In the past decade, Chinese carmakers have moved from budget copycats to global contenders with design, tech, and scale on their side. Brands like BYD, MG, and Chery have established themselves across Southeast Asia, South America, Europe, and parts of the Middle East. India, however, remains an outlier. Chinese OEMs have so far struggled to gain a firm foothold in the world’s third-largest car market.
From Local To Global
Between 2010 and 2023, China became the world’s largest automobile exporter, overtaking Japan in volume. The rise has been led by BYD, SAIC, Changan, and Geely, among others. BYD alone exported over 240,000 vehicles in 2023, with a strong focus on EVs. In contrast, traditional Japanese and Korean manufacturers posted slower growth in overseas expansion.
Chinese brands have also been aggressive in acquiring foreign assets. SAIC took over MG, Geely controls Volvo and Polestar, and BYD has emerged as the leading EV maker globally by volume, even ahead of Tesla in certain quarters. These acquisitions allowed Chinese firms to skip R&D cycles and fast-track product development using proven platforms and technologies.
Even companies that were famous for making other items such as Xiaomi have expanded into the electric vehicle industry. There are dozens of brands producing EVs in China at the moment besides conventional brands, and they’re doing an extraordinary job at it. The Xiaomi SU7 recently broke the Nurburgring record!
India: Still Elusive
In 2019, MG entered India with the Hector, built using a SAIC-owned Baojun platform. While initial sales were strong, the brand hasn’t kept pace since. MG India posted sales of 56,902 units in FY24, down from 63,690 in FY23. The Windsor, however, has seen success.
BYD, meanwhile, has tried to position itself as a premium EV maker. The e6 and Atto 3 were both launched via the SKD route and priced significantly higher than ICE competitors in their respective segments. In FY24, BYD sold just over 5,400 units in India, limiting its exposure largely to fleet customers and premium customers.
Great Wall Motors announced its entry in 2020 and even showcased products at the Auto Expo. But the plan was shelved amid geopolitical tensions. Chery, Haima, and others have remained in evaluation since.
Roadblocks: Policy, Perception, & Production
Following the clash in 2020, the Indian government tightened FDI norms for Chinese companies. Any investment now requires clearance from the Centre, which has slowed expansion plans.
There’s also limited clarity around land acquisition for manufacturing, and localisation mandates further complicate supply chain planning. SAIC’s Halol plant has faced production limitations, while BYD has no dedicated plant and operates under a dealer-led SKD model. Even MG’s planned IPO in India, aimed at diluting Chinese equity and enabling expansion, has faced delays. BYD’s proposal to invest Rs 8,000 Crore for a factory with Megha Engineering was also reportedly rejected due to security concerns.
Public sentiment has also been a factor. “Chinese product” carries a stigma among certain buyers, especially in rural and semi-urban areas. Even in metros, there is hesitance among some segments due to concerns around long-term support, quality, resale value, and spare part availability.
Can They Scale?
Despite slow growth in India, Chinese OEMs are expanding rapidly elsewhere. BYD is building factories in Brazil, Thailand, Hungary, and Indonesia. MG is scaling up in the UK, while Changan is gaining ground in Saudi Arabia and Mexico. Their products now regularly meet or exceed global crash test norms and offer class-leading features and performance, especially in the EV segment.
However, India’s car market remains price-sensitive and heavily competitive. Maruti, Hyundai, Tata, and Mahindra control over 85% of the market. Each has deep local manufacturing ecosystems, aggressive pricing, and high brand trust. Without significant localisation, it’s unclear how Chinese OEMs can compete on cost or scale operations in the long term.
Final Outlook
Chinese carmakers are globally aggressive and technologically ahead in the EV race. However, unless these brands achieve full localisation, diversify ownership structures, and find strong domestic partners, their impact on the Indian market will remain marginal compared to their success elsewhere.
