Auto Expo 2018: Big brands opt out; is the biennial show losing its mojo?

OEMs say that after losing business and money on transition to GST and BS IV, players are cautious about investments in branding and marketing this year

India's largest automotive show, and one of the largest in the world, the '2018 Auto Expo: The Motor Show' has seen subdued interest from original equipment manufacturers (OEMs) of late -- some major names have also opted out of the show this year. While all seemed to agree that it was indeed a great show and in a diverse market like India the Auto Expo was definitely the place to be to make a mark, players felt the mind-share or the return on investment was not high given the growing costs. 

This year big names and marquee brands like the Harley Davidson, Fiat Chrysler, Volkswagen, Triumph Motorcycles, Ford, Volvo, Nissan, Daimler have given it a miss apart from Indian brands like Bajaj Auto, Royal Enfield. 

"The Auto Expo is a great place to be and everybody needs to participate. However, this year we have lost money during the transition to the GST and the BSIV regimes, and we are being a bit cautious about investments. We hope to be back next year," said Vimal Sumbly, Managing Director of Triumph India. 

The Society of Indian Automobile Manufacturers (SIAM), however, felt that the reason why some OEMs have opted out is different - they do not have many models to showcase this time. "Owing to the transition to BS VI, many makers are not launching any new platform now. This is a reason why many such makers have not seen sense in participation this year," said Sugato Sen, Deputy Director General, SIAM. 

He added that going by footfalls, which runs into over 100,000 visitors on an average per day, this is the largest auto show in the world and is primarily a branding event for OEMs and a business generation event for component makers. 

A global luxury brand felt that beyond the press events in the first two days, the audience that visits the show in the remaining days is not really relevant for a luxury brand. "In Greater Noida, the crowd that visits the show comprises primarily college goers and while it can create some brand recall, but this is not really a relevant crowd that would buy the brand," he said. 

Sen, however, seemed to disagree. "When the show was organised at the Pragati Maidan which is in the heart of the city, any random passerby would drop in. At Greater Noida, however, only the true auto enthusiast and a potential buyer is dropping in. In 2016 around 600,000 people had visited the show," he said. 

The Expo that started in 1986, was moved to  India Expo Mart, Greater Noida in 2014, about a one and a half hours drive from Delhi.  

Add to this the cost - a 3,000 square feet space costs around Rs 5 million (Rs 50 lakh) for seven days. Then there is cost of creating the experience zones and many brands also opt for bringing in celebrities (a topline celebrity costs around Rs 3-4 crore for a visit to the show). For two-wheeler majors, the cost may range from Rs 20-50 million (Rs 2-5 crore) depending on what kind of experiential marketing it opts to do, but for cars and commercial vehicle makers, it may run into Rs 100-120 million (Rs 10-12 crore) or so. 

For brands that are not well known in the country, the Expo is the right place to make a splash. 

OEMs also point out that the Delhi Auto Expo is not a sales event - in some other international shows like the Bangkok or the Tokyo Motor show, consumers may book the vehicle that they want to. "If this is converted into a sales event too where OEMs may come up with special offers, the crowd that visits the show would change and it would make much more business sense," said a senior official of an OEM on grounds of anonymity. 

It was also important that besides showcasing global models (which never come to India), the makers showcase models which would be launched for the Indian market soon, felt some.