functioning a R&D centre in Bengaluru since 2016, primarily centred around developing software solutions for the group’s global operations. The plan, henceforth, is to go beyond what the company is doing now and have more India-specific R&D as well that will also include some hardware-related development.
The group has 10 R&D centres globally across seven countries, and that – as Brar said – highlights the group’s belief in the Indian market – not just to sell its products but also help develop and create IP from its Bengaluru centre. Great Wall Motors’ R&D network functions synergetically, and the work being done in the Bengaluru centre is part of the global network, going into the global R&D pool. In the last seven to eight years, Great Wall Motors has pumped in over $ 1.5 bn in R&D across its centres in Germany, Austria, Japan, Korea, US and India besides China. The third chunk of investments is going into developing the company’s vendor base, and the last one is on sales and marketing.
BUILDING THE BRAND
Building a brand from scratch has always been a daunting task, and Great Wall Motors India has two brands to contend with – it’s SUV brand HAVAL, and the electric mobility brand, GWM EV. The company isn’t looking to launch both the brands simultaneously. The EV brand will be introduced to the market once the first brand, HAVAL, is launched, established and consolidated in the market. With HAVAL, the company would eventually like to be present in every SUV segment in India.
Apart from products, Great Wall Motors is firmly focussed on introducing technology disruptions in the market – even with the all-round experience it wants to offer its customers. It is looking at positioning itself as a premium brand, and would like to be perceived that way by its customers.
There is also this other matter of Great Wall Motors being a Chinese brand. Most Chinese brands that have set foot in India until now are well known internationally. Great Wall Motors, although the biggest SUV maker in China, is relatively unknown – putting an additional pressure on the company to ensure Indian consumers know about the brand as a premium SUV maker. The initial feedback from potential partners, however, has been very encouraging. The 50 best dealers in the country, for instance, were invited for dinner to take a closer look at the Great Wall Motors cars and they returned “massively impressed”. “Such product quality makes our task easier. While we know what the challenges are, we also feel that we’ll be able to overcome them, said a confident Brar.
A white spot analysis of the market revealed there aren’t many in terms of price bands. However, in terms of opportunity white spots, Great Wall Motors is looking at bringing in technologies and features that Indian mainstream consumers have not experienced until now. There a is latent need or want in the consumers’ mind space, and Ganguly said the company will try and fit into that space.
There are two areas that would act as key differentiators – Great Wall Motors’ focus on clean energy and intelligent safety. The company’s T-Safety philosophy covers occupant, pedestrian and vehicle safety to ensure both proactive and reactive safety. It is committed to go beyond safety regulations for the market, and would consider getting active safety features such as fatigue alert, electronic stability control, adaptive cruise control, speed & lane control as well as collision warning systems.
From a propulsion perspective, Great Wall Motors is considering all forms of electrification, including pure EVs and various levels of hybrid technologies. Even though fuel cells do not make sense in the Indian context yet, Great Wall Motors’ R&D team is working on fuel cell vehicles
The current penetration levels of e-mobility in the country is abysmally low, but the long-term potential is promising, prompting Great Wall Motors to consider launching its EV brand in India. While driving range and charging infrastructure continues to be the major pain points in rapid EV adoption, Brar believes the cost difference between an EV and its ICE equivalent shouldn’t be more than 25-30 %. At the prevailing 80-100 % difference, most people will continue to stay away from buying EVs, he argued. Solving these three pieces will be the inflexion point for the EV industry, he said.
As a matter of fact, Great Wall Motors has its own battery plant in China. And that is something the Indian operations is exploring as well. It makes its own drivetrains and motors as well. The parent organisation’s wherewithal, knowledge and experience in these areas would make it easier for Great Wall Motors India to get into EVs.
CREATING THE SUPPLIER ECOSYSTEM
In China, Great Wall Motors manufactures most of the critical components themselves. Some of those companies might as well come and set up shop in India. While that is still under evaluation, what is clear though is that whichever supplier decides to come to India will not just supply to Great Wall Motors, but other customers in the market as well. That apart, the company is also exploring joint ventures with Indian companies, as well as sourcing from global companies. The idea would be to manufacture more and more in India, said Ganguly.
Steadily increasing the local content in its products will be a key intent for Great Wall Motors India. The prime objective therein would be to maintain quality, and that is an aspect non-negotiable to the company.
Almost 75 % of SUV volumes in the market currently – primarily from the C-SUV segment and above – comes from the top 50 cities. Great Wall Motors is eyeing these 50 markets to begin with, and it doesn’t matter where they are located in the country. In terms of channel partners, Great Wall Motors wants fewer partners, but ones that are big enough to invest into the territories they are given. In fact, in a month since its products were showcased at the Auto Expo, the company received over 500 applications from interested dealer partners.
Owing to the traction the company received at the Auto Expo, where it also launched its “Coming to Mesmerise India” campaign, Brar believes setting up the network would be the easiest piece of work for Great Wall Motors. Considering the market slowdown, and the fact that many businesses are actually looking at exiting the automotive business altogether, the Great Wall Motors brand has received a “phenomenal” response.
Over the next few years, and in a phased manner, the company is looking at recruiting around 3,000 people across all its entities. And as per business requirements, the number would be ramped up.
Great Wall Motors is clearly very confident in the India growth story, and it believes its strengths go very well with the changing consumer preferences of India. Further investments, as and when they are needed, wouldn’t be difficult to source. For now, though, the team at Great Wall Motors is aiming to get the Talegaon plant deal done, so that it could prepare itself for its first market introduction sometime early in 2021.
TEXT: Deepangshu Dev Sarmah
PHOTO: Great Wall Motors