China's Changan revs up for India entry

Company officials visited both states to find locations to set up factory

China’s Changan Automobile Company is planning to set up its first India factory, with a capacity to manufacture 200,000 vehicles a year. The company recently visited Andhra Pradesh and Tamil Nadu and, according to sources, is looking for a local partner.

Changan Automobile Company, China’s oldest automobile manufacturer, is headquartered in Chongqing. The company is a state-owned enterprise, which manufactures cars ranging from entry-level hatchbacks to sedans to sport utility vehicles to vans to pick-up trucks. It also has a range of electric and hybrid vehicles.

According to the company website, its brands include New Benni and Benni Mini in the hatchback category and Raeton in the higher segments.

While an e-mail questionnaire sent to the company was not immediately answered, sources in both the state governments confirmed that officials from Changan's head office had visited the states.

According to sources, the new facility could attract around Rs 1,000 crore during the initial phase.

In 2014, Beijing-based commercial-vehicle maker Beiqi Foton Motor Company announced plans for a factory at Chakan near Pune to produce a full range of commercial vehicles, but there has been no launch so far.

Sources added that the company would set up a facility with capacity to produce 200,000 units a year initially, which will be expanded gradually.

The company wants to keep its suppliers in the same complex or close by, sources added. This means, new automobile clusters would come up at Tada (in Andhra Pradesh) near the Andhra Pradesh-Tamil Nadu border, 55 km (kilometre) from Chennai. Sri City at Tada as a business city is fast becoming a hub for manufacturing.

Recently, Isuzu has inaugurated its plant and Hero is planning to set up a facility next to Sri City. These companies are using Chennai's suppliers’ base, while enjoying incentives, cheap land and access to the government and bureaucrats. Experts say the same factors could make the Chinese maker choose Andhra Pradesh over Tamil Nadu.

Recently, Japanese auto major Isuzu inaugurated a Rs 3,000 crore facility at SriCity.

An official said Changan is also scouting for a joint venture partner. Its joint ventures in China include the likes of Suzuki, Ford and PSA Peugeot Citroen.

It has six manufacturing bases in China and four research and development centres at Turin in Italy, Yokohama in Japan, Nottingham in England and Detroit in US.
Changan Automobile
200,000: Vehicles a year capacity being planned in the country

Maruti Suzuki
1.5 million: Units a year at NCR alone, Gujarat plant has not come on stream

Hyundai
680,000: Vehicles a year is combined capacity of two factories in Chennai

Honda Cars
240,000: Units a year, comprising 120,000 units at Greater Noida and 120,000 units in Rajasthan

Ford
440,000: Vehicles a year of combined capacity in Tamil Nadu and Gujarat units

Renault-Nissan  
400,000: Units per year at a plant in Oragadam near  Chennai

Source: Companies

QUICK SKETCH

Name: Changan Automobile Company (Chana Auto)

Type: A subsidiary of state-owned China South Industries Group Corporation

Established: In 1862, China’s oldest automobile maker

First vehicle: Changjiang in 1959

Headquarters: Chongqing

Status: One of the top four automobile groups in China

Sales: More than 8,500 consumers buy a new Changan every day, says company

Makes: Entry-level hatchbacks to sedans to sport utility vehicles to pick-up trucks

Also: Into electric and hybrid vehicles

Main subsidiaries and alliances:  Chongqing Changan Auto, Changan Ford, Changan Mazda, Changan Suzuki, Changan Hafei, Changan PSA, Jiangling Motor Holding (Landwind)