Chinese firms join race to supply locos to Railways

[Hafizzz]

Chinese firms join race to supply locos to Railways | Business Line

New Delhi, Oct. 6:

Two Chinese firms — CSR Corporation and CNR Corporation — have created a flutter by bidding for a share of the Indian Railways’ locomotive market.

Both these have bid for setting up two locomotive factories — electric and diesel — in India to supply about 1,800 locomotives to the Railways over 11 years. These two tenders are valued at about Rs 35,000 crore over a 10-11-year period, according to industry estimates.

Now, all eyes are on whether the Chinese firms qualify technically to submit financial bids for the project, as that may set the stage for a more competitive price bids, say sector experts.

Traditionally, American and European firms have been key suppliers of high-tech products in locomotives for the Indian Railways. For the proposed electric locomotive factory to be set up at Madhepura, Bihar, apart from the two Chinese firms, bidders include American firm GE Global, and European firms Bombardier, Siemens and Alstom. Similarly, for the diesel locomotive factory in Marhowra, Bihar, bidders include American firms GE, EMD, apart from CSR and CNR.

Indian Railways is one of the largest markets globally. For EMD, India is one of the top markets after North America, William P Ainsworth, President and CEO, Electro-Motive Diesel and Progress Rail Services, told Business Line.

“Traditionally, European firms have been key suppliers in electric-traction-based rail technology while American firms have had strength in diesel-traction.

“They developed such strength based on the geographical requirement. Europe has a high-speed passenger network, which runs on electric traction. The US, Canada have large rail freight networks, used for heavy cargo movement that use diesel,” said Niraj Kumar, former Director-General, Indian Railways.

That said, the Chinese firms have also become large players by virtue of a large domestic market in China and are looking for business in other markets. “The rail equipment localisation plan of Chinese Railways was linked to the number of locomotives bought from the Western loco suppliers,” said Kumar.

“CNR has 28 per cent share in electric locomotive and 13 per cent in diesel locomotive globally, according to data of German consulting firm SCI. We have supplied diesel locomotives to countries such as New Zealand, Malaysia, Nigeria, Tanzania, Angola and Cuba,” Yang Xiongjing, Division Chief-Comprehensive Department, CNR Import and Export Corporation, told Business Line.

Now, for the two loco factory tenders, even though the Railways has not yet short-listed the firms, experts agree that the Chinese participation will lead to strong pricing pressure.

“There will surely be greater pricing competition if the Chinese firms were to participate. Though the company that wins the project will have to operate in India with Indian workers, the back-office costs of Chinese firms are bound to be lower,” said Kumar.

 

[Hafizzz]

India is USING China to lower the price from the Western Suppliers.

India will never let China get the contract to supply the Indians with Locos so why is China so stupid in letting India use her ????

 

[MULUBJA]

All participation are well come. But quality is going to remain a big issue in Chinese products.

 

[Genesis]

India is USING China to lower the price from the Western Suppliers.

India will never let China get the contract to supply the Indians with Locos so why is China so stupid in letting India use her ????

So that the Western firms will not earn as much? So that we would participate in everything? Just to troll the West, they want to make a living making trains? Nope, we will troll them by lowering the price so much that they lose. lol

@MULUBJA

really, still on the quality thing.

We can build space stations, and man space flight, have the largest train network. Other than the one incident that happened, btw all nations have accidents, spain more recently, we are below the Indian standard?

I know insulting Chinese products is like a hobby, but at least get some facts straight.

 

[Hafizzz]

So that the Western firms will not earn as much? So that we would participate in everything? Just to troll the West, they want to make a living making trains? Nope, we will troll them by lowering the price so much that they lose. lol

@MULUBJA

really, still on the quality thing.

We can build space stations, and man space flight, have the largest train network. Other than the one incident that happened, btw all nations have accidents, spain more recently, we are below the Indian standard?

I know insulting Chinese products is like a hobby, but at least get some facts straight.

Frankly speaking, Indians can't even make what China produces and yet they make fun of the Chinese ! Indians are funny

All participation are well come. But quality is going to remain a big issue in Chinese products.

Why don't you admit that India discriminates China ?

I have a link below that shows India discriminates Chinese companies :

Bardhan to Centre: End prejudice against Chinese companies
http://www.indianexpress.com/news/bardhan-to-centre-end-prejudice-against-chinese-companies/13995/

 

[MULUBJA]

So that the Western firms will not earn as much? So that we would participate in everything? Just to troll the West, they want to make a living making trains? Nope, we will troll them by lowering the price so much that they lose. lol

@MULUBJA


really, still on the quality thing.

We can build space stations, and man space flight, have the largest train network. Other than the one incident that happened, btw all nations have accidents, spain more recently, we are below the Indian standard?

I know insulting Chinese products is like a hobby, but at least get some facts straight.

