China's E-Car Market Lures Mahindra And Mahindra

By mdkg1116

Oct 12, 2016 09:09 AM EDT

India's SUV maker is eyeing for a piece of action on the hottest electric vehicle market which is China. Mahindra and Mahindra Ltd.'s is looking for a joint venture partner in China to manufacture and sell of EVs.

China is now the world's biggest auto market, said Arvind Mathew, chief executive officer of Mahindra Reva Electric Vehicles Pvt Ltd. The firm recently sells electric cars in the U.K. and Indian subcontinent. The firm offers its powertrain technology to buyers other than its mother.

We continuously look at the Market in China to build ties with us and make an upscale said the proponent of Mahindra. In an interview on Thursday, Mathew refused to admit whether Mahindra electric had already discussed with companies in the local. Chinese market is a potential avenue for it has all kinds of electric cars such as two-wheelers, three-wheelers, buses and cars.

Automakers from India have been left behind as it dragged. Compared to its opponents such as US, Europe and Japan, they had cracked Chinese market to the extent that Chinese carmakers ventured abroad into existing markets and have pact with them.

The South Korean unit,of Mahindra, Ssangyong Motor Co., has expressed that it will look to markets such as China to  propose for an anticipated decline in shipments to the U.K. following the Brexit referendum. On the other hand, the rival Tata Motors Ltd.'s producer of luxury Jaguar Land Rover unit produces the Evoque SUV in China through its joint venture with Chery Automobile.

Though there was a stiff competition, a successful joint venture in China will pit Mahindra from more than 200 Chinese companies, some backed by the likes of billionaires Terry Gou, Ma Huateng, Jack Ma and Jia Yueting. They all capitalized on the surge in demand on the back of generous government incentives.  Led by Chairman Anand Mahindra, the Indian conglomerate, it stated that he has interests spanning airplanes, yachts, hotels and residential homes and last year bought Turin-based Ferrari designer Pininfarina SpA.

 The new-energy vehicles has been identified by China. It defines as plug-in hybrids, all-electric and fuel-cell vehicles, as a strategic industry to promote its goal of energy conservation and pollution control. The government has targeted for 5 million EVs to ply its roads by 2020. It has poured in billions in consumer subsidies, research and development grants, and construction of charging infrastructure.

 Manufacturing in China is a necessary step because imported automobiles are subject to a 25 percent duty and don't qualify for government subsidies according to Mahindra. Thus, making them less attractive against locally produced vehicles.  Mass-market models such as those sold by Mahindra, which compete on price.

 Kavan Mukhtyar, a management consultant at PricewaterhouseCoopers in Mumbai, said "China is not only a fast-growing electric market but also highly competitive with strong local electric-car companies," said who's advised auto industry executives.

 What matters most is learning from the Chinese market. Eventually, Chinese electric-car companies will enter the Indian market explained Mahindra.

In addition, Mathew said, in India, electric cars will gain popularity as air quality worsens. The government should consider following other countries in offering incentives for battery production and address a lack of charging infrastructure.

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