Gasgoo.com: First of all, please talk about your understanding of the commercial vehicle market in China and India.
Gupta: There are many large companies in China's commercial vehicle market (and of course some smaller ones). They generally purchase major components such as engines, transmissions, axles, etc. from other suppliers, and then they assemble themselves. Resale.
India's commercial vehicle market is different. There are only three major players in the heavy-duty truck market: Tata, Ashok Leyland, EicherMotor (the third-largest automobile manufacturer in India) and Volvo's joint venture. Besides these three, there are also some small companies such as AMW. A joint venture between Mahendra and Navistar (the two companies established a joint venture in 2005 to manufacture light, medium and heavy commercial vehicles in India). There are not many small and medium-sized enterprises like China in the commercial vehicle market in India; I think there are more than one hundred vehicle companies in the commercial vehicle market in China. They are merely assembled.
At the light commercial vehicle level, the two leading companies are Tata and Eicher, and the other, much smaller companies are Bajaj and ForceMotors. Askerk-Leland has also started to strengthen this business through joint ventures with Nissan (herein Previously, light commercial vehicles were not the focus of our business. We only started small-scale production of light trucks using Iveco technology. Our joint venture will be put into production in fiscal year 2010-2011. It is expected that the first-phase capacity will be 100,000 engines and trucks, of which 20% will be exported.
The above-mentioned major Indian OEMs have their own engine plants, transmission plants, cab factories, etc. They do not need to purchase from other suppliers - only those smaller OEMs like AMW need to purchase externally. . However, in China, almost all vehicle manufacturers need to purchase key components from the outside, so they have also formed large-scale supplier companies for certain key components, such as Yuchai and Weichai.
It can be seen that many people think that China's commercial vehicle market has matured, but in fact, the Indian commercial vehicle market is more mature, and its leading companies are quite independent.
Gasgoo.com: Back in early 2004, it was reported that Ashcroft-Leland was considering launching trucks and buses in China -- as part of expanding overseas operations; in June 2007, you established a Chinese representative office in Shanghai. Why? What was the role of the Shanghai office?
Gupta: At the moment we mainly focus on purchasing in China for the production of Indian factories. At the same time, we are also preparing for mergers and acquisitions or establishing joint ventures with an open attitude. We are now looking for a small passenger car plant (as a potential acquisition target). ). The location of this factory can be anywhere in the country. We plan to use this factory (if we wish) to serve the domestic market while also exporting some of our products to overseas markets. Our expectation is that the plant will produce 500-2000 passenger cars annually. AshokLeyland entered the European market through mergers and acquisitions last year, and we have established our own production base in the Middle East, ASEAN, and Africa. Now is a good time to reopen the Chinese market.
Another opportunity is to set up a light diesel engine manufacturing enterprise in China by means of a joint venture or acquisition, mainly a 4-cylinder diesel engine. We already have core technology and production capacity in the 6-cylinder diesel engine. At present, we import a large number of diesel engines from China, mainly for industrial and power generation equipment.
Gasgoo.com: Insiders say that the end of 2009 will be a good time for mergers and acquisitions in the automotive industry. Do you agree?
Gupta: These projects will be carried out over a long period of time. We will continue to look for opportunities. The current economic situation will not prevent us from continuing to develop our business. Perhaps when we complete a merger or joint venture, the business environment has also been correspondingly better, and that is where we will focus on growth.
Gasgoo.com: How do you judge local suppliers? Are there any challenges when it comes to China's procurement and seeking local production opportunities?
Gupta: Our cooperation with Chinese suppliers and companies is very successful. When I asked the other buyers for the same question many times, their reactions were not the same. My opinion is different from many of them, because all our experiences in China so far have been very satisfactory.
We have a good relationship with all our partners. We only look at all matters from a long-term perspective and use human and inefficient investment for the ultimate goal of developing our business. If I score, we are 100% satisfied with the quality of the product, satisfied with the supplier's delivery ability of 98%, and think that their price is competitive enough. We purchase some key components and safety parts in China. We work with these suppliers and do not ask them to have excellent quality and supply capability in the short term, but they must ensure that their processes are healthy and orderly.
I am proud of these Chinese suppliers. We trust each other, and even at this very difficult time, both parties still support each other.
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