Auto Expo 2014: Auto companies lineup 69 model launches and 15 global unveilings
You'd expect Vishnu Mathur's mood to reflect that of the Indian auto sector — downbeat, what with the industry in the midst of an agonizing slowdown, and sales dipping in the April-December period over a year ago.
Yet, the director general of SIAM, the apex auto industry body, has been full of beans and on the go in the past two weeks, with a schedule so frenetic that it belies the sector's downturn.
For starters, Mathur has temporarily moved office from the India Habitat Centre in the heart of Delhi to Greater Noida on the outskirts. Except for the receptionist, his 30-odd staff too has accompanied him. Their days are hectic, starting at 8.30 am and they aren't home before 10 pm. "It will get worse from next week. We may not be able to go home," Mathur says, and you wonder whether he's pleased or distressed by that thought.
As SIAM's boss, Mathur is steering India's once-in-two-years auto show, to be held from February 6-12, for the first time in Greater Noida. Appointed in 2010 summer as director general, this is Mathur's second auto show, which is the Rs144,000-crore auto industry's biggest shindig. Understandably, a lot is at stake for him — and the sector.
Going by the early signs, Mathur may have a lot to cheer. This could perhaps be the biggest auto show in India's history. With over 47 vehicle manufacturers (2012 saw under 40), 69 model launches (58 in 2012) and 15 global unveilings, it promises to have the petrol (and diesel) heads drooling.
The new venue, India Expo Centre, is also bigger — the covered area has gone up from 44,000 sq m in 2012 to 64,000 sq m. "This will be one of the most watched auto shows in India," says Deepesh Rathore, founder, EMMAAA, an auto consultancy.
Yet, barely a month ago, Mathur reflected a very different mood. For some time now, the industry has been reeling under slowing sales. December was one of the worst months. "The decline in annual cars sales [almost 10%] that we witnessed in 2013 was the first we have seen after 2002," a grim Mathur had told the media in early January.
Automakers, amidst a sharp increase in capacity, have been resorting to plant shutdowns, layoffs and hefty discounts. "We are hoping that the auto expo becomes the springboard for a shift in consumer mood and fortunes of the industry," adds Mathur.
Ahead of the 12th auto show, sentiment has perked up. Gloomy headlines have receded and new launches have taken their place. Auto executives have more important things than the domestic gloom on their mind as their global top honchos come calling.
"The year 2013 is behind us. We are keen to showcase what we have planned for our customers ahead. The auto show is giving us a bigger platform that gains twice the importance during a slowdown," says Sandeep Singh, deputy MD of Toyota Kirloskar Motor.
New Venue, New Hope
There are many firsts to this year's auto show. One is the timing. India auto shows were always held in early January but the date has now been permanently moved to early February to harmonize the India expo with the global auto show calendar and thereby avoid date clashes.
Also for the first time, the venues for the makers of components and automobiles have been split. While the former remains in Pragati Maidan, the latter has moved to Greater Noida. "This is not an ideal situation. But given the space constraint, this was the best we could do," says Mathur.
Pragati Maidan has both advantages and disadvantages. Bang in the middle of the capital, the show attracted big crowds. In 2012, it attracted 700,000 visitors, making India's the world's second-largest auto show after Shanghai in terms of number of visitors. But it also meant dealing with unruly and unwanted crowds and creating a near stampede-like situation.
Greater Noida, on the outskirts, will attract more discerning visitors, although a section of industry executives does worry about a thinner audience. SIAM expects roughly 75,000 walk-ins daily in the upcoming show against 100,000-odd in 2012. But many prefer to see the positive side.
Jnaneshwar Sen, senior V-P, sales and marketing, Honda India Cars, quips: "We for one are happy. It [the venue] is next to our office." On a serious note though, he adds: "We were more concerned about the stampede [during the previous auto expo] and that few were able to see or showcase their products well."
Meanwhile, SIAM is doing all it can to pull in the crowds. It will offer a free shuttle service from the nearest metro station in Noida and from Pragati Maidan in Delhi. There will be dedicated lanes on the Greater Noida expressway for cars with tickets. Special arrangements have been made for toll collection for yellow number plate vehicles at the venue itself.
The organizers are planning additional attractions. There will be 60 food stalls, 20 food and beverages kiosks and two five-star restaurants serving food. The show will give away one vehicle every day through a special lottery for visitors. It will also have a super bike pavilion, vintage cars and go-karting at the venue.
"This time we have a new venue with modern facilities and an international-level infrastructure. All this brings an opportunity to think out of box in terms of display and visitor experience," says Mayank Pareek, chief operating officer (marketing and sales), Maruti Suzuki.
Beauties on Four Wheels
It helps that auto companies across the board are going all out to fire up sentiment and woo Indian consumers. Many auto firms — Datsun and Isuzu Motors of Japan, Italian bikemaker Moto Morini and Indo-South Korean joint venture DSK Hyosung — are making their India debut at the auto show.
Clearly, carmakers are not allowing the overhang of declining sales to spoil the expo party. Consider, for instance, Tata Motors which isn't letting a 42% slump in sales in December dampen its plans to showcase two brand new cars — a hatchback and a sedan codenamed Falcon.
According to media reports, between Tata Motors and JLR, the group is expected to unveil 11 new products. "This has undoubtedly been the most challenging and prolonged downturn that the Indian auto industry has witnessed. That makes the auto expo even more important," says a Tata Motors spokesperson.
