The Coronavirus outbreak has put a dampener on the Indian auto industry’s plans for 2020 and it might get worse before it gets better
The Indian automotive industry had a torrid time in 2019. With new safety regulations driving up prices followed by the need to meet the strict Bharat Stage 6 emission norms, the industry found sales collapsing. While certain models surprised with strong sales, the Kia Seltos, Hyundai Venue and the Maruti-Suzuki Ertiga stood out, several hitherto popular cars saw sales decline. As diesel and petrol prices moved towards parity levels and with BS6 impacting small diesel engines, the product mix of manufacturers was also defying planners expectations. There were some positives though, Hyundai-Kia group’s promotion of small, powerful turbo-petrol engines on their cars, consumers not just adopting automatics but also recognising the difference between types of technology as well as the move to safer cars.
However, the industry had hoped that as 2019 turned to 2020, the third decade of the millennium would be kinder to them. They lined up a whole slew of exciting new cars, from the second-generation Hyundai Creta and the fifth-generation Honda City to several new cars and brands showcased at the Auto Expo that took place in early February. But by then, word was already spreading of a new viral infection doing the rounds in China, the Wuhan fever or what we know as SARS-CoV-2 today. It almost led to the cancellation of the Auto Expo but with some safety measures in place including masks and enough hand sanitiser, the event carried on. It would not have been possible to have held such an event today.
Even six-seven weeks ago, speculation began to rise on whether the Chinese would be able to contain their ‘disease’; many of us who are frequent travellers doubted that. Gradually, it became a pandemic. Germany, the United States and the United Kingdom are all suffering from severe outbreaks but a few nations have suffered more like Italy and Iran. And where illness and death are concerned, the lack of sales is actually an irrelevance but the Indian auto industry really didn’t need this to happen in 2020, especially after the way it suffered in 2019.
Understandably, a few major media drives that were scheduled for this week itself, that of the Honda City and the Hyundai Creta did not happen. This, of course, has had a knock-on impact on the aviation sector and hotels. The automotive sector spends a lot on promotion and marketing. Thanks to the scare of the virus spreading and the talk of social distancing, very few people are visiting showrooms right now. While Hyundai India’s SS Kim told me at the launch of the new Creta that the company is bolstering online sales, the fact is that buyers would want to go check the newer cars at least at a showroom. On the Creta, for example, how will you experience the central arm-rest mounted touch controls for the Air Purifier, which is pretty cool. It is possibly worse for Honda, which unlike Hyundai did not even take part at the Auto Expo and thus, could not even showcase the new City.
While most of us are sure that things will tide over with regards to the virus sooner rather than later, I would warn folks not to treat March 31 as a sort of end-date. The auto industry will not get a reprieve for a while yet. One reason is the globalised nature of this industry and with the contagion continuing in Europe and the United States, the Geneva Motor Show will not be the only major show to get cancelled this year. Forget media drives, the movement of executives, men and materiel will come to a shuddering halt. And even if sales pick up, after a tepid 2019 and weak overall economic sentiment, 2020 already seems like a year best forgotten.
