Covid Outbreak May Impinge On Carmakers’ New Product Plans
The year 2020 was anticipated to be a significant one for carmakers with multiple rollouts of models lined up post the Auto Expo in February. However, thanks to the ongoing pandemic it will be a contrasting situation as only a handful of variants will be hitting the market and that too when production reaches pre-Covid levels.
A source on condition of anonymity has revealed that many car brands are planning to delay their new product launches due to the current uncertainty of the lockdown and as well as the health of the economy. Furthermore, a number of mass-market models like Tata Gravitas, all-new i20, next-gen Celerio, Yaris hatchback, etc, are unlikely to be available during this financial year.
“The entire product development cycle of certain new models including the all-new Celerio, Tata Gravitas, all-new i20, etc., are being pushed back by a few quarters,” revealed a well-informed source requesting anonymity.
However, when approached by BW Businessworld, none of the carmaking companies either confirmed or denied the development. While Maruti Suzuki maintained that as a policy it doesn’t give any guidance on product plans, Hyundai Motor India and Toyota Kirloskar Motor didn’t revert until press time. Tata Motors spokesperson maintained, “We will reach out to you once we have information to share on the said subject.”
“Product developments across the OEMs will get delayed. They may have to rejig on their product portfolio plan and new model plan. The launches expected in 2020 - 21 may get delayed by six months to a year depending upon the localisation content of models. The cash flow issues at suppliers will further mount pressure resulting in a delay in plans, “said Puneet Gupta, associate director, IHS Markit.
Meanwhile, media reports have suggested that all the automakers have decided to not resume production even if their manufacturing facilities are declared green zones owing to bottlenecks related to supply chain, reverse labour migration, and a stockpile of models at the factories and dealerships. Most of the carmaking firms do not intend to begin production even if the lockdown is lifted on 3rd May.
“For any new product or a major facelift/avatar to be launched, any automaker will be highly cautious. What is the point of announcing when the vehicle will not be available for sale? Also, the automakers are yet to assess the actual financial impact on their operations, which I presume will be so shocking to most that they will take some time to recover. Yet, the brave ones might use the new launch as a strategic way to a quicker recovery as soon as business re-starts. But then, most automakers in India are not so brave and prefer to tread the 'safer' path,” maintains Avik Chattopadhyay, co-founder at brand consulting firm Expereal.
