'Auto OEMs will have to show responsibility towards cleaner mobility'

Tarun Garg, Director of Sales, Marketing & Service - Hyundai Motor India Limited, shares his insights on key trends in consumer behaviour, transition towards cleaner mobility and future expectations

e4m by Simran Sabherwal
Updated: Mar 15, 2021 1:59 PM
Reimagining the Indian Auto Industry’s Future

MIRROR NOW, in collaboration with exchange4media Group, is curating a series of video interviews, ‘MIRROR NOW Dialogues with VinayTewari’. In the second part of this series, Vinay Tewari, Managing Editor, Mirror NOW interacted with Tarun Garg, Director- Sales, Marketing & Service - Hyundai Motor India Limited on the topic "Reimagining the Indian Auto Industry’s Future". 

While the automobile sector was already undergoing distress in the pre-covid era, the virus spread further pushed the automobile industry towards the negative end of the graph. However, with public transport being completely stilted for a couple of months last year, there was also an upsurge in consumer demands for personal mobility. Speaking to Tewari, Garg shared his insights on the key trends in consumer behaviour, the transition towards a cleaner mobility, the need for localisation, expectations from the future, etc. 

The session opened with Tewari asking Garg to sum up how the year 2020 panned out for the automobile industry. According to Garg, some strong and surprising trends have been observed in consumer behaviour. He said, “While we thought that with the economic distress, consumers would buy only entry-level cars, downgrade their purchases or wouldn’t buy a car, Indian customers have proved us wrong. They have shifted to personal mobility as a safe mode of transportation especially with the economy opening up. Even the trend for SUVs has been ever-increasing. Last year SUVs contributed to 29% of the total sales in the automobile industry.” Garg also shared that consumers are looking forward to connected cars and the overall demand has been fairly good. 

Talking about the BS-VI (Bharat Stage Emission Standards) norms mandated by the government last year, Garg states that the auto OEMs will have to show responsibility towards cleaner mobility in terms of newer technologies. He adds, “At 26-27% car penetration, while India is far from saturation, the responsibility towards cleaner mobility is important and that movement has already begun. We have been able to manufacture BS-VI engines for petrol, diesel and CNG. We are also happy to see the hydrogen mission in the budget as we sell the Hyundai Nexo in Korea and other countries, and are setting the feasibility in India now.” 

With the government of India pushing electric vehicles and safety measures, an increasing price will build pressure on the price-sensitive Indian consumer. Commenting on the same, Garg added, “The consumer is also evolving. When the transition from BS-IV to BS-VI happened, even that led to an increase in cost. Consumers have become more mature to understand the importance of these additions.” 

A parliamentary panel recently suggested the government decrease the GST levied on cars and have a separate department for automobiles. Commenting on whether it’s a good time for the same and will it will help the industry recover, Garg added, “While we have full confidence that as and when the government thinks that this has to be done, they will do it, but as OEMs, we cannot just wait for it to happen. We have to see what we can do in terms of new models and technologies to really make sure that the customers are interested, engaged and are coming to us. ” 

Sharing insights on whether there is a set formulaic winning model that conquers all factors determining the success of a car in India, Garg said, “The decision to launch a new model has to be taken 3-4 years in advance of the launch date. It is therefore extremely important to properly study customer trends. To have a sense of what the customer is thinking and what they are going to need four years down the line, and then also taking a risk while doing that is what is important. The second thing is not taking too much time to launch a new model, OEMs have to align their strategy in line with consumer expectations.” 

The waiting times for some popular cars in India is currently sitting at about six-eight months due to supply chain disruption. The disruption has been caused by the global shortage of semiconductors which is imported in India. Commenting on whether the Indian automobile and component manufacture industry should look at a more ‘Atmanirbhar’ approach, Garg said “Hyundai has always believed and is quite high on the localisation front. The pandemic has taught us that the smallest of the component can derail all your plans. However, this is a global shortage and we are working very closely with our suppliers to see how fast the balance part of the imported content can also be localised.” 

Concluding the session with the way the automobile industry will pan out going ahead, Garg explained, “Currently the vaccinations are going well, interest rates are low and the demands are high and the pandemic has taught us to be agile and flexible. However, there are also challenges that still remain like the second wave of pandemic hitting, increasing fuel prices, etc. So we have to really see month by month, but the optimism is at a good level. We just have to work in order to ensure that we are able to deliver cars to the consumer’s demand.”

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