Auto Expo begins today, could be a strategy to revive sluggish car sales
With an estimated 70 new models and concept cars set to be unveiled - 15 of them for the first time globally - this year's Auto Expo, which opens to public on February 7, couldn't have come at a better time for the Indian auto industry. Once hailed as the fastest growing market in the world, car sales have hit a trough thanks to a sluggish overall economy and runaway fuel prices that have kept consumers away. Passenger car sales dipped for the first time in well over a decade in 2012-13 and looks all set for a second successive annual decrease in this financial year.
The best way to bring the industry back on track is an avalanche of launches. From a no-frills Datsun Go to entry-level sedans such as Hyundai Grand, people movers Honda Mobilio and luxury marquees like Mercedes CLA and Audi A3 sedan, there's something for everybody. Technological advancement is showcased in the Maruti Celerio, which promises to bring automatic transmission to a common man and the BMW i8, a hybrid sportscar with the fuel economy of a compact.
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Two years ago it was the super-compact segment defined by the Maruti Swift that made headlines. Having exhausted that category and with the industry looking at new frontiers for growth, it is the segment below, which still forms the meat of the market in India that will be the highlight. Datsun, the newly revived Nissan nameplate, will unveil the Go hatchback, preceding its eventual launch in the market in March. Others such as Volkswagen, Renault and Skoda don't have a product in the segment ready to unveil at the auto expo yet. The fresh challenge is at the heart of Maruti and Hyundai's dominance in one of the largest and most competitive small car markets around the world. The aam aadmi consumer will be king.
The other launch being keenly watched is the Jazz. Priced ridiculously high at about ₹7 lakh at its launch in 2009, Honda discontinued the vehicle last year to make space for the Amaze. But the new, aggressively priced Jazz, armed with a diesel engine, will debut in India later this year. For those missing the Honda badge in the super hatchback segment, this would be a space worth watching for.
Compact Does It
Credit for pioneering this category goes to Tata Motors but it really came to the fore when Maruti redesigned the Dzire to fit the under 4 metre definition of the government and avail reduced excise duties. Last year, Honda brought in the Amaze that revived the Japanese car maker. Many are eyeing that segment now. The highlight of the show would be the Hyundai Grand sedan based on last year's revelation Grand i10 hatchback. There would also be the redesigned Tata Indica compact sedan that will show once again if the homegrown car maker is up for a fight.
The heightened activity in this category is not surprising. Last year, compact sedan was the segment that grew the fastest. More often, cars like Dzire and Amaze have benefitted at the cost of regular sedans like Ford Fiesta Classic, Chevrolet Sail and Toyota Etios.
"The segment has current volumes of 31,000 units a month and is growing in strong double digits," says Rakesh Srivastava, senior Vice President, marketing and sales, Hyundai Motor India Ltd. "We are the segment leaders in the bigger sedan segment and would like to have a sizeable presence in the entry level category as well."
Multiple-utility marvels
Diesel prices may have gone up but the appetite for people movers refuses to die. Or so the industry believes. Egged on by the success of the Amaze, Honda has stretched that same platform to develop the Mobilio, a compact seven-seater, to on the Maruti Ertiga. The vehicle is likely to be launched in the middle of this year.
Similarly, there is the Datsun Go+, a similar-sized people mover developed by stretching the small car Go. Further, General Motors would showcase an all-new concept vehicle for a compact SUV while the bigger Trailblazer would also be on display.
Expanding an existing platform to develop a seven-seater vehicle not only saves the company the development costs but also allows it to price the vehicle aggressively.
Expo and the City
After a not-so-eventful edition in 2012, when mismanagement took the sheen off the biennial event, the Expo has shifted to a new venue. It has moved from Pragati Maidan, in the heart of the Capital, to the far-flung Greater Noida Expo Mart. The need for fewer crowds and better management has been felt for quite sometime. So the organisers decided to split the show into two - for components and ancillaries and vehicles.
The Expo would still be bigger than ever before. Space has gone up from 39,000 sq metre to 48,000 sq metre and the number of exhibitors from 35 to 41. The shift to the new venue, however, may result in a drastic drop in the number of footfalls and the Expo may lose its clout as one of the world's largest automotive events. The number of visitors is expected to be less than 500,000, more than 30% less than in 2012 and less than half of 2010. A glitch-free event may just compensate for it!
Leaner Mean Machines
The big guns in the Indian bike market are not averse to offering smaller-sized machines. After showcasing the Street 750 at the Bike Week earlier this month, the company will launch the bike - the cheapest Harley in town - at the Expo.
