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Detroit. China and India could reshape the global motor-vehicle industry and pose a significant competitive threat in coming years, executives from the world’s top carmakers said at the Detroit motor show.

“They are a very credible threat and we discount anyone at our peril,” John Mendel, the vice president in charge of sales at American Honda Motor, said.

While the globally competitive nature of the industry requires mass economies of scale, the relatively young Chinese and Indian manufacturers are ramping up quickly, Mendel said.

And the Chinese motor-vehicle manufacturers buying brands like Hummer and Volvo are gaining access to a valuable distribution network, critical technology and “instant credibility,” he said.

India’s Tata Motors will take its opening shot at the US market today, when it brings the Nano minicar to the exposition center to show Motor City what the world’s cheapest car looks like.

Build Your Dreams Motor brought its four-door electric e6 straight to the floor of the show where it vowed to become the first Chinese motor-vehicle manufacturer to enter the United States at the end of this year.

Meanwhile, both countries are becoming increasingly important markets in the global sales strategy of top motor-vehicle manufacturers with China surpassing the United States in total sales volume last year and Indian sales expected to double by 2016.

Toyota’s chief of US automotive operations expressed skepticism that either BYD or Tata would make a significant mark here in the short term.

“It’s not so easy to come walking into a market and develop a product and distribution network,” Don Esmond said.

Cost will be a key driver in the coming years and China and India will offer carmakers an important testing ground for pushing the boundaries, Carlos Tavares, Nissan’s vice president in charge of the Americas, said.

Ford CEO Alan Mulally said that while China would be a future force and India was not too far behind, the real competitive threat could come from unfair trade practices.

“We expect the auto world industry to continue to evolve,” Mulally said. “There is no reason that if we get to global trade rules that we can’t compete with the best of the world.”

But the lack of flexibility inherent in a massive and decades-old company like Ford, could give their younger and more innovative rivals a leg up, Warren Harris, president of automotive engineering consulting company Tata Technologies, said.

“Just the willingness to innovate in and around the value chain; this is where the Chinese and the Indian original equipment manufacturers are going to have an advantage,” Harris said. His team helped develop Tata Motor’s Nano and works with major motor-vehicle manufacturers and suppliers.

“If you look at the American manufacturers, they have the technical know-how and the distribution networks that would be the envy of the Chinese and Indians,” Harris said. “But if they’re not going to match the Chinese and Indians for innovation then that advantage isn’t enough.”



Agence France-Presse