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in mid-march this year, india’s ministry of commerce and industry suddenly announced a “major benefit” and would provide the most substantial preferential measures to foreign new energy vehicle companies’ investment in india—any imported electric vehicle priced above us$35,000. related manufacturing companies will be able to enjoy a 15% preferential tariff within five years! previously, india imposed a 70% tariff on imported cars priced below $40,000, and 100% tariffs on imported cars priced above $40,000.

such a preferential tax rate must come with conditions: foreign companies applying for a preferential tax rate must commit to investing at least 41.5 billion rupees (about 500 million u.s. dollars at the time) in india and start producing electric vehicles in local factories within three years. , you can get tax benefits. of course, the tariff preferences are also limited. each company can only reduce taxes on 8,000 vehicles per year. a total of 40,000 electric vehicles entering the indian market can be tax reduced in five years.

the indian government seems to be extremely proud of its investment strategy, so much so that it is full of confidence. indian commerce minister piyush goyal, who was responsible for formulating and issuing this measure, passionately declared on a tv program at the end of march that-

picture | piyush goyal, former ministry of energy and current minister of commerce. this company has also recently promoted the revision of india's "coffee act" in order to support domestic coffee cultivation, focusing on a confident

"we invite global businesses to come to india. i believe india will become a global hub for electric vehicle manufacturing, which will create jobs and improve trade."

in the program that day, he further claimed that this move will benefit indian consumers because "they will buy electric vehicles at cheaper prices, and will also help the government achieve its goals of reducing oil imports and foreign exchange outflows."

a new round of "pig killing" is brewing in india

from the very beginning, india’s primary target was anchored on musk’s tesla.

for quite some time, indian politicians, media, and even the majority of netizens have repeatedly talked about various fantasies that tesla will open a factory in india on almost all social media platforms and on all occasions, deducing the indian version of tesla. the scene of the car rolling off the assembly line. in his words, it seemed as if he had already taken advantage of musk's fortune.

this farce continued until the end of april this year. lao ma himself announced in a tweet that he was "busy with work and has no schedule" that his visit to india (to sign an investment agreement) would "definitely happen next time". then he jumped on his business jet and headed straight to beijing.

picture | do you really think musk is easy to fool?

although india is very particular about losing money if it is not deceived when going out, there is no way to deceive people like musk.

lao ma's "broken appointment" once made the "third brother" extremely angry. however, even if a person is not fooled, there is nothing you can do about him, right? but if all this bullshit is blown out, there is no way to attract kaizi to come to the door.

as a result, the indian government mobilized its connections from top to bottom to "cast a wide net." there were rumors at the time that indian companies and local government officials began to contact some domestic car companies in an attempt to attract domestic companies to invest in and build new energy vehicle factories in india.

all this is just like what happened ten years ago after the bharatiya janata party won the election and narendra modi became prime minister, and deceived chinese mobile communication equipment manufacturers to open factories in india.

however, although the third brother’s abacus is sound, the chinese government is not stupid. just in july this year, the ministry of commerce convened a meeting with the heads of more than a dozen car companies to advise these companies not to make any car-related investments in india—manufacturers should not blindly follow trends or believe in investment initiatives from foreign governments.

picture | new energy vehicles are currently the most competitive industry in china and are the core of the manufacturing industry that cannot be missed.

according to sources, turkey was also named at the meeting, and companies are expected to notify the ministry of industry and information technology and the embassy in turkey before planning to invest in the country.

it is believed that this move is intended to once again protect the core technologies of chinese car companies in new energy vehicles, while preventing the investment of domestic companies from being "closed and beaten".

although the officials have good intentions, but speaking from the facts, car companies will hardly be stupid enough to go to india and give away their lives. after all, in early april, saic worked hard to basically protect its investment in india.

starting in 2022, the indian tax department has begun to find trouble with saic's branches in india on the grounds of financial irregularities and other reasons. at this time, saic has been operating in the indian market for more than five years.

picture | saic’s indian production base was acquired through the acquisition of gm’s factories

in early 2017, saic established its vehicle manufacturing base and supporting supplier park in india by acquiring and transforming the halol plant of general motors india ltd. in vadodara, gujarat, india.

saic's entry into the indian market is the baojun 530 model with the mg badge, which is called the mg hector in the indian market. equipped with the i-smart intelligent driving system independently developed by saic, the mg hector has been selling well in the indian market since its launch. it once achieved a record of 31,000 orders within 3 months and a monthly delivery of 7,000 vehicles. by 2023, the mg brand's sales in the indian market will exceed 60,000 vehicles, and the market situation is very good.

