Home Business Business Weak demand shifts auto launches to ’21

Business Weak demand shifts auto launches to ’21

Business

Shortage of skilled workers and parts imports is hampering production. HT (MINT_PRINT)

2 min read

. Updated: 23 Sep 2020, 06:26 AM IST

Malyaban Ghosh, Amit Panday

Auto firms are worried that weak consumer sentiment will impact vehicle demandWhile launches of PVs have been deferred by six months, those of two-wheelers have been put off by at least a quarter

Tata Motors Ltd, Mahindra and Mahindra Ltd, Renault India, Nissan India, Groupe PSA and Royal Enfield are among passenger vehicle and two-wheeler makers in India who have deferred new product launches to 2021 as they battle weak demand and disruptions in global supply chains due to the coronavirus pandemic, said four people aware of the developments.

While most of the planned launches of passenger vehicles have been deferred by at least six months, those of two-wheelers have been put off by at least a quarter, the people cited above said, seeking anonymity.
For instance, Tata Motors has delayed the introduction of its compact sport-utility vehicle (SUV) codenamed HBX from the ongoing second quarter to the March quarter. Renault India was also expected to join the compact SUV bandwagon this year but has decided to defer the launch of its vehicle to 2021. Alliance partner Nissan has also delayed the launch of its compact SUV Magnite to the March quarter from this festival season.
Meanwhile, Mumbai-based M&M has rolled over the introduction of its next-generation Scorpio and XUV500 SUV models to next year due to supply-chain issues. One of the products will be launched in the June quarter and the other in the September quarter, said the first person mentioned above.
Groupe PSA had planned to mark its re-entry into the Indian market with the Citroen C5 Aircross SUV in September. The French automaker has postponed the launch to the March quarter, according to a company statement.
Automakers are concerned that weak consumer sentiment amid widespread job losses and pay cuts in a contracting economy could potentially hit vehicle demand. Shortage of skilled workers at both vendors and original equipment manufacturers as well as the impact on parts imports is also hampering production.
“Consumer and business confidence are at the lowest. Seeing the uncertainty, most OEMs have delayed model launches by up to 4-8 months. Launches involve huge investments and, thus, OEMs may prefer to wait for the right time to maximize returns on investment,” said Puneet Gupta, associate director, IHS Markit.
Automakers and their suppliers had to stop production, and research and development activity from 22 March due to the lockdown. Till July, most firms were sorting out issues related to supply-chain network, which remained disrupted due to intermittent lockdowns in some states.
“On upcoming models, we have two SUVs in the pipeline—the seven-seater SUV on the Omega ARC code-named Gravitas, and the sub-compact SUV on the Alfa ARC, code-named HBX,” a Tata Motors spokesperson said.
A spokesperson for M&M said the management has guided that the new XUV500 and Scorpio will be launched in FY22. “We are on track to deliver a highly aspirational and value-based product,” said a spokesperson for Nissan India.

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