8/8/2019 Globalization - China vs India

http://slidepdf.com/reader/full/globalization-china-vs-india 1/2

Globalization: China and India: contrasting styles

- Avik Chattopadhyay 

Sometime back, I read an editorial by Dave Leggett of Just Auto about theChinese automobile brand Chery exploring a manufacturing set-up in theCatalan region of Spain.

Very thought provoking. Especially as some of the world’s emergingeconomies, read China, India, Brazil etc. globalise, there is always this debateabout which strategy to use – globalise through fresh projects, or throughacquisitions or, go for a mix.

As an observer of both Chinese and Indian automotive brands going 'global', Isee striking dissimilarities in their respective strategies.

The “automobile” is one of the most potent symbols of national pride as wellas neo-colonialism. Almost every nation dreams of its ‘national’ car, as if otherwise its people would not drive any other vehicle. And, exporting your car to other countries is implied as a symbol of superiority and a subtle form of creating modern colonies. Maybe the motorcar being such a high involvementproduct leads to such mind games that we cannot wish away.

This holds greater relevance as we Indians have an obsession with China. Beit from doing down Chinese goods, imposing import barriers on them toprotect our industry, to claiming at any available platform that we are ‘different’and thereby better than China.

The Chinese have clearly chosen the primary route of globalizing through‘fresh projects’. Not that they do not acquire other firms and businesses[remember IBM and Lenovo], but then setting up a green-field is their corestrategy. They have clearly understood that an automobile / automotivecomponent plant is more than just automobiles / components. It is a socio-economic-political investment that China makes in that part of the world. It is agreen-field project, ensuring lots of employment both during and post set-up.Then you employ people in the plant, in the ancillaries, in the ecosystemaround the place, in the new malls that come up, in the new schools, hospitalsand training institutes. There is a ‘positive’ part of China that is planted in thatregion and allowed to blossom and bear fruit. This is truly long term. Trulygeo-political. And socio-cultural. Hence, if the Chery plant comes upsomewhere close to Barcelona, there will be a little bit of China implanted inthat part of the world.

In Namibia, in late 2009, there were already close to 300,000 Chineseworking in co-creating the country’s infrastructure. So, while a Chinese firmwas working with the government on a bridge project in the south of thecountry, another was employing hundreds of Namibians in the north to buildbricks for the same!

Indian automotive companies have a completely different take onglobalisation I feel. Their take is primarily the acquisition route. Buy the soft

8/8/2019 Globalization - China vs India

http://slidepdf.com/reader/full/globalization-china-vs-india 2/2

targets. That is easiest and quickest to gain a footprint, enhance notionalmarket share and 'group' turnover. The easiest way of technology transfer /exchange, cost efficiencies emerging from scale and getting into newmarkets. Basically a cautious approach. With the subliminal fear of failure.Finding safety cushions in existing set-ups, however inefficient, complex and

mis-aligned they may be. And, then again, also driven by the typical Indianego of “owning” a foreign brand, an outcome of the colonial trauma. But Iguess the Indian corporates cannot be solely blamed for this. The governmentand industry bodies have no idea of how having a long-term strategy onglobalization will actually help. The government, as it always does when indoubt, rests its faith in India's great democratic tradition to allow the country,its citizen, its industry and economy to progress. It is due to this complete lackof collaboration and co-creation of the globalisation strategy between theindustry and the government that leads to such short-term sub-optimalmeasures being adopted by the corporates.

And why are these measures sub-optimal? First, acquisitions have their own"integration" issues that, quite frankly, are never sorted out. The initialeuphoria of ‘trophy’ acquisitions soon leads to cultural chasms over the ‘ruler’and the ‘ruled’ ending in a substantial amount of collateral damage. Second,there is this obvious lost opportunity in creating a truly global Indian product or service brand. We have some formidable corporate brands like the Tatas andMittals, but no real product brand. In fact, as recently as 2004, the Tata Indicawas sold in Europe as the City Rover [beats me!!]. Third and most pertinent,the world does not really get to understand, experience and appreciate "India"as an idea, a way of life and a mindset. One may argue that India is bestunderstood through its dance, cuisine, music, art, films and fabric, but to me

that is just one part of India. It does not cover the industrial and socio-economic India, the India that once had invented an iron alloy that wouldnever rust for more than 2000 years, or the India that has been the original‘melting pot’ of the world! And that is a huge opportunity lost.

Is it? Let me know what you think about it. Cheers.