How China and India will drive us into the future.

It’s common these days to see both auto industry prognosticators and executives go weak in the knees when they talk about China and India. These potential supereconomies may or may not be poised to dominate the globe for the next 100 years, stealing thunder from the United States and Europe. But they’re definitely the last two immense, untapped car markets.

Unlike the United States and Europe, which have auto industries so mature that they’ve been showing their age for a while now (as the General Motors (MTLQQ) and Chrysler bankruptcies proved), China’s and India’s automakers are only just coming into their own. However, the business environment in each country is different, and this has meant that China and India have taken distinct approaches to developing and defining their respective car markets. There may not be a “winner” and a “loser,” but the way that each country cultivates its homegrown sector will influence how the developing world drives for generations.

Those markets are vast, because most Chinese (population 1.35 billion) and Indians (population 1.2 billion) don’t own cars. But as each country’s economy grows—and their annual growth rates are impressive, 8 percent and 6 percent to 8 percent respectively—an affluent middle class will emerge, and these people will want to upgrade their wheels. Now, they ride bicycles, mopeds, and motor scooters. Or walk! In the future, they’ll want four-wheeled mobility, with windows and roofs. 

The way that mobility is delivered, however, will vary greatly. China’s auto industry has more of a Wild West feel, even though it benefits from state support and management. (For example, when an obscure heavy manufacturing firm decided to buy Hummer from General Motors earlier this year, it found itself squeezed between the Communist government and a more business-friendly Ministry of Commerce). There are numerous companies, all positioning themselves to sell cars not just to Chinese but to export them to foreign markets, including the United States and Europe. China is also placing significant bets on batteries for a looming generation of all-electric vehicles. BYD is a Chinese battery maker that has effectively converted itself into an automaker. Warren Buffett is an investor, and the company has ambitiously pledged to overtake Toyota globally by 2025. 

India, by contrast, has fewer carmakers, and many of these are producing vehicle designs left over from British colonial days, trucks and buses, or copies of European cars. (If you think about it, this all makes sense—although India has the world’s ninth largest auto industry, it has not had a lot of customers to sell personal cars to and as a result has specialized in mass-transit, freight transport, and vintage taxi cabs.) But India does have a single automaker—and a single automobile—that has captured the imagination of the world: Tata Motors, which earlier this year unveiled its Nano “People’s Car,” the world’s cheapest set of wheels, selling for $3,000.

You can consider this distinction in carmaking cultures in terms of philosopher Isaiah Berlin’s famous comparison of the hedgehog and the fox: The hedgehog defines things through a single idea, whereas the fox considers the world through a broad range of ideas. India’s car business, obviously, is the hedgehog; China’s is the fox.