Deepak Jain of Lumax Industries puts it succinctly: “It is an India-cooked story, and has to, therefore, be an India-fixed story.”
The Managing Director of the country’s leading automotive lighting company, like many others in his fraternity, has no idea how long the slowdown will last. But what he does know is that it is going to be a painful crawl back from an abyss.
Whether this will take six months or two years is the million-dollar question.
The bigger concern for Jain and others in the industry is the uncomfortable prospect of terminating the services of contract workers.
This is already happening with some automobile companies and the numbers could only increase as the order books dry up.
Sandeep Singh, Deputy Managing Director and Chief Operating Officer, Toyota Kirloskar Motor, expects numbers at his company to fall by 10 per cent this year.
At best, the good monsoons, coupled with the festival season sentiment in November, could briefly reverse the tide.
SUV decline
Sumit Sawhney, Executive Director (Marketing & Sales), Renault India, believes it is going to be a challenging task ahead. The French automaker was on a roll with the Duster SUV, which, at one point, clocked over 6,000 units in a single month.
Not only have volumes fallen significantly since then, but the industry’s overall SUV sales have been falling over the last couple of months.
Numbers have been averaging 35,000 units in July and August, a near 25 per cent fall from the same period last year. And this fall is happening despite the entry of new models, such as the Ford EcoSport.
Among the few exceptions to this grim script is Honda, which has been doing brisk business both in its cars and two-wheeler businesses.
Jnaneswar Sen, Senior Vice-President (Sales & Marketing), Honda Cars India, says the recently launched entry-level sedan, Amaze, continues to get the big numbers.
Since its launch in April, it has already notched sales of over 30,000 units though there has also been a distinct shift in fuel preference.
For a while, there was a clamour for diesel but now, petrol is getting back into the spotlight thanks to the reducing price differential between the two fuels.
When it was launched five months ago, the diesel version of the Amaze accounted for 81 per cent of sales. Today, that has come down to 68 per cent, with the petrol sibling taking up a third of total numbers.
Fuel price hikes
Yet, Sen is not entirely sure if the trend will continue. “Petrol prices were only hiked recently, which has increased the gap with diesel. There could be another shift happening for all we know. Yet, Honda can comfortably meet any variation in demand,” he says.
Likewise, Y.S. Guleria, Vice-President (Sales & Marketing), Honda Motorcycle and Scooter India, has every reason to smile with the company crossing the three-lakh unit mark in sales in a single month.
“We are upbeat about the future and are confident of bigger numbers,” he says.
Honda Motorcycle and Scooter India has three plants (Haryana, Rajasthan and Karnataka) with a combined capacity of four million units, which will be enhanced to 4.6 million by the last quarter of this fiscal.
The fourth facility is likely to be commissioned in Gujarat. However, the company has not made any formal announcement to this effect.