In the past, the Indian automotive industry relied heavily on imported technology, but over the past few years, manufacturers started collaborating with foreign vehicle and component manufacturers to make advancements in the industry. Since they started engaging in product innovation through joint efforts in research and development, a host of opportunities opened up for them.
When Tata Motors introduced the fuel-efficient US$2,250-worth compact car, they gained worldwide recognition for their innovative thinking. And when they acquired the luxury brands, Jaguar and Land Rover, people gave them a second look because now they’ve expanded their market to accommodate a different set of buyers.
On the other hand, Mahindra has been a strong player in the tractor business in America, but the passenger vehicle market is another matter. When Mahindra announced their entry to the US market, very few locals were familiar with their brand. We all know that a fresh player in the automotive business is at a huge disadvantage right off the bat, but when Global Vehicles announced the type of vehicles Mahindra will be offering, people started to take notice. Mahindra is making rugged, dressed down, powerful midsize trucks and SUVs in clean diesel and later hybrid powertrains.
It seems the Indian auto manufacturers will be making a mark in the industry in the next few years mainly because they are making the right decisions. They’re building these amazingly innovative, yet functional niche vehicles that are destined to make money.
In an article at DriveInside.com, Mike Hanley, global automotive leader at Ernst & Young, during a recent visit to India said that this is the perfect time for Indian car makers to enter the US market. He also sees great promise in their expansion, citing the Japanese and Korean car companies’ outcomes. He also suggested capitalizing on the small, fuel-efficient car market because of the highly successful small, “green” cars like the Toyota Prius, especially since India is fast becoming the world’s small-car hub. A lot of foreign and local auto suppliers have established their own manufacturing plants for small-cars in India.
Both Tata Motors and Mahindra are set to enter the US market soon and while it may take years before they can gain significant market share, their efforts in innovation will propel them forward, provided they first get past the challenge of satisfying the preferences and standards of the US market.