Yearender 2020 special: Five key developments in Indian automobile industry
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2020 has been a tough year for the Indian automobile industry that had already been reeling under the weight of economic slowdown. The added weight of the coronavirus induced restrictions aggravated the woes of the sector as plants were shut down, production stalled, jobs lost, sales plummeted and money lost. However, despite all these challenges, car makers and dealers put in immense efforts to woo customers with various new features, policies, discounts and no-touch facilities. Thus, as a whole, the Indian auto industry witnessed a lot of progress in terms of policies, technology and affordability.
Here’s a look at the key five developments in Indian automobile industry in the year 2020:
1. Go digital: Buy vehicle with just a 'click'
As most people chose to steer clear of showrooms due to the fear of infections and restricted spending, demand for automobiles collapsed drastically over the first few months of the coronavirus lockdown. In April, almost every major auto maker witnesses zero sales. However, amid newer ways of living, working and getting by, the auto industry too started adapting to a new normal with means and technology to allow customers to buy vehicles without the need of stepping out from their homes. Going digital with sales channels was the obvious way forward for auto makers.
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Car makers such as Maruti Suzuki, Hyundai, Tata Motors, Mercedes, BMW, Honda and Volkswagen strengthened their digital sales channels, allowing customers to select their preferred car model, color, variant, and nearest dealer, all online. Even the test drive cars and the final cars can be delivered at home, just like a pizza, via these end-to-end online sales platforms. Though car makers like Maruti had already started working on such a platform, coronavirus only sped up the process of strengthening the digital sales network.
2. Get set go without the clutch
As the auto industry bets big of newer technologies, 2020 saw the introduction of the intelligent manual transmission (iMT) on Hyundai Venue and then Kia Sonet sub-compact SUVs. The innovation offers customers the convenience of 2-pedal clutch-less technology. It eliminates the need for drivers to constantly use the clutch pedal as in a conventional manual transmission while retaining control to slot gears manually. It seeks to play a balancing role between convenience and driver engagement and could prove to be a useful addition in cars on Indian roads which are notoriously infamous for traffic snarls.
Though the technology was first touted to be introduced on Kia’s Sonet with its launch in September, Hyundai beat Kia to it by introducing the technology in Venue in July. Instead of a mechanical linkage, the iMT’s clutch operates purely electronically, and is integrated seamlessly with a 48V MHEV powertrain.
3. Making luxury cars more affordable
The year 2020 saw luxury car makers like Mercedes and Audi opening doors for more customers into the segment. These companies are especially targeting the young and those looking to break into the luxury car segment.
In October, Audi launched its most affordable SUV in India, the Q2, at the starting price of ₹34.99 lakh (ex showroom). While it has been brought to India via the CBU (completely built unit) route, the company expects it to be a key volume driver. While the upper variants may still make the Q2 a tad expensive, the Standard trim could be the most lucrative for buyers on a budget.
In November, Mercedes officially brought AMG closer home to India by launching its first locally-assembled performance sports car - AMG GLC 43 Coupe - at ₹76.70 lakh (ex showroom). This marked the start of local assembly of AMG products from Mercedes at its Chakan plant near Pune. The move brings these products to a wider audience here owing to lower costs.
4. Paving the path for electric mobility
India has been taking small but strong steps towards putting more electric vehicles on its roads with the aim of becoming a 100% electric vehicle nation by 2030. And here, the most important role is being played by the country's national capital as CM Arvind Kejriwal announced the 'Delhi Electric Vehicle Policy' in August.
The policy plans to make the share of EVs in the state's new car registrations reach 25% (five lakh) by 2024. This includes various incentives to make EVs affordable for the residents while also backing up the cause with a promise to support charging infrastructure as well as setting an example for other states to follow.
Following into the footsteps, Telangana became the third state in India to launch an electric vehicle policy after Delhi and Gujarat. The state’s EV policy offers 100% exemption of road tax and registration fee for the first two lakh electric two-wheelers purchased and registered within the state. It also aims to proactively support creation of EV charging infrastructure in the initial phase and eventually create a market for commercially viable EV charging business.
5. Subscribe to cars just like Netflix
Car makers such as Maruti Suzuki and Toyota are now offering a new way of owning cars for the new age customers in the count. This system offers the flexibility of driving without the need to actually own the car. The subscription plans promise much lower investments and can be a viable option for first-time car buyers unwilling to commit to large financial commitments.
Under Maruti’s subscribe-a-new-car program, customers can choose between a new Swift, Dzire, Vitara Brezza and Ertiga from Maruti Suzuki Arena network and between Baleno, Ciaz and XL6 from Nexa. The cars can be brought home on a subscription model for time periods between 12 months and 48 months while insurance and maintenance costs are included. The program is currently offered in Delhi/NCR, Bengaluru, Mumbai, Chennai, Ahmedabad and Gandhinagar.
Toyota has partnered with Myles Automotive Technologies in order to expand its car subscription services for individual customers in Delhi NCR, Mumbai, and Bengaluru. The service will allow customers to select a Toyota car of their choice for a tenure of three to five years on a fixed monthly fee on lease. More flexible subscription tenures ranging from 12, 18, 24, 36 or 48 months have also been introduced. The monthly rental includes vehicle usage cost, insurance coverage, road tax, registration, maintenance for km opted and 24x7 roadside assistance.
