A woman takes a selfie beside a logo of SAIC, China's largest auto manufacturer, during an auto show in Beijing. (Photo : Getty Images)
China's largest automaker SAIC Motor (formerly Shanghai Automotive Industry Corporation) is set to invest $1 billion in India by 2018, with plans to produce vehicles for local users as well as for export, the Business Standard reported.
The company said that proposals for the hosting of its manufacturing unit have been presented by governments of three states: Maharashtra, Andhra Pradesh and Tamil Nadu.
Industry sources said that the company will announce its plans after it has been finalized, in the first or second quarter of next year.
Earlier, SAIC expressed interest to acquire the General Motors plant in Halol, Gujarat, where the Chevrolet Tavera are manufactured. The company was initially interested to buy the plant completely, but later appeared to have lost interest in it.
"If SAIC is keen to invest in India then it is only fair that it expects some state government incentives in return. The Halol plant is not new; there would be no incentives with it," the source was quoted as saying.
A few years before, SAIC bought some shares in General Motor's India unit, the report said.
"From the time the construction of a Greenfield plant begins, it would take a maximum of 18 months to inaugurate the factory and launch the first product. This should happen by late-2018 or early-2019 for SAIC," the source said.
SAIC owns the brands Maxus, MG, Roewe and Yuejin, as well as other products in other categories. The company has also cooperated, through joint ventures, with several companies that include General Motors, Iveco, Skoda Auto and Volkswagen.
With the help of General Motors, SAIC moved into the Indian market in 2010 with the aim to sell Chinese products. But now, it changed its plans and instead, it would like to produce products locally for local users.
"SAIC believes India needs its own product lines, and not those developed in foreign markets. There will be an India-focused product-development center. This will also help SAIC keep the product costs down and operate with far greater agility", the source added.
According to the report, products that are locally developed and more focused on the needs of Indian consumers receive greater acceptance in the country. It cited the Brio hatchback that was developed outside and became a failure for Honda while Hyundai succeeded with the Grand i10, which was developed in India.
The company has also outsourced research and consulting firms KPMG and PricewaterhouseCoopers to conduct studies on asset evaluation, component supplier setup and product marketing. It also plans to bring its supplier partners to India.
Currently, SAIC has established corporate offices in Gurgaon and plans to hire a chief executive officer for its operations in the country.
SAIC is expected to face challenges to gain a foothold in the Indian market, two-thirds of which is controlled by Maruti Suzuki and Hyundai. Other players such as Volkswagen, Ford, General Motors and Fiat have been marginalized despite operating in the country for decades.