That everything we do also. I am talking about general perception of Chinese goods in International market. I did not have anything about any Chinese accident in my mind when I wrote that comment. I do not know why you guys assume so much and do not talk point to point. I Started my post with well coming the Chinese participation man.

 

[MULUBJA]

Frankly speaking, Indians can't even make what China produces and yet they make fun of the Chinese ! Indians are funny



Why don't you admit that India discriminates China ?

I have a link below that shows India discriminates Chinese companies :

Bardhan to Centre: End prejudice against Chinese companies
Bardhan to Centre: End prejudice against Chinese companies - Indian Express

Bardhan is communist so he often talks BS. Our trade with China is reaching $100bn. Where is the Discrimination. Chinese Goods are substandard that is a fact. Yesterday I went to buy a small table for my brother. The shop keeper said if you have a child in your house, Do not buy Chinese table. It will not last for more than couple of months. Many who have buy it looking at its appearance are repenting now. I show many band pipes of chinese tables in show room. I think that Chinese goods is considered as substandard in Pakistan also. Why do you advocate otherwise which is known to all.

 

[Hafizzz]

Bardhan is communist so he often talks BS. Our trade with China is reaching $100bn. Where is the Discrimination. Chinese Goods are substandard that is a fact. Yesterday I went to buy a small table for my brother. The shop keeper said if you have a child in your house, Do not buy Chinese table. It will not last for more than couple of months. Many who have buy it looking at its appearance are repenting now. I show many band pipes of chinese tables in show room. I think that Chinese goods is considered as substandard in Pakistan also. Why do you advocate otherwise which is known to all.

Like I said, You get what you paid for.

You want good quality products then you have to pay the price for good quality products.
If you are only willing to spend PENNIES but want top quality products then you will hit the wall.

 

[dray]

Upfront cost of Chinese products maybe low, but recurring cost is much higher because of the questionable quality. Chinese locos faced serious quality issues in many countries, a simple google search will reveal that. (Pakistanis learned it the hard way). We should be very cautious and take into account all factors before deciding on this.

God save the Indian Railways!!

 

[Hafizzz]

Upfront cost of Chinese products maybe low, but recurring cost is much higher because of the questionable quality. Chinese locos faced serious quality issues in many countries, a simple google search will reveal that. (Pakistanis learned it the hard way). We should be very cautious and take into account all factors before deciding on this.

God save the Indian Railways!!

How Ironic, huh !

On one hand Indians complain that Chinese products are "inferior" but on the other hand they invite Chinese firms to help them lower the bidding price !

 

[MULUBJA]

Like I said, You get what you paid for.

You want good quality products then you have to pay the price for good quality products.
If you are only willing to spend PENNIES but want top quality products then you will hit the wall.

I went to market with a willingness to pay price but i didn't find any Chinese product worth paying the it.

How Ironic, huh !

On one hand Indians complain that Chinese products are "inferior" but on the other hand they invite Chinese firms to help them lower the bidding price !

No body was invited. It is an open tender. Even Pakistani Company can Bid it. Quality assessment will be there first. If it pass in quality test, price part will follow subsequently.

 

[Fattyacids]

Upfront cost of Chinese products maybe low, but recurring cost is much higher because of the questionable quality. Chinese locos faced serious quality issues in many countries, a simple google search will reveal that. (Pakistanis learned it the hard way). We should be very cautious and take into account all factors before deciding on this.

God save the Indian Railways!!

Don't talk so fast.
http://www.defence.pk/forums/econom...ting-case-chinese-lococomotives-pakistan.html

 

[Hafizzz]

All participation are well come. But quality is going to remain a big issue in Chinese products.

Sad but true: Many Indian brands do not prefer being called Indian
Sad but true: Many Indian brands do not prefer being called Indian [maybe lessons for Indian startups?] : NextBigWhat.com

For a brand, an image of quality and credibility is an extremely important asset and a key factor in a company’s profitability and growth. In India, where locally produced brands are often seen as inferior, businesses consciously choose to build a “fake” foreign image for themselves. An abundance of foreign-sounding goods available at any high-end Indian mall makes it look as if India doesn’t manufacture any consumer goods of its own. But is it really the case or merely a well-planned illusion?

Here’s a fact: if given a choice, an Indian consumer will buy a foreign brand instead of a domestic one. At its most basic level, this preference is sparked by prejudices against an Indian brand name, even though there is no valid reason to justify this bias. That’s exactly what foreign branding is – the intention of certain brands to project themselves as foreign-based, so as to ensure they profit from this “foreignphilia.”

As the East and West created images of each other’s cultures, at some stage the East (or the emerging countries) deemed the West superior. It would be safe to assume that this phenomenon has something to do with the Indian tendency to gravitate towards everything foreign, and western goods are automatically equated to better products.

