After a year that saw a revival in some segments, the automobile industry will be looking ahead to more broad-based and sustainable growth. 2016 will also be marked by a slew of new launches in the compact sport utility vehicle segment. The year may also see the industry scrambling to adjust its strategies to comply with new regulations, some of which have already kicked in.
TRENDS TO WATCH
Body blow for diesel vehicles
The ban on the registration of diesel vehicles by the National Green Tribunal (NGT) in the National Capital Region is likely to hit sales of diesel vehicles in a big way. This will particularly impact companies like Mahindra and Mahindra Ltd that has a diesel-heavy product portfolio. A recent ruling by the Supreme Court which bans diesel passenger vehicles with engine capacity of 2000cc or more will also impact the luxury car firms.
Scrappage policy booster
The government’s proposed scrappage policy which includes phasing out 10-year old vehicles including trucks and passenger vehicles will boost volumes. As part of this policy, the government will offer incentives of up to Rs.1.5 lakh to consumers to purchase new trucks and cars if they scrap their old vehicles for new ones.
Utility vehicles rule
The share of utility vehicles in the overall passenger vehicles mix will rise steadily with a raft of new models by firms including Maruti Suzuki India Ltd, Mahindra and Mahindra Ltd, Honda Cars Ltd and Toyota Kirloskar Motor India Pvt. Ltd hitting the roads over the next one year.
Penetration of models with automatic and automated manual transmission will increase further and at a faster pace, as buyers prefer them over manual transmission vehicles to navigate India’s congested roads. Vehicles based on clean technology may also gain mileage. Demand for hybrid/electric vehicles in the big sedans segment and the multi-purpose vehicles segment may see an increase as auto firms sharpen their focus on clean technology.
More premium brands
Buyers of luxury cars will get more to choose from this year. Local arms of foreign car makers are planning to drive in premium brands such as the Hyundai Genesis, the new Honda Accord and the Toyota Prius as they seek to garner a share of the top end of the market.
COMPANIES AND PEOPLE TO WATCH
Mahindra and Mahindra: The firm will launch its all-new compact SUV KUV100 to take on the Hyundai Creta, Ford EcoSport and Renault Duster. It will also unveil a new range of petrol engines as it seeks to reduce dominance of diesel-run models in its portfolio following the recent orders by the National Green Tribunal and the Supreme Court.
Maruti Suzuki India: Maruti is set to launch its first compact SUV codenamed YBA as part of a strategy to strengthen its hold in the overall passenger vehicle market. It’s also likely to drive in the new Vitara. Maruti will also be looking to extend a strong pickup in volumes it saw this year.
Tata Motors: The company is set to introduce at least three new models including the Zica compact and sedan models, Nexon compact SUV and Hexa crossover as it seeks to resurrect its fortunes in the competitive passenger vehicle market. Its attempts so far have met with only lukewarm success. The company will also be looking ahead to a broader revival in the commercial vehicle segment as industrial activity picks up.
Toyota Kirloskar Motors: The local arm of the Japanese firm which hasn’t introduced a completely new model since 2010 will launch the new generation of its flagship model Innova in 2016. It is also likely to unveil the premium sedan Vios which will be pitted against the Honda City at the Delhi auto expo in February.
Fiat India: The beleaguered arm of the Italian carmaker is set to start its India innings afresh, yet again. The company will unveil and subsequently launch the premium brands from the Chrysler stable such as Jeep for the Indian market.