picture | mg hector is modified for indian localization based on the baojun 530 model

however, the indian government has never intended to allow foreign companies to make money peacefully. first came a tax audit, then accusations of financial irregularities. in 2023, the rules were directly modified to require foreign car companies not to hold more than 50% of the shares in india.

the farce ended with local steel group jsw acquiring a 35% stake in mg india. at this point, with the 8% stake held by a local investor, 3% owned by dealers and 5% held by employees, saic's shareholding has been diluted to 49%.

fortunately, the total 8% shares held by dealers and employees do not have voting rights. therefore, although saic's shares have been diluted to less than half, it can still actually control the company. jsw also spent 26.51 billion rupees to acquire the equity. with this money plus the profits over the years, saic has managed to preserve its capital and still make some money.

picture | jsw acquires 35% stake in mg india at the signing ceremony

however, after seven years of hard work, we have only been able to maintain capital and "make some money." compared with the treatment enjoyed by saic's joint venture in thailand, this lesson can still be called "bloody." outside of the automotive industry, xiaomi and oppo’s investments in india were also robbed in the past few years. all kinds of lessons are added together. in fact, there is no need for official advice at all. most companies have already regarded india as an investment restricted area.

even if indian customers come to buy goods, it is now normal to pay 80% in advance, and it is not uncommon to ask for payment in advance.

building the automobile industry cannot rely on speculation

the history of the last half century has repeatedly proved that india seems to have noticed the trend every time, but never caught up.

before new energy vehicles, india had also paid attention to the photovoltaic industry, and many states had even launched many favorable policies. but what was the result?

looking forward another ten years, long before the photovoltaic industry broke out, there was the web1.0 and web2.0 era of the internet.

picture | the domestic paper media’s praise of the indian software industry twenty years ago actually verified some of zhang xuefeng’s comments from a historical perspective

at that time, india was highly optimistic and actively launched policies. many friends born in the 1980s should still remember that more than ten or twenty years ago, india’s “software industry” was widely reported by domestic media, and it was claimed that domestic companies should learn from it.

however, today, except for bangalore, which is known as the "silicon valley of india" and has some high-rise buildings in the city center, but at the same time the roads and infrastructure are very poor, the only ones that have flourished in india are global e-mail fraud groups that specifically target english-speaking users. that’s all.

the root cause of this situation lies in the chaotic politics with indian characteristics.

in fact, although we use the expression "wind outlet" here, which seems to be pure luck and opportunity, any "wind outlet" actually does not arise out of thin air, but must sprout on the original material basis.

picture | it took us thirty years to learn how to build a car

this is just like the reason why the new energy automobile industry has become the biggest trend in china because china has already started building its own automobile industry by launching joint venture projects in oems as early as the mid-1980s. and in the next thirty years, we built the entire upstream parts supply system by stacking up the roof, and at the same time launched a grand new energy national subsidy policy in 2011.

it is obvious that, as louis pasteur said, “chance favors only the prepared mind.” the "window" of new energy vehicles has never been waiting for, but has been achieved through years of hard work by china, from the government to the enterprises.

india's chaotic political scene causes its political parties and politicians to often focus on election issues that occur every few years, and inevitably focus on various short-term policies that can quickly attract votes and win elections. in this era when the global market is stagnant and the country's upward path is almost closed, the political status quo of late-developing countries is ultimately not so much about leaving the country's mid- to long-term development to the market or capital, but rather as leaving it to fate.

in this development environment, only a country like the united states, with its vast territory, abundant resources, and diversified industries, can take advantage of the development opportunities of different trends. supplemented by the flexible short-term policies of the multi-party government, it can quickly be transformed into industrial policies of the mainstream and usher in economic development. , such as the internet economy.

picture | in late 2021, ford terminated a cooperation with mahindra after reviewing local conditions. india's automobile manufacturing capacity is roughly the same as china's state 25 years ago.

in fact, the bharatiya janata party government has had a fairly clear understanding of its current situation since it came to power. however, neither prime minister modi nor other politicians of the ppp can completely reverse the status quo. in turn, the country's economic non-virtuous cycle problems caused by trade imbalances have further reduced its room for maneuver. in the end, we can only rely on this kind of deception and abduction-like "pig-killing plate" model, which is also a realistic helplessness.

as of the second half of 2024, the so-called global new energy vehicle trend has basically ended. most of the dividends dispersed during the historical transition period have been eaten up by chinese and american companies. as for the part we already have in our hands, as long as companies don’t get carried away because of short-term gains, no one can take it away from us.

