With barely a couple of months to go before the Delhi Auto Expo gets underway in January 2023, the big worry is the minuscule number of participants this time around.
Almost all the big names in the car and two-wheeler segments have opted out and for now it looks as if only Maruti, Tata Motors, Toyota, Hyundai, Kia, BYD and MG Motor are going to be among the few car companies showcasing their products. All others including prominent German carmakers such as Mercedes, BMW and Volkswagen as well as Mahindra & Mahindra, Renault, etc have chosen to give the event a skip.
From the two-wheeler side, none of the big brands is participating either, which clearly means that there is really very little to look forward to. “It is way too much money to spend at this point in time and the returns are just not worth the time and effort,” says a top industry executive.
It is not as if this will come as a complete surprise to the organisers of the Expo considering that the apathy has been building up for a while and the bubble was due to burst anytime. There was just a greater feeling of optimism that the 2023 event would attract greater participation, especially after two years of the pandemic.
“There was some hope that the kind of revenge spending you see on car buying would naturally prompt manufacturers to go the extra mile for the Auto Expo… more so when it had been put off by a year because of the COVID overhang,” adds the executive. Clearly, these sentiments are not echoed by companies that have chosen to conserve cash, especially when the spend for the Expo runs into several crore of rupees.
Futility Of Big Spends
Beyond this, the pandemic was also an eye-opener on getting a huge number of eyeballs virtually rather than hosting a physical event. Companies realised that product launches or press conferences could be done online without the need to book space at a hotel. Dealer and vendor meets were also carried out this way and the savings were substantial.
Why then go the extra mile for something like the Auto Expo, which would need tremendous planning in logistics, renting pavilions at huge costs and adding the extra glam quotient? “All this is completely pointless and we would much rather focus on the challenges of the fourth quarter instead,” quips a company official.
It is also clear that manufacturers know that global volatility is something to be factored in their business plans, especially in these turbulent times. The Russian war on Ukraine has caused huge disruptions in the supply chain and fuelled inflation. Companies are still incurring huge costs on overseas shipments and would rather focus on keeping tight budgets.
Cash Is Key
“We need to keep an eye on cash all the time and things could just become worse if China chooses to invade Taiwan and throw everything out of gear,” explains a top finance professional of an automotive company. While everyone is exulting on sales picking up in recent months, there is still tremendous anxiety on what lies ahead. If indeed China does a Ukraine on Taiwan, the semiconductor shortage crisis could just worsen at a time when it is easing off gradually.
Beyond this, is the rationale of hosting the Auto Expo in its present format, at a time when the industry is going through a massive churn with new challenges like electrification changing the contours of mobility, valid?
As a CEO says, the Expo was a welcome novelty way back in the 1990s when it first kicked off at Delhi’s Pragati Maidan. This was the time India had opened its doors to investments from multinational carmakers and there was a reason for companies to showcase their products.
The 1998 event, for instance, was truly a showstopper of sorts with the Tata Indica, Hyundai Santro, Daewoo Matiz and a host of other products that caught the imagination of the crowds. Never mind that there was a prominent exit in the form of Peugeot which had exited its India operations — there were many others to make up for its absence.
Recalling The Highs
Likewise, the following years were equally alluring and who would forget the huge crowds that thronged the Tata pavilion during the unveiling of the Nano at the 2008 Auto Expo? The hysteria that followed was enough to make every Indian feel proud of the Tata brand, which had caused the world to sit up and take notice of what frugal engineering really meant.
Over the years, however, fatigue was setting in and it was clear that participants were just going through the motions. It was getting to be a big problem coping with the huge crowds and worrying about the safety of young women volunteers, who were on stage with the fancy cars and bikes.
The enthusiasm of the past was now giving way to angst and exasperation, especially with complaints mounting on the state of affairs at the Pragati Maidan venue, which was in dire need of an overhaul. The solution that emerged in the form of Greater Noida did little to improve the overall sentiment.
Sure, there were no complaints about the levels of housekeeping but the distance was a killer. After all, Pragati Maidan is in the heart of Delhi while the new venue was way too far with its own challenges in connectivity. Keeping the component event at Pragati also did not help matters from the viewpoint of logistics and it was impossible for company representatives to visit both locations comfortably and soak in what was on display.
Introspection Time
Right now, if the response to the 2023 Expo is any indication, it is perhaps time for the organisers to press the pause button and do some introspection on how best to turn things around. Unlike the past, the Indian auto industry has evolved with technology now becoming the core of the business. As a two-wheeler official puts it, the narrative now needs to be changed.
“Why is it that a middle-class consumer is willing to pay much more for a new cellphone than a two-wheeler? It is because he sees that there is a premium for technology? This is the messaging that will now have to be conveyed to visitors at an event like the Auto Expo,” he says.
When this happens, companies will have greater latitude in working on concepts, which showcase the technology that goes into their new cars, scooters and motorcycles. People visiting the show will then understand the complexities that go into a product and the importance of mechatronics.
“It is the best way to redefine aspiration instead of merely showcasing products which are done as well in dealerships across the country,” adds the official.
Not All Doom And Gloom
To some, the days of displaying new models are now a thing of the past since they can now be done at press events and not necessarily at the Auto Expo. In the view of others, this is a cynical attitude since there is really nothing as heady as the Delhi Auto Expo. “This is true for other international events also,” says an industry executive.
For those companies participating in January 2023, they clearly see value in the event despite the fact that it is an expensive affair. For one, they will have new products to show and this will also give them an opportunity to gauge the response from the crowds.
Two, participants such as Maruti, Hyundai, and Tata Motors, etc are part of the mass market and perhaps see sense in showcasing their offerings here. After all, the trio accounts for a large chunk of the Indian car market and would like to drive this message home.
New entrants like Kia and MG Motor are also the epitome of aggression and will see the Expo as the ideal venue to woo potential customers. BYD, likewise, would want to use the occasion to make a strong statement on its intent in the electric mobility space, especially with the recent launch of the Atto 3. This is true for Lexus too, which may leverage the event to send out the right message.
Spreading The Tech Word
Lowering the participation costs will definitely help the cause of getting more companies back to the Expo but this will have to go hand-in-hand with the need to showcase new technology trends in the products that are on display to a more discerning audience.
Further, say industry experts, Delhi does not have to be the sole venue for the Expo going forward and other metros like Bengaluru (the Silicon Valley of India and the destination for start-ups), Chennai (the Detroit of Asia), Mumbai and Hyderabad can also be considered for the future.
With electronics and software now being the key ingredients for a vehicle, perhaps the best reference point in the Indian setting could be the CES (Consumer Electronics Show) at Las Vegas, Nevada, in the US, which is now attracting a host of automakers.
The top management of these companies clearly prefer showcasing their products here which means that even overseas, mega auto events in Frankfurt, Paris and Geneva will need to be rebooted as concepts. As a top two-wheeler official in India puts it, “I would rather go to Nevada than Noida!”
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