The Chinese automakers MG Motor and BYD have already arrived in the Indian Electric Vehicles market and now another Chinese electric vehicle manufacturer is ready to enter the Indian Electric Vehicles market. The company which was previously been in discussion with Sajjan Jindal’s JSW, will be announcing investments and India entry plans in partnership with the Stellantis group, which recently bought a stake in its global operations.
As per the Time of India Sources, “Leapmotor and Stellantis are likely to announce their plans to enter India, and this may happen as early as the next few weeks”. If the Indian government approves, the budget electric vehicles developed by Leapmotor will be launched in the Indian auto market very soon, which will intensify the competition in the green car space.
The collaborator Stellantis is one of the top automakers worldwide and currently runs a slew of brands across continents, these include Citroen, jeep, Chrysler, Peugeot, Fiat, and Maserati. The company Stellantis is already present in India through Jeep and Citroen and is now planning to go on overdrive when it comes to expanding operations, introducing brands, widening retail, or making new investments.
The global partnership between Stellantis and Leapmotor perhaps gives confidence to the Chinese company to make a bid for the Indian market, despite strict checks on investments from companies that originate from countries that share a land border with India.
The one Chinese carmaker BYD has already struggled, due to the government’s strict regulations, to expand in India after failing to get approvals from the government on its investment plans, despite making a bid with a local partner. On the other hand, MG Motor, owned by China’s SAIC group, had to finally give space to an Indian partner as Sajjan Jindal’s JSW bought a significant stake in the company with agreements to take up to 51% over the next few years.
Stellantis had announced plans to invest $1.6 billion in Leapmotor to acquire approximately 20% in Oct last year, emerging as a significant shareholder in the Chinese budget EV Company. The deal between the two companies also outlined the formation of a new entity called Leapmotor
International, a 51:49 Stellantis –a led joint venture that holds exclusive rights for the export and sale, as well as manufacturing of leap-motor products outside Greater China. The India entry plans are expected to be led by the new export-oriented entity.
Economies of Scale: Electric Vehicles
The only way for Stellantis to stay relevant is to have economies of scale with a competitive costing structure. Leapmotor can end up being the proverbial Knight in shining armor here where its Electric Vehicles range can hopefully generate the volumes and give a fillip to the overall business. or many years.
BYD is yet another Chinese auto brand that has been present in India focusing on electric buses through a collaboration with Olectra Greentech, a subsidiary of the Hyderabad-based Megha Engineering. BYD has also entered the automobile arena with e6 and Atto 3 followed by the more recent Seal. The Chinese auto brand has emerged as the latest threat to Tesla’s dominance in the global EV space and will in all likelihood, race ahead and come out tops this year.
Strong Local collaborator:
India may be ready to allow Chinese investments into its auto domain going forward if one key criterion is having a strong local partner in place.
BYD, therefore, needs to find someone with the influence of a JSW Group, which has collaborated with MG Motor. Likewise, Leapmotor is in the Stellantis Kitty which has been around for some time, and operates from two facilities in Tamilnadu (for Citroen) and Maharastra (Jeep).
“Perhaps the future will see a Citroen-branded EV that is a Leapmotor product. MG motor was quick to realize that SAIC needed to be in the background since the Chinese association would have struck a jarring note in India.” Says an auto industry veteran. The Strategy worked and MG Motor, as the front face, tasted quick success with its Hector SUV and is now an established brand in this market.
It is still a million-dollar question if another Chinese automaker will be inclined to follow this route for India. Before tensions broke out along the border with Chinese troops attacking Indian armed forces, Great Wall Motors was all set to step into the General Motors plant at Talegaon near Pune, the needless aggression from China only saw relations with India nosedive with the result that all investments were put on hold.
Great Wall, motors waited for nearly two years but when became clear that nothing was going to change, the company wisely decided to park its investment in Brazil and Thailand. The GM plant finally went to Hyundai Motor India, which will now use it to service the western region as well as overseas markets.