however, modern companies that are only loyal to financial reports will eventually be tempted by short-term interests. especially at this time, the price war in the domestic market has reached fever pitch. therefore, at this critical moment, the official announcement serves as a critical breakwater.

as mentioned above, india is not only the largest geopolitical rival among the neighboring countries that border our country, but does not even bother to hide its ambitions for our country’s territory and even its economic status. its own economic characteristics also determine that this country is highly selective in investment. risk.

in addition to this obvious "pit", at this stage, when domestic car companies are making overseas deployments, what other countries do they need to be wary of?

in addition to türkiye, which was officially mentioned above, there is actually a new investment hotspot that has attracted much attention from domestic companies in the past two years - russia. here, let’s talk about turkey first.

picture | the turkish automobile industry is not blank. the picture shows the hyundai group’s assembly plant in türkiye.

as we all know, although türkiye is a member of nato, it is a well-known "alien". so much so that not long ago, the country was fired from the "f-35 project" because it was too close to russia, nato's largest rival. in addition, in the past two years, there have been news that the country intends to join the "brics".

in the past two years, türkiye has been actively seeking to establish a new energy automobile industry in the country and has provided relatively generous policies to overseas automobile companies. however, while providing sweeteners, companies applying to invest in and build car factories in turkey are also required to establish supply chains in turkey, and the finished cars produced must purchase a certain proportion of turkish parts.

however, no matter how stalemate it seems to be with europe and the united states, although it was kicked out of the "f-35 project", it still remains in the nato military organization. in addition, the country has not given up its intention to join the european union.

in view of its special geographical environment at the intersection of three continents, europe, asia and africa, and the fact that the country’s current government has repeatedly jumped between various forces in the past two decades to seek the greatest interests for the country, the risks of investing in this country are also high. obviously on the high side.

picture | similar to indian prime minister modi, turkish prime minister erdogan is also a politician who has been in power for a long time and is good at playing "horizontal jumps" and taking shortcuts.

investment in turkey should be highly cautious, even to the same level of "vigilance" towards india.

as for russia, due to reasons that are well known at present, the country has become an investment hot spot for chinese companies since the beginning of 2022. so much so that some people joked that the long-term goal of revitalizing northeast china was achieved through trade with russia.

regarding the issue of domestic car companies developing in russia, the commune has systematically elaborated on it in many articles before. here we will only talk about the risks.

first of all, although russia is now declining compared to its heyday, it is still a great power.

although some people on the domestic internet ridicule russia's economy, saying that it is only slightly larger than the size of guangdong province. however, anyone with common sense should know the size of guangdong province's population and economy. in fact, russia's population is slightly more than guangdong's, with 17 million people, reaching a scale of 144 million.

although such a country is destined to be unable to reproduce the glory of the soviet era, it has never given up the mentality of a great power. therefore, it also has plans for the automobile manufacturing industry, which has special significance.

figure | before 2022, european, japanese and korean car companies also have considerable investment in russia

at this stage, coordinating with chinese car companies to take over the russian factories that european, japanese and korean car companies originally abandoned is only a temporary solution. if there is a possibility of relief in the future, new conditions will definitely be added.

of course, if it is just additional conditions, then it is nothing more than making profits for domestic enterprises and the manufacturing system, and everything is negotiable. the risk for domestic car companies to invest in russia is that russia may fail in the russia-ukraine conflict, although the possibility is very low.

once this situation occurs, russia will either face a major chaos in the country, or the current government will collapse and a group of politicians who will fully shift to europe and the united states will take power. if this happens, there is no need for me to be alarmist about what kind of situation domestic car companies will face when investing in russia.

picture | a large number of chinese cars will be exported to russia after 2022, which will fundamentally change the image of chinese products in russia’s field of vision.

but what needs to be emphasized here is that this does not mean to express opposition to investment in russia. after all, its market openness and expected benefits have proven to be very impressive in the past two years, and the risks are significantly lower than those in countries such as india and turkey. what's more, the russians are not fools. the recent bombing of bp machines and walkie-talkies in lebanon has fully demonstrated the high security of chinese companies and products in the current global supply chain system.

picture | this world has long been changed beyond recognition.

the concern here is nothing more than how to maximize the interests of our country and our companies while trying to avoid being actually tied up by russia.

all in all, when it comes to overseas investments in overweight assets such as automobile manufacturing, the minimum attitude is to be cautious. but while being cautious, it is equally important to grasp the degree and quantity. after all, the timeline of this world has reached 2024. investment and going overseas are both necessary.

in the current environment, every step of chinese car companies' overseas expansion will not be "easy".

author: zha youyin, editor: li sijia, editor: he zengrong