With Hero, M&M and top brands pulling out, Auto Expo’23 may be a no-show affair
Expensive set-up costs, an unfavourable venue location, little return on investment and lukewarm sales keep prominent auto companies away
Volkswagen, Skoda, Hero MotoCorp, Bajaj Auto and Mahindra and Mahindra (M&M), etc., have decided not to participate in the upcoming 16th edition of Auto Expo, robbing the event of much of its sheen.
The non-participants specified no reasons. Automobile industry sources cited numerous factors such as expensive set-up costs, an unfavourable venue location in India Expo Mart in Greater Noida, little return on investment, lukewarm sales (of fringe players) and insignificance of the event as the key factors.
“The main reason to not participate is that it has gone from the point from where it used to be at Pragati Maidan (in New Delhi). Earlier, it was an event on a grander scale,” said an executive of a multinational carmaker requesting anonymity.
“Now it has shifted to Greater Noida which has resulted in decrease in the number of footfalls. Also, the return on investment has been impacted as we are not able to attract the right kind of crowd who are auto enthusiasts and used to visit Pragati Maidan specially to see our products,” the person added.
“Above all, the venue is so far that logistics has become a challenge. Also the cost of participation is very high. With the same kind of money, I can do a standalone event. Above all, product development cycle has changed.”
Costs
While the organizers charged Rs 9,500 per square metre (revised from Rs 8,900 /square metre in 2016) for a display area for the last few editions, two past participations revealed that the total expenditure by an original equipment manufacturer (OEM) for setting up the stall and making subsequent decorations can cost at least Rs 15 crore to even Rs 25 crore depending on the space allocated.
It has also been learnt that a company like Tata Motors shells out up to Rs 50 crore for booking the entire hall for displaying commercial vehicles and passenger vehicles under the same roof.
Moneycontrol has learnt from sources that VW, Hero MotoCorp, Mahindra Skoda, Jeep, Royal Enfield, Harley Davidson, Jaguar land Rover, Honda, Citroen, Isuzu, Triumph and BMW have decided not to participate at Auto Expo’23, scheduled to be held from January 13 to 18, 2023.
A senior executive at M&M had earlier told Moneycontrol: “We have already had our rollouts before the Auto Expo and went the whole hog in displaying our Born Electric range of EVs at London. Also, by displaying our new ICE (internal combustion engine) vehicles, we don’t wish to project ourselves as a company not focussing on EVs.
“So the best way out is to stay away from the Expo limelight this time.” The person quoted above requested anonymity because of the sensitivity of the matter.
M&M’s official spokesperson declined to comment.
Volkswagen, TVS
Skoda Auto Volkswagen India Pvt. Ltd, which represents top brands like Volkswagen, Audi, Skoda, Ducati, Porsche and Lamborghini, confirmed its exit.
“Our Group brands will not be participating in the Auto Expo 2023. This is in line with the strategic decision taken by the Group globally, with respect to non-participation at motor shows as of now,” said a spokesperson.
While Hero MotoCorp, Royal Enfield, Nissan India, Renault India didn’t respond to queries sent by Moneycontrol, a TVS spokesperson maintained that it is yet to take a final call on.
Senior executives at Honda, M&M and BMW confirmed to Moneycontrol that the chances are few that they will participate. A Bajaj Auto spokesperson claimed that it was too early to comment on its Auto Expo participation.
The Auto Show for vehicles as well as for components is organised jointly by the Automotive Component Manufacturers Association (ACMA), Confederation of Indian Industry (CII) and Society of Indian Automobile Manufacturers (SIAM). A spokesperson from SIAM when contacted, declined to comment.
Paradigm shift
Interestingly, some media reports claimed that more than 20 automotive brands have decided to skip Auto Expo 2023, including the top 5 players of the two-wheeler industry, the top 5 players of the Luxury car market and a few players in the passenger vehicle industry.
They collectively account for 70-5% of the country’s domestic volumes. Moneycontrol couldn’t independently confirm the development as spokespeople from Honda Motorcycles and Scooters India (HMSI) and Mercedes Benz India refused to comment.
Industry experts reckon that even though Auto Expo is an ideal platform to showcase future models and the technology that the OEMs own, the upcoming Expo falls during the time when Indian automotive Industry is going through paradigm shift and most OEMs are in process of reorientating their future roadmap in product lineup and partnerships, said Puneet Gupta of S&P Automotive.
“It’s high time that the whole concept of auto expo needs to be revisited. Startups, new OEMs, customization companies, brand centres, used car players like Cars 24, digital new gen companies, mobility and fleet companies may have better concepts to showcase which can be an attraction for customers in coming years,” said Gupta.
Resource-intensive auto shows
Likewise, Ravi Bhatia of JATO Dynamics feels that the industry is emerging from challenges of last two years and some players may choose to stay away. This is not unique to India and globally OEMs do a hard evaluation before committing as Auto Expos are usually resource-intensive and return on investment cannot always be clearly evaluated.
Asked about resources, he said: “That depends on space design, which in turn depends on the theme and budget. Architects give the cost and number of vehicles displayed and manpower cost for 8 days plus advertising to drive traffic.”
Gupta of S&P Automotive says that the edition in 2025 can be a dream expo when which will see new players, new technologies, new models, new concepts and new partnerships.
A majority of the automotive industry may have given a thumbs-down to Auto Expo, but the regulars and relatively smaller brands like MG Motor and BYD will display new products at the event.
Confirmed participants include Maruti Suzuki, Hyundai, Tata Motors, MG Motor India, Toyota, Lexus, Kia and BYD. The spokespeople of all the companies have confirmed that there will be some product showcases and even launches in some cases at the Expo.
Naveen Soni, president of Lexus India, stated: “We wanted to showcase our next-generation technologies to the masses and Auto Expo is the ideal platform for the same. We have decided to participate at the Expo as that will demonstrate the fact that we are here for the long haul and have the technologies of the future.”
News Source Link