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Rollercoaster year paves way for an optimistic 2015

Murali Gopalan | Updated on March 12, 2018

Year of change SIAM shifted the venue of the 2014 Auto Expo to the India Expo Mart in Greater Noida. It was a draining year for the sentimental as the plug was pulled on the Maruti 800 and the Ambassador. Both these cars had cult-level status in India for the last several decades.



The auto industry is fairly confident of good times next year with a slew of releases in the works from various manufacturers

With less than a week to go before the curtains are down on 2014, the auto industry will have reason to feel hopeful about the road ahead. After all, there are favourable tailwinds such as a pro-business Government in place, gradual improvement in customer sentiment and the global community betting big on the India growth story.

These sentiments are in stark contrast to the beginning of 2014 when manufacturers were concerned about an economy that desperately needed to be put back on track. Commercial vehicle sales were in free fall mode while carmakers were not too happy either. The biggest concern was the perceived rudderless state of a scam-hit Government making headlines across the world.

Sombre start

The year started off on a tragic note for the auto industry with the news of Karl Slym’s death on January 26. The body of the Tata Motors’ Managing Director was found on the fourth floor of a hotel in Bangkok suggesting that he had fallen from his room on the 22nd floor.

Whether the fall was accidental or deliberate was secondary to the harsh reality of Slym not being around any longer. It was especially numbing for those who knew him well and were familiar with his wit and ability to get along with people. Slym was just a fortnight away from his 52nd birthday and his death sent shock waves through industry circles.

The new venue of the Auto Expo perhaps was the best balm in this grim backdrop. The Society of Indian Automobile Manufacturers (SIAM) had pulled out all stops in its efforts to showcase this event at Greater Noida near Delhi. Visitors were no longer subjected to unruly crowds, filthy toilets and creaky halls, as was the case with the previous venue at Pragati Maidan.

Swansong for the icons

For sentimentalists, it was difficult to digest the news that Maruti had decided to stop making the iconic 800 model which had first hit the roads three decades ago. Nobody had a clue that few some months down the line, Hindustan Motors will make a similar announcement relating to its trusty Ambassador. Maruti had long found an ideal entry car replacement in the Alto and was moving ahead with new models such as the Celerio and Ciaz.

HM, on the other hand, knew that the Amby’s time was up and there was no way it could continue operations at its Kolkata plant where over 2,000 workers were rolling out a few hundred cars each month. Old-timers groaned hearing news of the Amby’s demise but, like the Premier Padmini (whose presence is confined to a few thousand cars in Mumbai’s taxi fleet), this was but inevitable. The BJP’s victory at the elections, and Narendra Modi’s elevation as Prime Minister, was the change industry was so desperately craving for all these months. The previous regime had given a welcome parting gift in the form of lower excise duties in its Interim Budget and the new BJP Government decided to extend this beyond June 30 to the end of this calendar.

Bridging petrol-diesel gap

Global crude oil prices were also falling and this was welcome news from the viewpoint of controlling the fiscal deficit. The Centre finally bit the bullet and freed diesel prices. As a result, automakers were no part of a subsidised ecosystem which caused buyers to queue up for diesel vehicles since the fuel was cheaper. Petrol has staged a strong comeback lately and the gap with diesel prices is now down to less than ₹15 per litre.

Automakers have also seen leadership changes though the year with the most prominent being Mayank Pareek quitting Maruti and taking over as President of Tata’s car business. Marc Nassif wrapped up his tenure as Renault India chief with his replacement being Sumit Sawhney.

Naomi Ishii took charge as MD of Toyota Kirloskar while Nissan roped in Guillaume Sicard as President of its Indian operations. Reporting to him is Arun Malhotra, who quit Mahindra and took over as MD. Volkswagen, meanwhile, saw Thierry Lespiaucq take over as Sales MD while Mahesh Kodumudi was elevated to the role of Group Chief Representative in India.

Positive outlook

Industry believes the good times are going to roll in the coming months. Medium- and heavy-commercial vehicles are tipped to grow at 15 per cent this fiscal. Car sales could be flat but Maruti, Hyundai and Honda have done particularly well as also luxury brands such as Audi, Mercedes and BMW.

In the two-wheeler space, Hero and Honda have been surging ahead with TVS staging a strong comeback in scooters. Mahindra announced its buyout of Peugeot Scooters and it will be interesting to see if this spills over into a car alliance in the coming years. With global automakers focused on India and China (with Brazil and Russia not in the best of shape), 2015 has the potential to see good growth across segments.

Published on December 25, 2014

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