After the whimper, the big bang

Car makers hope to excite dull market with 70 new launches at next week’s auto fair

After being in slow gear for so long, car companies are looking to rev up speed, comeFebruary 7 when the biennial Auto Expo opens in New Delhi. In the hope that the biggest spectacle in the Indian automobile sector will help revive its flagging fortunes, the industry plans to unveil 70 new vehicles, out of which 26 will be global unveilings, and 15 of them, cars.

This, at a time, when auto analysts say domestic car sales in 2013-14 will likely be 1-3 per cent lower than or more or less the same as the previous financial year. When the final data comes in, they may show that the slump has hit not only sales of the bestseller small car, but also of the highly coveted sports utility vehicles as well. Domestic car sales dropped by 6.7 per cent in 2012-13 to 1.9 million, the first yearly decline in a decade. The industry lobby Siam (Society of Indian Automobile Manufacturers) fears an encore this year too, though in April it had forecast a 3.5 per cent growth. Car sales declined continuously in the first nine months of this year and the remaining quarter of Jan-March does not hold much hope.

However, major auto players say the manufacturers’ commitment to the market to bring in new vehicles and latest technologies will expand the pie, engage customers, create excitement and boost sales in a tough market.

“When companies announce global launches, they bring in new choices with new technologies, create a big buzz and generate demand for vehicles although there is a downturn,” Siam director general Vishnu Mathur told Financial Chronicle. He said a host of new models, besides continuing to fuel buyer interest, would also expand the market, which is already one of the largest in Asia.

The Indian auto industry has been reeling under a prolonged slowdown with annual car sales dropping for the first time in 11 years in 2013, posting a 9.59 per cent dip. Which is why the industry has a lot riding on the expo and hopes it will generate a positive sentiment this year. “With a new government in place after the general election, we expect both the commercial vehicles and the passenger cars segments to pick up sales momentum,” Mathur said.

“New launches are one way to expand the market and start engaging customers despite sluggish sales,” said Mayank Pareek, chief operating officer, marketing and sales at Maruti Suzuki India, India’s largest car maker by sales. His own company is unleashing a slew of new cars at the expo, as it believes that when the economy improves, car sales will also grow.

Agrees Rakesh Srivastava, senior vice president, sales & marketing at Hyundai Motor, who believes that showcasing new products with new technologies basically shows the commitment of the manufacturers towards their customers. Hyundai Motor will be globally unveiling its all-new compact sedan on a new platform along with a premium SUV, the new Santa Fe. These would be available in the market this year, Srivastava said. “Besides, we will also showcase a few concept cars to gauge customers interest,” he added.

“There is difference between launch, showcase and unveiling of products. Actually, there will be about 20 new product launches and the rest of the concept vehicles will be more than three years away and some may come or may not come at all,” said P Balendran, vice president at General Motors. His own company will be showcasing a facelift of the Beat model and unveil a concept compact SUV, he said.

Ankush Arora, senior vice president and head commercial passenger vehicle business unit of Tata Motors, while agreeing that new launches drive sales when the market is slow, also felt that they set fresh benchmarks causing cost pressure and competition to increase. “So although the sector is witnessing a slowdown, new launches will help companies improve their sales,” he said. Tata Motors plans to unveil two new products at the expo.

Pravin Shah, chief executive automotive at Mahindra & Mahindra, said his company would be showcasing the future of technology and electric vehicles. Also, certain products of SsangYong will also be launched.

Shah said that auto manufacturers are focusing on a significant number of launches thinking about the future demand. “Although in the near-term the auto sector is under stress, but going forward there is huge potential,” he said. Investment in auto sector is always done on a long-term basis and like all businesses, this is also a cyclical one, he said.

Nissan Motor will go aggressive on launches with a range of models for the Indian market. Besides the refreshed Sunny sedan, Nissan will also launch the Friend-Me concept car. Friend-Me combines sporty and dynamic new design features with a cabin that showcases Nissan's latest vision of in-car technology and entertainment.

Nissan will also display the championship winning GT-R GT500 that competes in Japan’s coveted Super GT Series in the GT500 class. Nissan’s Terrano compact SUV will be present in an accessorised version. The Evalia MUV will be displayed with new improved features, adding to its standard equipment list. Other models from Nissan’s current Indian line-up, including Micra Active and new Micra hatchbacks as well as Sunny sedan will be on show too.

Datsun will also stage the world premiere of its first new concept car since the return of the brand. Additionally, Datsun will show the Datsun GO+ seven-seater for the first time in India.

On the motorcycles front, Harley Davidson will unveil the Street 750 bike, new models and concepts bikes from Hero MotoCorp, also Honda CBR500R which is ready, will be on display, as well as UM Motorcycles, which is all set to foray into the Indian motorcycle market with its innovative bikes.

''This is the biggest show for automobiles. It may or may not stabilise the growth of the auto industry, but it will protect it from any negative growth,” said Atul Gupta, executive vice-president at Suzuki Motorcycle India.

When asked about hybrid motorcycles and scooters, which are slated to be a major attraction this year, he said hybrid two wheelers were not practical in the Indian market. “We are becoming a global customer and such a long product line-up will not only help the struggling auto industry, but will provide a large variety and technology to Indian customers,'' Vimal Sumbly, managing director at Triumph Motorcycles India, said.

DSK Hyosung will launch the new Hyosung Aquila 250, while big players like Yamaha, Suzuki, Hero and Honda, as well as premium bikes makers, Triumph, Harley and Kawasaki, will be the biggest competition for debutantes.

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