However, a lot of consumers in India are unaware that many popular, foreign-sounding brands are really Indian: Koutons, Monte Carlo, La Opala, Franco Leone, and Da Milano, to mention just a few among many, are of Indian origins. In some cases, the owners made a conscious choice of adopting a foreign name, while others “inherited” the name when they acquired a foreign brand. The fact that many of these brands– even the Italian-sounding ones like Monte Carlo and Da Milano – come from India is intentionally obliterated.

It is unlikely that this attitude will change anytime soon. “The trend will gather momentum,” says Piyush Kumar Sinha, Professor in retailing and marketing at the prestigious Indian Institute of Management in Ahmedabad. He predicts that Indian brands will try to look and sound foreign to play into the local population’s aspirations for foreign-label merchandise.

To be fair, the fascination with foreign-sounding products is not exclusive to India.

Look at Häagen Dazs, the popular ice cream brand whose name conjures up Scandinavian origins. However, this product was first manufactured in the Bronx, N.Y, and its name doesn’t mean anything in any of the Scandinavian (or other) languages, so the concept of foreign branding is alive and well in many parts of the world, where the preference for new and different products is rampant. That’s why many local brands are “baptized” with Italian, German, or French names, creating an illusion of exotic origins.

And the name is just the beginning of the carefully crafted illusions (some would even call it deceptions). These companies hire foreign models to showcase their collections, which is why there are so many foreign models in India. After all, it is easier to perpetuate a pre-conceived notion of a foreign brand if foreign models are showcasing it. Brands like Duke, for instance, have been hiring foreign models for their collection because these models “help create an international feel for the brand,” an image that an Indian model would not be able to project.

Fortunately for the companies, hiring an overseas model is not difficult. Many of them come to India as tourists and charge between 20,000 and 40,000 rupees ($36o – $720) for a day’s shoot, while a famous Indian personality would charge a lot more.

Ad agencies that provide brands with foreign models concede that a number of them are tourists and don’t have work permits. They get away with these assignments because there are no stringent checks within the modeling industry. This mostly happens in the case of mid-tier, small-budget brands. Some companies have actual statistics suggesting that hiring overseas models proved fruitful and has improved their sales tremendously. Cotton County, for example, faced declining sales, which were revived once they brought in foreign models. It cannot be merely coincidental that profitable Grasim brands like Van Heusen, Louis Phillipe, and Allen Solly have never hired Indian models.

Some firms have gone as far as to fall for their own act. A brand by the name of Munich Polo, that sashays itself as German, chose to design its site in the same fashion – so much so that its website talks about German culture and the German city of Munich, completely erasing all signs of its Indian origins. Similarly, brands like Woodland have succeeded in projecting themselves as a foreign brand. Launched by Aero industries, Woodland now has all but lost its original roots. It is easy to see that the impetus behind a brand image construction like that of Woodland’s owes a lot to other foreign brands like Timberland, which are massively successful. From its merchandise to its use of foreign models, it is hard to see Woodland for what it really is – an Indian company. The Woodland site terms itself as Woodland International, even though it ships products only within India. Therefore, the conscious effort to create a foreign image is embedded in even the smallest details.

This trend is not limited only to adult brands, but also to many children’s brands like Lilliput, and Gini and Jony. In reality, Gini and Jony is a product of Pakistan-based Lakhani Brothers, while Lilliput was founded by an Indian businessman, Sanjeev Narula. These brands also use foreign kids as models and project their merchandise as if it were manufactured in America or England. The new emergent middle class falls for the illusion and participates in this conscious manipulation of the Indian psyche.

The next logical question is why Indian brands pretend they are foreign when they are clearly not? It is not as if local brands like Fabindia are not equally popular. It cannot be denied that these pseudo-foreign companies are exploiting the Indian mentality, which, as stated above, perceives foreign goods as superior. Therefore, the projection of a certain brand as originating from abroad justifies higher prices.

Though this technique seems to be very effective, there is no reason for it to continue. It must be very frustrating for Indian companies to know that so many consumers do not give native products a fair chance. But at the same time, the brand image does very little if the actual products do not provide the high quality expected of imported goods. If a local company chooses to market its merchandise under a foreign alias, it has to ensure that its products look, feel, and last as long as the imported ones, otherwise it’ll be taking advantage of gullible consumers.

So the next time you step into a mall, make note of the brands you go for. You might be surprised to note that many of the ones you choose are actually Indian brands and that is proof enough of the need to recognize the potential in the indigenous market, and not to fall for the same prejudices again and again. Who knows? Maybe your next visit to a mall would be to a truly Indian one!

What about your startup? Are you ‘faking’ it? Is it really mandatory in India to get accepted and charge the ‘right’ pricing?

 

[Jade]

Greater competition is good for the end consumer...in this case India

 

[MULUBJA]

@HafizzzDo not try to divert discussion in wrong direction. I can post Numbers of link like this for Chines and Pakistani products. Not only that but Chines try to sell their product as Indian one. Pakistanis try to recognize themselves as Indians. Are you ready to accept that if I post the link?

Let the thread remain clean.