MUMBAI| NEW DELHI: India’s auto industry is among the world’s fastest expanding, but that fact doesn’t appear to have convinced Volkswagen, Ford, Volvo or Harley Davidson to participate in the country’s mega product-showcasing event — the Auto Expo.
Seven of the top 15 carmakers, three major truck makers and two global two-wheeler majors will not be present at the biennial auto show to be held next month in Greater Noida, a south-eastern suburb of New Delhi.
Muted returns on investment, the lack of major new offerings, the profile of visitors at Greater Noida, and expensive real estate are among the reasons cited by industry executives while explaining the absence of top automakers.
More important, however, is the diminishing appeal of the event, with the Internet robbing the show of its ability to surprise consumers. The proliferation of the Web has made it difficult for automakers to maintain secrecy on product pipelines, plans for which would traditionally be announced at previous editions of the Expo.
“There are no big launches at the auto show… Companies who do not have new models and concepts to showcase have stayed away as infrastructure costs are steep… If you keep aside the top 3-4 car makers, smaller players get lost in the clutter… They do not get the desired voice or coverage,” said an industry executive who did not wish to be named.
To be sure, those not participating would account for less than a fifth of the cumulative market share locally, although the absentee companies are global automotive icons. On last count, about 60 companies are set to participate in the show to be organised between February 9-14. The show will be spread over 47,500 sq metres, with about a tenth of the area earmarked for interactive activities.
Among luxury carmakers, only two of the top five — Mercedes Benz and BMW — will attend the show. Superbike makers Harley Davison and Triumph, too, have opted out. The Volkswagen Group, which has brands such as Volkswagen, Skoda, Audi, Scania, and Man Trucks, will sit out. So will Ford, Nissan, and Fiat Chrysler — brands that had participated in the last edition.
Volkswagen Group attributed its absence to a global review of its event and show strategy that entails major commitments by way of time and planning. Volkswagen will, however, continue its focus and stay committed to the India market, it told ET.
The world’s top two truck makers, Daimler and Volvo, will also be absent. Daimler’s Indian subsidiary Bharat Benz has never participated in the biennial auto show, but Volvo and its joint venture partner Eicher Motors have decided to give it a miss this year.
A minimum of ₹30-50 crore is needed to participate in the auto show, depending on the space bought at the venue. Many believe it is extremely difficult to get a meaningful mindshare of prospective buyers at the auto show. Instead, an exclusive road-show may cost less than half of that spend and companies have access to a meaningful feedback mechanism.
“We reviewed our activity plan in consideration of the various event and show possibilities. For our current priorities and business objectives, we plan to reach out to our target customers through innovative platforms and channels,” Nissan Motor India said.
This is particularly true of commercial vehicles and two-wheeler makers that believe it is more economical to hold media events ahead of the auto show. “It is a car show. … Particularly for commercial vehicle makers, there is no opportunity to interact with the relevant target group,” said an executive at a commercial vehicle manufacturer. The executive added that it made more sense to conduct city tours, and engage with select customers, than spend at auto shows.
Pawan Goenka, MD, Mahindra and Mahindra, is disappointed with the turnout and says that the real estate cost is high, although there is significant value from participating in an event like expo. “One can always debate the returns from an investment like this, but for Mahindra, there is never a question of not participating in Delhi Auto Expo. After all, it is showcasing the might of the Indian auto industry…. Do expect some exciting stuff from Mahindra at the Expo,” added Goenka.
Vikram Kirloskar, vice-chairman of Toyota Kirloskar who has previously been the president of industry body Siam, told ET that he is extremely disappointed with big names missing out. Unclear long-term policy roadmap and frequent regulatory changes made it difficult to introduce new products, and that in turn prevented wider participation, Kirloskar said.
“This is one of the largest Auto shows in the world. I am disappointed to see that people are not participating,” said Kirloskar.
Gaurav Vangaal, senior analyst for forecasting at IHS Markit, says that India is not a small auto market and that companies should not ignore such a major event.