The Indian car industry is growing and is on track to become a major player in the automobile market. It can be seen through the emergence of new car brands such as Kia, Citroen and MG Motors with collaboration with Indian companies. The Indian car industry has grown exponentially over the past decade. In 2011-2012 there were about 1 million passenger vehicles sold in India.
The Indian car industry is one of the fastest growing in the world and is steadily increasing its production. Lets us take a deep look that how Indian brands can replace Western car brands in Russia.
Russia Wants Indian Cars
1. Academic Sales
The Indian car industry has grown exponentially over the past decade. By 2020-2021, it is expected to be 5 million passenger vehicles sold in India each year (source). The growth of this industry is due to a number of factors including increased consumer spending power, reduction in import tariffs, and reduced interest rates.
The Indian government has created policies that have encouraged automobile manufacturing companies within India to produce cars in India. This policy has made it possible for Indian companies to compete with global car makers like Ford and Toyota. The Indian government has created policies that have encouraged automobile manufacturing companies within India to produce cars in India. This policy has made it possible for Indian companies to compete with global car makers like Ford and Toyota.
2. Russia- Ukraine Invasion
When Russia fires up an attack on Ukraine many international organizations put sanctions on Russia. Various NATO Members along with multiple international companies have halt their business in Russia. This includes various automotive companies that have decided to shut down their production and manufacturing unit in Russia. Their decision taken was not intentionally but due to the ongoing war, many shipping industries stopped their sea trade business with Russia. With the supply chain breakage, the exports of various accessories and parts were not able to function properly. Sanctions may curtail imports of equipment and machinery used in the manufacturing of auto parts. In that case, Russian automakers likely would obtain similar equipment from the European Union and China.
3. Sanctions Plunged Russian Automotive Sales
Car sales in Russia plunged the most on record since last month as sanctions undermined domestic production and most foreign automakers suspended operations in the wake of President Vladimir Putin’s invasion of Ukraine. Almost each and every foreign automaker with production facilities in Russia, including Volkswagen Group, Ford Motor, and Mazda has suspended work in the country, while others stopped importing vehicles. This is the best chance for Indian Automotive sector like Tata and Mahindra to launch their vehicle.
4. Quest for Competitive Cars Against European Brands.
In 2018, Indian car brands accounted for 2.5% of total car sales in Russia. In fact, Indian car brands have been gaining market share in Russia at a rapid pace. The reason for this is simple, Indian car brands offer a good products at a competitive price. In addition, many Indian car brands have strong focus on customer service, which is something that is often lacking in Russian car dealerships.
As a result, it is not surprising that Indian car brands are gaining popularity in Russia. In fact, there is a good chance that Indian car brands will eventually replace western car brands in Russia.
Renault is the most prominent brand in Russia and they have great shares in hatchback cars. Another car company is Hyundai which occupies 27% of the market share of Russia and the third largest car maker is Volkswagen in Russia. All these companies have halted their production due to supply chain breakage. Due to current war sanctions many Russian have started boycott using American and European brands so India has the right time to launch their cars into Russian market as the Russian Government also want to expand its business with India.
5. Challenges Ahead
It is no secret that the Russian car brand Lada has been making waves in the automotive industry in recent years. But how can Tata and Mahindra beat them at their own game?
For starters, Tata has the advantage of being a much larger and more established company. They have the resources to invest in research and development and a strong dealer network.
Tata and Mahindra both have a strong reputation for quality. They produce some of the most reliable cars on the market, and their vehicles are known for their durability.
They also has a very loyal customer base. Many Tata drivers have been with the company for years and are unlikely to switch to Lada.
There are a few things that Tata and Mahinda needs to do to beat Lada-
- They need to continue to invest in research and development. It will allow them to develop new technologies and stay ahead of the curve.
- They needs to focus on expanding its dealer network. This will give more people access to their cars, making it easier for customers to get service and support.
- They needs to continue to provide quality products. They have to keep their cars reliable and durable, and they also need to offer attractive pricing.
6. India- Russia Relations
The recent improvement in India-Russia relations has been a boon for the automotive industry in both countries. In Russia, a growing number of consumers are opting for Indian-made cars over Western brands. This is due to a number of factors, including the reliability and affordability of Indian cars.
Indian companies such as Tata Motors and Mahindra & Mahindra have been quick to capitalize on this trend, and are now major players in the Russian automotive market. This is good news for both India and Russia, as it boosts trade and investment between the two countries.
There are several reasons why Indian cars are proving popular in Russia-
- They are much more affordable than Western brands. This is especially important given the current economic climate in Russia
- Secondly, Indian cars are known for their reliability. This is a key consideration for Russian consumers, who often have to deal with poor road conditions.
- Finally, Indian manufacturers are able to offer a wide range of models to suit all needs and budgets. This is in contrast to Western brands, which often have a limited presence in Russia.
The growing popularity of Indian cars in Russia is a win-win for both countries. It is boosting trade and investment, and providing Russian consumers with affordable, reliable cars.
Would you want to see Indian cars on Russian roads ? Tell us in the comment Below.