Sector Update | 7 February 2020
Automobiles
Auto Expo 2020: Chinese OEMs debut in PVs
Action in EVs and SUVs
We attended the 15
th
Auto Expo 2020 (AE20) held at Greater Noida, NCR. AE20
marked the entry of several Chinese OEMs in the Indian market and the focus on
the dominant theme of SUVs and EVs (and e-SUVs). While not many of the
showcased products of these new players (incl. Kia) would be launched in India
over the next two years, their focus was on highlighting the technological prowess.
However, it was very much evident that all new entrants were focusing on PVs at
>INR1m range, avoiding direct competition with Maruti Suzuki (MSIL). None of the
major 2W players (except Suzuki) participated in the expo. Key highlights:
Chinese OEMs’ India entry imminent:
Several Chinese OEMs, including MG
Motors, Great Wall Motors (GWM) and Haima, participated in AE20 for the first
time to showcase their products/tech capabilities. While MG Motors entered
Age profile of visitors at the Expo –
the India market in CY19, GWM/Haval and Haima (partnering with Bird Group)
60% of visitors below 30 years of
are preparing for launch in the country this year. Kia too showcased its future
age (%)
products for India – the most notable was the compact SUV Sonet concept.
PVs’ focus on SUVs/EVs:
As expected, two major themes of AE20 were EVs and
SUVs. All OEMs had either launches or concepts in these two themes. The most
prominent EV products were M&M e-KUV100 (launched with a focus on fleet),
e-XUV300 (CY21 launch), and Tata Motors (TTMT) e-Altroz and GWM R1 (both
e-hatchback). In SUVs, the prominent launches were Kia Sonet (compact SUV to
be launched in 2HCY20), Skoda Karoq (Apr’20 launch) and VW Taigun (CY21
launch). MSIL and Hyundai launched the revamped Brezza (Petrol) and Creta.
Maruti Suzuki – green theme with focus on CNG/hybrids; no major launches:
MSIL’s theme for AE20 was ‘Mission Green Million’, targeting sale of 1 million
green vehicles (CNG, hybrids and EVs) over the next few years. In terms of new
products, there wasn’t much to highlight, though the company showcased
Futuro E Concept (e-coupe SUV). It launched Brezza Petrol with minor
modifications over the outgoing Brezza Diesel. Also, it launched E-Presso CNG.
Tata Motors – impresses again with mix of upcoming launches/interesting
Occupation profile of the visitors - %
concepts:
TTMT’s impressed again with its product pipeline on PVs. While it
showcased upcoming Gravitas (6 seater mid-sized SUV), the HBX concept
(micro-SUV) appeared promising. It also showcased e-Altroz/Sierra EV Concept.
M&M – showcases upcoming EVs/BS6 petrol engines:
While M&M did not
show any of its upcoming product launches on the ICE side, it unveiled a range
of EVs – of significant interest was e-KUV100 (launched at Expo at ~INR825k for
fleet use) and e-XUV300 (CY21 launch). The company also showcased its BS6-
ready petrol engines. On e-3Ws, it showcased the Treo Zor concept for cargo
(0.5 ton payload), and Treo with a range extender and solar roof.
Valuation and view:
AE20 marks the phase-2 of competition for the Indian PV
segment (phase-1: 2010-12) with increasing interest from the Chinese/Korean
OEMs. This new phase of competitive entries is coinciding with disruption in the
tech landscape (EVs), which has the potential to influence competitive dynamics
of the industry. We believe that the impact of these on incumbents like MSIL
will be solely dependent on the pace of adoption of EVs. We would continue to
Jinesh Gandhi - Research analyst
(Jinesh@MotilalOswal.com); +91 22 6129 1524
Aanshul Agarawal - Research analyst
(Aanshul.Agarawal@MotilalOswal.com); +91 22 7193 4337
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.