Market leader Maruti Suzuki, which witnessed a sales growth of 6.4% in December, too, has many beauties lined up. But it plans to keep the suspense on till the show. Media reports though suggest that the company will be doing three global launches, including compact hatchback Celerio. Maruti's Korean rival Hyundai will have the global debut of its new Grand i10 compact sedan. BMW and Renault will have four launches each. Ford is reported to be unveiling the Ka concept and also a sub-4-metre compact sedan to compete with Maruti Dzire, and Toyota will unveil its brand new Corolla. Audi will unveil the A3 sedan and Mercedes will showcase its CLA 45 AMG.
Strong Japanese Flavour
Going by the showcases and launches planned as well as top honchos in attendance, it is clear that the 12th auto show will have a strong Japanese flavour to it. A Maruti Suzuki spokesperson did dryly enlighten this writer that "it will do everything it can to delight the visitors", but this year it could well be the lesser-sung Japanese rivals (at least in India) who could steal the show.
Let's start with Honda Motors, which has come back into the reckoning from virtual oblivion on the back of a few successful launches. As the industry groaned under the weight of a sales dip, Honda's December car sales grew 29% on the back of brisk demand for the Amaze sedan and Brio compact.
Its new City has been received well, too. With global president and CEO Takanobu Ito in attendance, Honda plans to follow up its recent good showing with a sizzling line-up at this year's show. This includes the Vision XS-1, a futuristic crossover that will make its global debut, the Mobilio MPV, the new Jazz and the Accord hybrid.
Nissan too has big plans. It will showcase the new Sunny sedan, the Friend-ME concept and display the GT-R GT500 race car. Its newly revived 83-year-old brand Datsun will make its India debut with the entire product range on display. This will include the Go and Go+ MPV. Not to forget the global debut of its Datsun concept car.
Giving its India presence some heft, Nissan will also have a slew of senior executives from Japan flying to Delhi for the auto show. They include Toshiyuki Shiga, vice-chairman of Nissan Motors, Shiro Nakamura, chief creative officer, and Vincent Cobee, head of Datsun project.
"The India auto show is a very big and important event for us. And its importance is increasing. It offers a rare opportunity to showcase our cars, brands and ambitions — even in these difficult times," says Kenichiro Yomura, MD, Nissan India.
"The Japanese are investing here. They have big plans. Between Suzuki, Toyota, Honda and Nissan, they will have a major share of India's car market," avers Rakesh Batra, partner, Ernst & Young. Partly it has to do with the warm bilateral ties between the two countries. On Saturday, Japanese PM Shinzo Abe met his Indian counterpart for the third time in the past eight months. A host of other initiatives are in the works to improve trade ties between the two countries. That Japanese companies are not favourably disposed in China, the world's largest auto market, may also have a part to play in Japan's renewed focus on India.
There are a couple of other themes that will play out at the auto expo this year. Compact hatchbacks is one of them. Carmakers across the globe — Europeans, Americans and Japanese — have finally realized that what Indian consumers need are small cars. And their product line up for the show demonstrates that they are willing to invest time and resources to cater to India's needs. Not just Honda, Datsun and Ford, even luxury carmakers like Audi and BMW are laying thrust on entrylevel small cars.
Two, compact SUVs, a niche successfully exploited by Maruti's Ertiga and the sub-4-metre sedan, pioneered by Maruti's Dzire, are becoming more mainstream. Three, hybrids and electric cars, which have yet to catch buyers' fancy, will make their presence felt. BMW will bring its 'i' range showcasing the i8 hybrid sports car.
For home-grown Mahindra & Mahindra (M&M), hybrids and e-vehicles will be the dominant theme with a hybrid XUV, and the Mahindra Reva 4-door sports car will also be on display. "Our overarching theme is showcasing technology this time," says Pravin Shah, CEO (automotive division), M&M.
Will the Tide Turn?
There is a clear air of expectation among auto executives and SIAM's Mathur sums it up when he says, "The mood of the industry is that of hope as they gear up for the big show." Wilfried Aulbur, managing partner, Roland Berger India, a strategy consulting firm, agrees: "Despite a bad patch, it is time to tell yourself that the world has not come to an end."
To be sure, cyclicality is a constant companion of the auto industry, and often it's during a downturn that products are planned keeping in mind the outlook in the medium to long term. Says Kumar Kandaswamy, senior director, Deloitte Touche Tohmatsu India: "This is an industry that looks at a 3-5-year horizon. With new platforms, new models, the industry is configured to deal with ups and downs."
Establishments in and around Greater Noida may be hoping the auto expo achieves what the 2014 Detroit Auto Show — which concludes today — is expected to do for the city's bankrupt economy: generate business of nearly $400 million. This pick-up is expected via increase in hotel occupancies, and increased business for restaurants and bars.
Such spin-offs may not be seen in as big a way in Greater Noida as in Detroit, yet the stakes may actually be larger for the Indian auto industry. New launches, future product line-ups, glitzy press conferences can do their bit to spark off fresh interest in car purchases.
Batra of Ernst & Young says: "Auto shows and the buzz around them certainly create a positive momentum. Is that going to result in 20% sales growth? No. But it certainly impacts consumer sentiment."
Rahul Jain, partner, BCG India, says in difficult times like these, carmakers are looking for niches that are growing even in this slowing market.
"The market is not uniformly bad. Ford and Honda, which are sitting on months of bookings, will tell you that there is demand provided you have the right product," says Subhabrata Ghosh, CEO, Celsius 100, a marketing and branding firm focussed on the auto sector.
Sylvain Bilaine, former MD of Renault and now MD of Sky B Consulting, is perhaps the most succinct in his analysis: "Auto shows are about the future.
Its prime job is to attract media, build a hype, show future product line ups, generate interest, demonstrate ambition, build brands. It is not about sales." Indian automakers will be hoping that the sales follow on the heels of the hype and hoopla.
