In the overseas strategy of Foton, India and Russia are key markets. That’s why Foton started its operation in India 5years ago. So far, the company has carried out three times of capital increase totalling ￥ 2 billion. The company is now ready to manufacture the whole series of products including heavy duty truck, light duty truck and other commercial vehicles.
Chinese vehicle makers have been reluctant to enter the Indian market, and little progress has been made. The reason lies in the numerous market obstacles.
The first obstacle would the heavy consuming tax fallen upon car purchasing. The tax rate stands between 20%-24%, and has been further increased to 30% in 2013.
Secondly, the technological level of Indian auto industry is unqualified, the same does human resources. Many car parts could not be produced locally in India. And the working efficiency of Indian workers is lower than their counterparts in other countries.
But the disadvantages of India could be a good news for foreign vehicle makers. Only 3 companies in India are producing trucks, who are too weak to compete with truck makers from other countries, leaving huge business opportunities.