Struggling car makers look to Delhi Auto Expo for slump reversal3 min read . Updated: 03 Feb 2014, 02:10 PM IST
New Delhi Auto Expo this week may become a turning point for car makers seeking to revive demand
Mumbai: Indian car makers have seen better days. Auto sales in the country are headed for their first drop in 12 years as the economy grows at a pace that’s close to a decade-low.
So market leader Maruti Suzuki India Ltd to Tata Motors Ltd, grieving over the sudden death of managing director Karl Slym, are counting on the biennial New Delhi Auto Expo this week to become a turning point as they seek to revive demand with their latest vehicle models.
It won’t be easy. Asia’s third-largest auto market is shrinking at time when Indian inflation is higher than anywhere in Asia, undermining the economy, and government help is nowhere in sight as political bickering escalates before the general elections due in May.
“The only way to turn things around is if people are excited by the new models and concepts at the Auto Expo, which is why the show is crucial," said Deepesh Rathore, director at Emerging Markets Automotive Advisors in New Delhi. “Slym’s untimely death will be a sad overhang."
The economic slump has prompted consumers in India, already the world’s biggest market for hatchbacks, to stop flirting with gas-guzzlers and return to small cars. Hatchbacks accounted for 55% of the 1.8 million passenger vehicles sold in the country during the first nine months of the Indian fiscal year, which ends on 31 March.
That’s why small cars, along with compact SUVs—the focus of the last auto show—are likely to dominate the show floor this year.
Tata Motors will be in the spotlight. The Mumbai-based company, whose sales in India have fallen more than at any other carmaker, will unveil a hatchback codenamed F4 and a compact sedan F5. The company will be paying tribute to Slym, who had been heading the company—except for the profit-driving Jaguar Land Rover (JLR) unit—before he fell to his death at the Shangri-La hotel in Bangkok just over a week ago.
Slym personally oversaw our build-up towards new launches at Auto Expo 2014 and we are going ahead with all we had planned with him, Tata said in e-mailed comments. The Auto Expo is the most significant event in our calendar and we have exciting new cars, new concepts as well as great new variants of existing brands in our showcase.
Maruti, majority-owned by Japan’s Suzuki Motor Corp., plans to introduce the Celerio hatchback, a yet-to-be named concept SUV and a sedan. While the New Delhi-based company widened its lead in India this fiscal year, domestic sales shrank 6.3% in January, the second drop in three months.
Among foreign auto makers, Ford Motor Co. is scheduled to present a new hatchback concept vehicle and Nissan Motor Co.’s low-cost Datsun brand will display a prototype of a hatchback that will compete against Maruti’s best-selling Alto minicar. Nissan will also unveil production versions of the Go hatchback and Go+ minivan, whose deliveries will begin this year.
Honda Motor Co., which has climbed to the third spot among carmakers in India from as low as No. 8 in 2011 on the back of its entry into diesel models, will show a new version of its Jazz hatchback, a crossover concept called Honda Vision XS1 and the Mobilio minivan. The Jazz and the minivan will go on sale in the South Asian country in the year ending March 2015, though Honda isn’t sure if India’s slump will be over by then.
“A lot of new models are being showcased by everybody with the hope that this will create excitement and spur customers to want to own a car," Jnaneswar Sen, Honda’s India sales chief, said in a telephone interview. “Whether this will boost demand or not, I don’t really know."
Back at Tata, the motor show may offer a chance for the company to recover some ground after sales of its passenger vehicles in India slumped 37% in the first nine months of the fiscal year. Last month, it introduced the Twist variant of the Nano, equipped with features such as power steering to upgrade its image and win back urban buyers.
The company will do so without Slym, who joined Tata in 2012 after a 17-year career at General Motors Co. and would have celebrated his 52nd birthday on 9 February. Thai police said last week that preliminary evidence indicated Slym, who was in Bangkok on business, jumped to his death after a quarrel with his wife.
“Since the Nano, Tata hasn’t had any new models at the show," Rathore said. “This year’s show in a way will be a tribute to Mr. Slym, as whatever the company displays will be part of the changes he brought at the company." Bloomberg