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China fights for spare parts market India launches low-cost tactics
Toyota Motor is aiming to increase its market share in China, with a strategic shift in its collaboration focus towards other companies within the FAW Group. This move is essential for Toyota to achieve its target of capturing 10% of the Chinese automotive market. In line with the mutual interests of Toyota and FAW Group, Xiali must seek new growth opportunities to sustain its competitive position.
In late August, Ashok Leyland, an Indian automaker preparing for global expansion, unveiled a comprehensive strategy. The company recognizes that Chinese and other Asian markets are highly attractive to global automakers. However, Ashok Leyland believes it cannot match China’s mass production capabilities. While China can produce millions of units daily, the company highlights its strengths in product design, machinery, and equipment. Additionally, it claims to have lower production costs compared to China, which has led to a fundamental shift in its overseas expansion strategy.
As India's second-largest commercial vehicle manufacturer, Ashok Leyland aims to expand its production capacity by setting up plants domestically and then entering the international automotive market to supply parts and components to major global automakers. To do this effectively, the company focuses on understanding the urgent needs of vehicle manufacturers worldwide. Recently, Ashok Leyland announced a Rs. 1,500 crore investment to build an engine parts supply plant, expected to be completed within two years. The plant will directly supply European and North American vehicle manufacturers.
According to CEO R. Seshasayee, this is an excellent opportunity for Ashok Leyland to leverage its low-cost advantage and enter the global market. With global automakers under pressure from rising costs, Ashok Leyland is well-positioned to meet their demands. Although the initiative is still in its early stages, Seshasayee expressed confidence: “If we have the opportunity, we will continue to invest in it.â€
Ashok Leyland has a long history, having been established in Madras (now Chennai) in 1948 to assemble Austin cars from the UK. It later partnered with British Leland to produce commercial vehicles in 1950. In the 1980s, it collaborated with Land Rover and Fiat Iveco. By 1994, it began increasing truck production and eventually became one of India's largest commercial vehicle manufacturers. Statistics show that 80% of urban buses in India are made by Ashok Leyland. Its product range includes passenger vehicles from 18 to 82 seats and trucks from 7.5 to 49 tons.
Having dominated the Indian market, Ashok Leyland is now looking to expand internationally. It plans to use its competitive advantages to enter the European market and unite local auto parts suppliers into a larger industry network, accelerating its global expansion. However, while considering entry into the Chinese market, Ashok Leyland believes it may not be the best time to do so and is currently evaluating the opportunity.