Russia, India likely to follow Chinese auto mobile industry

Meyrick Cox of Moelis & Co., mentioned on Tuesday that Russian and Indian companies are likely to follow the foot steps of China in executing the overseas business to expand automobile industry.

Chinese auto industry gave a decade in enhancing its brands, technology and distribution capabilities through ventures, tie-ups and alliance like culminating in Geely's buying Volvo from Ford for $1.5 billion in this year.

Cox, told that, Russia is having the same problem which China faced ten years ago. He also added that, there were joint ventures like Lada manufacturer AvtoVAZ's ventured with Renault SA, the company as well as its rivals like GAZ all were under pressure from the Kremlin to advance the Russia's auto industry.

He further made a point that, the question that lies here is that these companies would pay the consultancy to help in develop things for them or it will be their own work or effort or with alliances or tie ups. As per his opinion, he said, the company would purchase if there are likable assets which will add to company's profit.

Also stating his opinion on the Indian auto giants, he said that, the big players in India which are family owned auto companies such as Hinduja Group, Mahindra Group—Mahindra & Mahindra unit are utility vehicle producers that may pursue international deals which would help these companies to cater the domestic market which is 1 billion or more.

The biggies of China and state controlled leaders, Dongfeng and FAW were keen to boost it's branding, know-how and foot print.

As per Cox, it is the same problem which everyone faces. He also said that, there is not much to buy in terms of assets. In every ten years, the auto industry revamps itself in terms of its ownership. But currently the companies have done it in the two years.

Geely chairman Li Shufu said in an interview, in August that Volvo is a great brand which is difficult to find. In amusement he also quoted that, Chinese auto companies would like to buy Daimler AG's Mercedes unit if it were for sale.

Cox further said, the Chinese auto markers focus in bringing its brand in the world market. It is not the right move as the demand vary and the Japaneses auto makers are also following the same trend. The focal point is to make car for Chinese people in China. He also said that, Chinese auto maker SAIC Motor Corp, is launching “Roewe” auto mobile in Europe, the Chinese car manufacturers will start making inroads in the developed markets.

He also predicted that China is growing very fast and the market will be flooded with the Chinese auto mobiles in next five years time. And those who believe it will happen in a decade or two will be shocked.

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