How India built a successful motor vehicle industry


Baraza JM

By Baraza JM
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Having visited India several times, I can‘t get over the fact that cars are way cheaper there compared to our Kenyan market. A Cross Suzuki costs equivalent of Sh1.3 million while the Uber ‘insect’ costs equivalent of Sh500,000 straight from the showroom. I won’t even mention a local jeep model with a base price of less than Sh3 million, all thanks to government policy. We laughed at them when they drove crappy cars because of an almost total ban on car imports. Now their quality has improved so much. By the way, I did not seen any other type of commercial huge lorries other than TATA. If anything, other makes could as well pass as decorations. With this in mind, do you think it time to support things like Mobius?

Interesting that you say you haven’t seen any large trucks outside of the TATA brand. Not even Ashok Leyland over there?

How about Bharat-Benz? Granted, the former may be a collaboration of Ashok Motors and the now-defunct British Leyland of Brexit land, but Ashok Motors is a full-fledged Indian automobile (read heavy commercial) manufacturer just like TATA which made its name collaborating with Mercedes-Benz; which is what the latter — a wholly owned subsidiary — has done to create its own line of trucks in India.

What we have as the new Mitsubishi Fuso over here started life as a Bharat-Benz on the subcontinent, just so you know.

You quite literally answered your own quandary when you said “government policy”, which means you did put a finger on why cars in India are far cheaper than they are in Kenya.

You reckon it’s time we support “things” like Mobius? I think not. Here is why:

India got its car-making start back in 1942 in the form of Hindustan Motors, 60-odd years before Mobius did, but they built (and/or build) largely the same item on a technological scale.

Unlike Mobius, Hindustan did not think of starting from zero as far as cars went, they simply built Dodge-Chrysler cars, being joined by Premier two years later which built Fiats and Mahindra at the end of the Second World War building Jeeps (this is a hint of what Mahindra is famous for in Kenya and explains the origin of that vehicle).

Let me reiterate something. All recent car companies and economies with manufacturing concerns that have found their feet started off building other people’s cars under licence, a move I strongly recommended in two very thorough articles I did for the Business Daily sister publication some years ago.

The Koreans did it; India did it. Even the Chinese did it somewhat by shamelessly ripping off European, Japanese and American designs with crate or licensed engines powering these Xerox-mobiles, and look where China is right now.

The biggest motor vehicle market on Earth, selling more cars within itself in a year than the whole of Europe combined, yet the Europeans are the bleeping inventors of the car as we know it.

I do not know why “we” insist on building our own car from scratch with the deluded notion that our little colonised minds are capable of catching up with a highly motivated people who not only invented the motor vehicle, but have a 130-year head-start on us. That is dreaming.

The second mistake is thinking there is a “we” in the first place. There is no “we”.

The Mobius project is one man’s dream manifested, and he does not have our national interest at heart mostly because he is British, not Kenyan. [Mobius is incorporated in the United Kingdom, for those who understand what this means]

So now, after the three companies started operations in India, a short two years later saw the government of India join hands with private entrepreneurs to establish component manufacturing.

Six years later, there was a restriction on imported cars. India was well on its way to establishing a massive home-grown automotive industry.

Around here, things are a little different in that we are trying to do in 2019 what India did between 1942 and 1953: build cars locally (at least we have the Polo Vivo for starters) and restrict imports.

The import restriction has been met with such hostility that someone somewhere has had to rescind their declaration and find a new way to impose their will on the people.

With such developments, how much hope do you hold for this country and its not-even-embryonic motoring industry?

Along India’s long march to automotive independence were a few stumbling blocks, one of which was the “licence raj”, a combination of bureaucratic nightmares and nationalist and protectionist policies that created a backlog such that demand soon outstripped supply and people had to wait months for delivery of both two- and four-wheeled automobiles.

We have our own version of licence raj over here, in the form of corruption, embezzlement, nepotism, cronyism and “tenderpreneurship” such that any venture that the government might choose to undertake in the quest for a self-contained automotive industry will very likely be soon marred by logjams and artificial shortages to control market dynamics and jack up prices.

We know this. We have seen it before. This idea is dead on arrival to be honest.

The 70s saw the exit of collaboration agreements between local Indian motor companies and their licensers, but the motor companies were given carte blanche to continue manufacturing with new branding, designs that persisted for close to two decades until a very worried government widened the playing field to bring in more manufacturers.

The Delhi Auto Expo was introduced in 1986 to absorb new technologies and germinate local innovation.

Eventually, in 1992, the economy was liberalised to allow multinationals such as Suzuki, Toyota and Hyundai (!) to invest in the market.

Naturally, we have our own version of events. We have our own brands still slogging on with 25-plus year lifespans and refusing to head out to the great junkyard in the sky (Mitsubishi FH and Isuzu N Series), to the undying loyalty and incessant cheers from technologically challenged end users who firmly stick to ideology that was passed on to them by word of mouth from even more technologically challenged predecessors.

We have bus drivers who steadfastly turned down superior OptiCruise transmissions because these are “automatic” and they are men; men should operate manual transmissions; an uprising quickly quelled when the bus operator sent them all back to training camp to rethink their priorities and modernise their beliefs.

We have people who celebrate whenever they hear of Tesla’s latest woes because this means a delay in the inevitable takeover by electric cars.

We have people who believe in the adage: “We don’t need airbags, we die like men.”

My own compatriot in the auto hack business dismissed the new Jimny simply because it has automatic emergency braking, something he thinks “encourages driver ineptitude” (overlooking the fact that it saves thousands of lives).

Our own auto expos are filled with foreign disrupters and unrelated industries, and participation is a murky and slightly prohibitive procedure.

This is the kind of environment in which we are supposed to breed an entire industry. Do you think we will succeed?

There is a lot more to this topic — we haven’t even touched on India’s massive billion-man potential market, its steel industry and the fact that TATA owns Jaguar Land Rover and is trying to get rid of it.

We haven’t even touched on the short and long term prospects for the Indian car industry; interesting outlooks and projections by established financial think tanks such as Forbes, Price Waterhouse and KMPG.

It doesn’t take a genius to realise we are nowhere in the picture as far as comparisons between our industry and India’s goes.

When they called Africa the Dark Continent, it wasn’t for the thickness of its forests. The darkness is in our heads.


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