It is Chinese truck-makers such as Foton, JMC and FAW who have managed to grow their market share in a difficult period. Foton, for instance has doubled its monthly volumes in two years – increasing its share from 4.9% to 7.4% in light trucks market in the process. Chinese players now have a 20% share in this segment, from barely 5% two years back.
What more, the Chinese players could smell an opportunity here. Vijay Kakade, director at Automotive & Transportation Practice,Frost and Sullivan, said, “India always holds a strategic position with Sri Lanka. However, lately, huge investments were made by Chinese majors in Sri Lanka which has facilitated them in drawing Sri Lankan governments as well consumers’ attention. In our opinion, in the longer run it will also help in generating further preference towards Chinese products as compared to offerings of Indian majors.”
Kumar Kandaswami, senior director at Deloitte Touche Tohmatsu India, agreed. “China and Sri Lanka seem to have a good relationship at the governmental level and that would play a part in the markets being opened.”
However, Murtaza Jafferjee, managing director at Colombo-based brokerage firm JB Securities, refused to buy the argument. On the contrary, he blamed the economic slowdown in Sri Lanka and higher borrowing cost. “Also there was lot of repossessed vehicles on sale, which brought down the new vehicle sales. Indian brands will still continue to dominate the medium and heavy trucks market here.”