April 15, 2021

Mega auto sector offers within the sluggish lane as Covid scuttles plans

The pandemic hasn’t simply worn out Motown’s gross sales: It has both scuttled or delayed the conclusion of mega offers in one of many world’s greatest auto markets.

First up is the Ford-Mahindra JV. That’s already delayed by 1 / 4, whereas Tata Motors’ talks with a possible accomplice have hit the Covid bump. Normal Motors, which has exited India as a gross sales market, hasn’t but been in a position to hand over its Talegaon facility to China’s largest SUV maker Nice Wall Motors. That will nicely spill into subsequent 12 months, pushing again the model’s entry into India.

Product launches, too, have been shelved – throughout segments and producers. Maruti Suzuki’s all new small automobile codenamed YNC or new technology Celerio, and small SUV Jimny will solely come subsequent 12 months. Hyundai Motor India‘s new technology Elite i20 has been pushed again by a few months. Mahindra & Mahindra has seen its new gen Thar, mid-size SUV Z101 and premium SUV W601 delayed by six to 9 months.

Tata Motors SUVs Gravitas and H2X are prone to see delays of three to 6 months with one of many two new merchandise being moved to 2021. Renault-Nissan SUVs deliberate for the second half of 2020 have a number of months’ delay.

These fashions would have performed an enormous function in reviving sentiment for particular person manufacturers and accelerating industry-wide restoration.

Whereas the market has proven indicators of restoration after the lockdown eased, passenger car makers are but to beat the hurdles. April to July gross sales are already down 60%. With some car makers securing 85-90% bookings and enquiries, the upcoming festive season is important to make up for a lot of the misplaced volumes.

On the Q1 earnings convention, Pawan Goenka, MD of Mahindra & Mahindra, stated that the three way partnership with Ford is but to get a clearance from native authorities in Tamil Nadu and Gujarat.

M&M stated that the formalization of its JV with Ford has been delayed to October from its earlier said plan of July, though synergy workouts are persevering with.

Tata Motors didn’t supply any timelines on securing a strategic accomplice, and a spokesperson stated the corporate doesn’t have recent updates on the upcoming merchandise.

“In March 2020, Tata Motors introduced its intent to subsidiarise its PV enterprise as step one in direction of securing mutually useful strategic alliances that present entry to merchandise, architectures, powertrains, new-age applied sciences and capital. Nonetheless, it’s not an crucial for right this moment however a chance to be secured for tomorrow,” added the spokesperson.

Nice Wall Motors and Hyundai Motor India didn’t elicit responses to mails, whereas Maruti Suzuki declined to provide any steerage on product launches.

Some mid-term tasks, similar to Volkswagen’s venture 2.0, may see a delay of 6-7 weeks.

“Regardless of numerous elements affecting the {industry}, we’re on monitor with the launch of the India 2.Zero merchandise in the course of subsequent 12 months,” a Skoda Auto Volkswagen India spokesperson stated.

Individually, Royal Enfield’s plan of introducing one new mannequin each quarter has been hit, with a few of the new product rollouts shifting into FY-22. The MD of Eicher Motors Siddhartha Lal confirmed that the launches have been delayed by 3-6 months.

Royal Enfield spokesperson in an official response stated, the brand new product launches comply with a strategic enterprise course for Indian and world markets and are led by a number of elements.

“Presently, our vary of BS VI bikes are performing extraordinarily nicely, and response from customers has been wonderful. We proceed to sort out exterior pandemic-related challenges and are duly planning for launches forward concurrently,” added RE spokesperson.

“It’s a robust spot for a lot of firms, a brand new mannequin can revive sentiment, however a brand new mannequin in a restricted gross sales surroundings may also restrict the quantity potential. With provide chain disruptions nonetheless affecting manufacturing and intermittent shutdown of dealerships, some firms are prepared to go sluggish, however the dilemma is how a lot can one delay,” stated an government at a number one vendor that provides elements to a number of automobile makers.