The Chinese automaker had signed a memorandum of understanding in 2019 with the Indian group.
Changan Automobile, the Chinese automaker, will delay its India entry by at least a year due to the coronavirus crisis, people knowledgeable about the matter said.
The company has also put on hold its plan to establish a partnership with India’s Group Landmark. It had signed a memorandum of understanding in 2019 with the Indian group which operates a dealership network for Mercedes-Benz, Nissan, and Fiat Chrysler Automobiles, but until now there has been insignificant progress over the pact, they said.
The Chinese automaker has also yet to decide on a plant site and vendors, though it has formed a regional liaison office, and its top executives have made several visits during the last two years.
It may now review its strategy to enter India on its own in the existing market with the coronavirus pandemic expected to influence the consumer’s buying decisions, and may look for a partnership with a regional manufacturer to cushion the risk, the people stated.
Changan was supposed to create separate companies for manufacturing and distribution in the country. According to the initial discussions, the plan was to spend close to ₹4,000 crores ($526,600) and launch the first product here in 2022. It was also supposed to use Indian investment as an export hub. Gujarat and Andhra Pradesh were lobbying for such a project.
The automaker has four international manufacturing facilities which are located in Russia, Iran, Brazil, and Pakistan. The automaker also has joint ventures with Ford, Mazda, Suzuki, and the PSA Groupe.
Changan had held talks with several vendors to set up a vendor park in Chennai, people said. Suppliers said the demands of the Chinese state-owned company were very difficult to meet.
Changan had appointed Sanjay G as its India expert to speed up its entry process. If there were no crises led by coronavirus then Changan’s first product to hit the Indian market would have been the CS 75 Plus premium SUV, the people stated.
