Two ways to succeed: Asian giants and the automotive industry

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For a frequent traveler to both India and China, it is fascinating to see the way the two Asian giants are developing over time.   China’s appetite for growth seems insatiable, and even with major problems in terms of congestion and pollution, it will grow to be selling over 24m vehicles this year. The automotive industry […]

For a frequent traveler to both India and China, it is fascinating to see the way the two Asian giants are developing over time.
 
China’s appetite for growth seems insatiable, and even with major problems in terms of congestion and pollution, it will grow to be selling over 24m vehicles this year. The automotive industry represents 14% of the country’s GDP, and the Chinese mantra of “Big and Strong” (meaning that it is big today, and now needs to become strong enough to withstand any future mishaps) is proving an apt statement of intent.

India’s growth is more measured. In the world’s largest democracy, the pace of change is slower, and the government’s investments in infrastructure appear to lag behind consumer demand for four-wheel transportation ahead of the traditional two- and three-wheel markets. India will sell about 3m cars this year, in what looks like a pretty flat market.
 
However, growth by acquisition shows a different picture. When Geely bought Volvo Cars from Ford, there was a commonly held view that they had got a bargain, and conversely when Tata bought Jaguar Land Rover just as the market was at rock-bottom there was a feeling that this may not have been the best business deal ever made. Now we see that the Chinese investment is still to pay dividends, while the Indian investment has proven spectacularly successful.
 
Maybe there is a lesson here for us to learn: that while the Chinese government can help the automotive industry to grow at home, the Indian business culture may see it flourish abroad. But whatever the conclusion, both countries are going to play a major role in the industry over the next few years, and I’m looking forward to being a regular visitor for years to come.  

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