Is Auto Expo losing sheen in India? Here is a reality check

By: |
December 29, 2017 12:47 AM

The Auto Expo 2018, South Asia’s largest auto show, is round the corner, and as always the excitement is building up, but it appears that the zing of the past is missing.

Auto Expo, india, auto expo 2018, reality checkThe Auto Expo 2018, South Asia’s largest auto show, is round the corner, and as always the excitement is building up, but it appears that the zing of the past is missing.

The Auto Expo 2018, South Asia’s largest auto show, is round the corner, and as always the excitement is building up, but it appears that the zing of the past is missing. There are a few brands whose names don’t find a mention in the exhibitors’ list this time. These include Ford India, Volkswagen India, Skoda Auto India and Audi India. In fact, at least six major global automakers plan to skip the show to cut down on costs on the back of weak domestic sales. In the 13th Auto Expo, in 2016, seven major companies didn’t take part (including two-wheelers and heavy commercial vehicle manufacturers). Blame it on sub-par performance of some of the global vehicle makers, who cannot justify spending big monies on small volumes they sell in India, or blame it on the overdose of information on the internet, which has stolen the surprise factor at the biennial Auto Show held in Greater Noida near New Delhi. But the reasons could go beyond money. Of course, it’s not a cheap affair to be part of the razzmatazz of the Auto Expo; it comes at a heavy price. The answer to the question on Return on Investment (RoI) is deliberated and often companies struggle to measure the outcome of such big investments. The executives from some of these companies have openly stated that financial constraint is a reason for not participating. Valid as it may be, but there is no other bigger event in India that could offer the decibel levels as the Expo.

Brand maturity

The exploding digital world and internet boom has ensured that awareness about a particular brand can be spread on a mass scale. The Auto Expo was considered as an ideal platform for brands to showcase their might to the lay person; today all those companies who are not taking part have already established themselves in the Indian market, at least on the awareness front. For example, buyers associate Ford with the strong brand image of the EcoSport, and Volkswagen with the Polo. At the end, it’s all about costs, and building and maintaining brand equity; strong brand recall follows new launches at such events, and do these manufacturers have something important to showcase? The answer, it appears, is ‘no’. No India-specific product With an average of two out of 10 products launched in India turning into a major success, it is getting an expensive affair for some global OEMs to keep churning out new products with small volumes. For sure, the Auto Expo is an excellent platform if a company wants to create a buzz in the market, but only if it has something new to show. With no major product launches in the pipeline for Ford or Volkswagen, they have decided to give the Auto Expo a miss. Unlike in the past when Ford introduced its EcoSport SUV and Figo Concept, and Volkswagen showcased the sub-4 metre sedan Ameo—when they used the platform to the hilt—now they perhaps felt it is prudent to channelise funds into other activities that could deliver returns. However, we will see new participants like Kia Motors who would want to build on awareness.

Dominance of Maruti Suzuki

While the also-rans in the market may question the RoI, for successful players like Maruti Suzuki the event is their biggest extravaganza, and a stage that gives a peep into the future. Interestingly, Maruti has increased its domestic market share from 38% in FY12 to 47% in FY17—coinciding with three editions of the Expo. At every Expo, Maruti showcases new technologies or a new vehicle to outclass its rivals—Automated Manual Transmission (AMT) in 2014, Vitara Brezza in 2016, and the new Swift expected in 2018. Likewise, one can expect exciting offerings from Hyundai, Honda, Mahindra and Tata.

Information flow

If we go back 10 years, a few media houses covered each model minutely. The information related to new launches was not available easily. Consumers used to wait for the Auto Expo to understand and feel new vehicles. But today, with the internet boom, reporters track each and every model launch globally. Information flow is rapid, especially from global markets to India. Today, when a Tesla launches a Roadster or a Semi in the US, in real-time the information is in India. Clearly, there is a high media and branding cost involved in displaying models at the show, and while many are skipping this time, others don’t want to miss the opportunity. It remains to be seen whether the Expo will have a positive rub-off on the brands and hence sales for the exhibitors next year, or will the companies who are not participating be happy with the money saved. However, as far as pure excitement is concerned, it’s likely to sustain. The highlights of the Auto Expo 2018 are going to be: w New Swift: The next-gen Suzuki Swift could be launched. It is likely to be equipped with AMT in both petrol and diesel. You may also see the new Ertiga and new Ciaz, which is expected to be equipped with the new 1.5-litre diesel engine. w Vios/Yaris Ativ: The Toyota stall could see the upcoming Vios/Yaris Ativ, while MPV lovers might see the Alphard luxury MPV. w Ioniq: Although Hyundai doesn’t have a path-breaking car to show, it may launch its global sub-brand, the Ioniq, in India. w Kia: The sibling of Hyundai is expected to come out loud at the Auto Expo 2018, as it won’t have another major Expo to showcase its vehicles that it plans to launch by 2019. The author is senior analyst, IHS Markit

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