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Last Updated : Oct 12, 2019 03:19 PM IST | Source: Moneycontrol.com

This week in Auto: Lambos and Mercs fire up the festive period; Auto Expo to miss out on big names

Here is a look at what made headlines in the automotive space during the week

Swaraj Baggonkar @swarajsb
 
 
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The elusive news of pick-up in car sales finally came in this week when retail sales data sourced from the government showed sales in September was higher than the same month last year.

However, there was an even bigger growth story hidden behind them. A story that talks about how luxury car demand refuses to fall as severely as the rest of the industry despite multiple headwinds.

More on this later in the copy. But, first, here is a look at what made headlines in the automotive space during the week.

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Car sales become positive

The festive season has brought back car customers, who pushed retail sales (sales from dealers to buyers) into the positive region for the first time this year.

Retail sales that remained in the negative for the passenger vehicle market for eight months (January to August) posted growth in September. Meanwhile, wholesale volumes during September continued with the trend of being in red recording a fall of 24 percent to 223,317 units.

M&M-Ford JV to spin off 10 products

The Indo-US joint venture company of Mahindra & Mahindra (M&M) and Ford Motor Company could potentially see the development of 10 new models, including those manufactured by M&M’s Korean subsidiary SsangYong.

M&M and Ford agreed to form a new company earlier this month, which would house almost all of Ford’s business assets based in India, including its two factories.

The new company, which is controlled by M&M, has started work on a number of projects, some of which are yet to receive formal approval.

Skoda may consider entering hatchbacks

The newly formed Skoda-Volkswagen entity in India could look at launching a hatchback model depending on market conditions and success of new models that it is presently developing.

Skoda Auto Volkswagen India, the new entity, is spending Rs 8,000 crore on product development and manufacturing of two new mid-size SUVs and a new mid-size sedan, which will be launched by 2021

More than a dozen companies to miss Auto Expo

The prolonged slowdown and a general fall in public interest will put the focus back on Auto Expo 2020, India’s biggest automobile extravaganza, as some popular brands decide to give the biennial event a miss.

At last count, at least a dozen-odd companies envisaged interest in the week-long event that kicks off on February 7, 2020. An equal number of companies were yet to decide on whether to participate or not.

Suzuki lower financial performance forecast

Suzuki Motor Corp said it has revised its consolidated business forecast for the current financial year by lowering net sales estimates by 10.3 per cent due to slowdown in the Indian automobile market and decline in production in Japan.

The company said it expects net sales during the current fiscal to come down to 3,500,000 million yen (about Rs 2,31,000 crore), a dip of 10.3 per cent from 3,900,000 million yen (about Rs 2,57,400 crore) forecasted earlier.

Luxury car demand withstands slowdown better

A few weeks ago Italian super-luxury car maker Lamborghini claimed to have created a new record for car sales in India.

Its Urus model became the fastest to reach 50 units sales beating every other model of its category. The brand with raging bull said it sold one Urus (priced around Rs 3 crore) every week in 12 months.

Based on this robustness Lamborghini has targeted an increase of 33 percent in volumes this calendar year to 60 units up from 45 units sold in 2018. The company launched the Huracan Evo Syder at Rs 4.1 crore at the time of announcing the sales targets this week.

German luxury heavyweight Mercedes-Benz said it delivered 200 cars on a single day creating a new record for cars delivered on that day. On Dussehra day the luxury car market leader delivered C, E, GLC and GLE Class cars to buyers in Mumbai and Gujarat. On average, the maker of S-Class delivers around 35-50 cars a day.

Further both Mercedes and BMW, who together control more than half of India’s luxury car market, bucked the trend by clocking a sales drop lower than several mass-market brands such as Maruti Suzuki, Tata Motors and Mahindra.

Mercedes-Benz sales dropped by 16 percent to 9,915 units while that of BMW, the second-biggest luxury car brand, fell by 11 percent to 7,049 units during the nine months ended September.

In comparison, sales of car market leader Maruti Suzuki slumped by 27 percent in the domestic market during the April-September period. Tata Motors sales declined by 41 percent while that of SUV-specialist M&M clocked 15 percent decline during the same six months.

The drop in volumes of luxury cars comes after a stellar rise in prices brought into effect by every manufacturer during the past 12 months following an increase in import costs. The slowdown may have pinched the affluent class as much as the middle-class but a look at the sales chart reveals a different story.

“No doubt the ultra-rich have been affected. The stock market has underperformed. Direct taxes have not eased for them. Real estate valuation has come down but there will still be buyers who would not think too much when buying a Lamborghini. That is called a ‘passion buy’. For them, something as special as a Lamborghini cannot wait and they know it," said one of only three dealers of Lamborghini in India.

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First Published on Oct 12, 2019 09:45 am
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