A precursor to the Street 500 to debut in 2015, these are bikes with smaller engines and not as much fun as Harleys ought to be but they will be competitively priced and a Harley could within reach of a lot many more. Smaller, nimbler, better suited for city conditions. These were the words used by Harley Davidson while unveiling its Street 750. It is a completely new product from ground up, and is Harley's first new design in over 14 years. Understandably it is vastly different from the macho image that Harley has always projected and has forced hard-core fans to call it 'the most un-Harley bike from Harley.' But the company is no longer looking at just the traditional consumer base.
"This bike was designed and developed based on inputs from one-on-one interactions with over 3,000 riders in different parts of the world, 600 from India alone," said Anoop Prakash, CEO, Harley Davidson India. The feedback was that the people wanted a more usable bike, with good handling for city riding, he said.
The smaller Street 500 will be within striking distance of the 500-cc Bullet from Royal Enfield, our very own iconic bike. "I think that the future of biking is in the middle range, with power and performance that is usable, rather than heavy bikes with huge power that you can't really use," says Royal Enfield CEO Siddharth Lal.
Harley's arch-rival Triumph might go even smaller with engines not bigger than 250cc and 500cc. India would be the first market to get these and the bikes may be found tucked in a corner at the auto expo as well.
Even among sports bikes, the focus is on the middle range. The 650-cc Kawasaki Ninja has been doing well in India. BMW too has tied up with TVS Motors to develop smaller cheaper bikes for emerging markets.
Advent of automatic manual transmission
This Auto Expo will see the birth of something that may well revolutionise the way cars are driven in India. In automotive parlance it is called the auto gear shift. Essentially, it is a poor man's automatic car that is not as refined as a fully automatic transmission but it does not have a clutch and offers the conveniences that come with it in city driving cycles. And because it is not as sophisticated it would be at half the premium that a regular automatic car attracts over a geared car.
The need for automatic cars has been felt for quite sometime but high price, a compromise on fuel economy and expensive repair costs have pegged the segment back. Market leader Maruti will introduce the auto gear shift technology in its new small car Celerio - the replacement model for its twin duds A Star and Estilo, and it may just be what India was waiting for.
"Our research shows that a quarter of consumers who buy small cars enquire about an automatic variant. We've had the options in some of our cars like A-Star but sales have been low because the cars are at least ₹1 lakh more expensive than a geared car and offers lower fuel economy," says Mayank Pareek, chief operating officer, Maruti Suzuki India Limited. "The Celerio is a leap in technology. It offers a clutchless drive. So, there's no need to change gears without compromising on fuel economy. And it will not be very expensive either."
The Celerio will hit the roads on January 6, the second day of the Expo but others are not far behind. The Mahindra compact SUV Quanto is also set to be offered with auto gear shift and even Tata is considering it for the Nano.
It may be the beginning of the end for gears in India.
A luxury twist to hybrid cars
It is down in the dumps in the luxury car space but BMW has been hyping it up as the cars for the future that are not boring. We are talking about hybrid cars that are not merely friendly with environment but seriously oozing oomph! The BMW i8, which will be powered by an electric motor mated to a small petrol engine, is actually a sports-car that promises the fuel economy of a compact car.
The price is likely to be exorbitant and India would perhaps not be a big market, but if you are the kind that loves trees more than cars, there would be an all-electric sports car from the house of Mahindras as well.
There is plenty more on offer in the luxury car space. Audi will bring in its new entry-level sedan Audi A3 to be launched later this year while Mercedes, fresh from its high growth in 2013, will flex its muscles with a compact sedan CLA and a concept vehicle for its entry level sports utility vehicle GLA.
During the Auto Expo 2014, these cars could be hot favourites for that selfie on Twitter.
The Big Launches
Maruti Celerio
Officially a replacement for the ageing Estilo and the flop A-Star, the Celerio is based on a completely new platform and debuts with a first-of-its-kind auto gear shift technology. If all goes well, Indian consumers may finally get a credible option of owning an automatic car without compromising either on fuel economy or price. To be launched on the second day of the Expo, Celerio will come in with a price tag of ₹3.5 lakh-5 lakh and will be powered by Maruti's 1 litre K series petrol engine that also powers the WagonR and Alto K10.
Hyundai Santa Fe
Traditionally, successful small car makers in India have struggled to get going in big car segments in a status-conscious society such as ours. Hyundai, however, managed to alter the equations somewhat with the twin successes of the Verna and Elantra sedans but failed to strike gold in the SUV segment with the existing Santa Fe. The next generation version brings a car that is more plush, offers better features and has seen enhancements in the ride and handling departments. Priced at around ₹25 lakh, Santa Fe would take on the dominance of Toyota Fortuner and there is a lot riding on it this time.
Follow Sumant Banerji on Twitter: @sumantbanerji
