1st June 2020 Auto News 1. Maruti Suzuki sells 13,865 units in the local market in May 2. Auto industry capex falls by a staggering Rs 26,000 crore in FY20 3. Auto majors struggle to convert online bookings to sales 4. Coronavirus impact: Toyota Kirloskar sales dip 86 pc in May 5. Closure of economic activities should have been reviewed carefully: Yamaha 6. Maruti extends warranty, service timelines till June end 7. ETAuto Opinion: Will 'Anti-China' sentiment spoil Sino automakers' fortunes? 1. Maruti Suzuki sells 13,865 units in the local market in May By Sharmistha Mukherjee, ET Bureau, Last Updated: Jun 01, 2020, 10.28 AM IST (Source: The Economic Times) NEW DELHI: The country’s largest car maker Maruti Suzuki sold 13,865 units in the domestic market in May after resuming operations at its manufacturing facilities in Gurugram and Manesar (Haryana) in a graded manner due to the COVID-19 induced lockdown. “Likewise, the company’s showrooms opened in accordance with Centre and State guidelines in a graded manner across different cities. The remaining showrooms would open in due course if they are not in containment zone or if not specifically restricted by any local guidelines”, the company said in a statement. Maruti Suzuki sold 125,552 units in the local market in the corresponding period of the last financial year. The company exported 4,651 units following resumption of port operations at Mundra and Mumbai port, ensuring that all guidelines for safety were followed. The company also sold 23 units to alliance partner Toyota in this period. The company resumed its manufacturing operations post lock down strictly in accordance with the government regulations and guidelines, from May 12th at its Manesar facility and from May 18th at its Gurugram facility. Production also resumed at Suzuki Motor Gujarat Pvt Limited (SMG) from May 25th 2020. SMG manufactures cars on a contract basis for Maruti Suzuki. Top 2. Auto industry capex falls by a staggering Rs 26,000 crore in FY20 By Nandini Sen Gupta, TNN, Last Updated: Jun 01, 2020, 10.07 AM IST (Source: The Economic Times) (This story originally appeared in on Jun 01, 2020) CHENNAI: An 18-month slowdown and the pandemic-triggered lockdown has resulted in a sharp decline in planned investment by the automobile industry. The auto and component industry combined will see its overall capex shrink from Rs 31,750 crore in FY19 to an estimated Rs 26,000 crore in FY20 - a drop of 18%, according to a report by Crisil. Individual segments will however see a much sharper drop as the BS6 transition investment is already in place and the overall auto industry is working with 50% capacity utilisation. "Between this year and next year, auto OEMs (vehicle manufacturers) will see a capex contraction of 30- 35%, whereas component companies may see a contraction of 40-45% depending on their exposure to commercial vehicle market and export," said Anuj Sethi, senior director, Crisil Ratings. The reason is because there are "no major regulation requirements in the next couple of years and even after recovery next year the capacity utilisation will be less than 70% with companies investing only in new model, R&D and electric mobility". Auto makers including TVS and Ceat have announced capex cuts. Ceat has announced a 33% or Rs 250-crore cut in capex to Rs 500 crore, while TVS Motor has announced a capex of Rs 300 crore down 58% from the Rs 719 crore spent last year. Others like Hero MotoCorp have announced they will defer capacity expansion and other investment plans. Bosch has announced that it has cut its capex by half due to slowdown in the auto market amid the pandemic. Auto parts makers' trade body ACMA has announced that parts makers will defer planned capex of around $4 billion till 2022 to preserve cash and tide over demand and supply disruptions due to Covid-19. Top 3. Auto majors struggle to convert online bookings to sales By Lijee Philip, ET Bureau, Last Updated: Jun 01, 2020, 09.01 AM IST (Source: The Economic Times) Mumbai: With the Covid-19 lockdown having brought automobile sales to nil in April automakers pulled out all stops to woo customers. Hyundai, Maruti Suzuki, BMW, Mahindra & Mahindra, Mercedes-Benz and Toyota all recently announced digital car-buying initiatives. However, companies are yet to see online enquiries translate into major sales of vehicles. Dealers are far from convinced about the digital strategy. While online enquiries have gone up in the past few weeks for most manufacturers, they’re not getting converted into sales, dealers said. “Automobiles continue to be an engaging purchase and take a longer time to buy. Web enquiries have overtaken walk-ins and are likely to continue post-Covid days,” said Shashank Srivastava, ED, marketing & sales, at Maruti Suzuki. “Conversion to sales continue to be the highest for referrals on the back of existing consumer loyalty.” Manufacturers said the prevailing conditions are preventing consumers from purchasing cars. The lockdown had stalled economic activity across the country. “There is income uncertainty that is pushing consumers to postpone discretionary purchases,” said Vinay Raghunath, head of auto practice at EY. EY’s recent study mentions that Indian customers prefer online and contactless modes of purchasing, especially while researching vehicles. However, online sales are rare due to limited awareness, options and flexibility. An integrated ‘phygital’ platform with a digitally enabled agile salesforce will become a critical success criterion to tap into select consumer segments. Tarun Garg, director of sales & marketing at Hyundai, which launched its ‘Click to Buy’ online sales platform last January, said that online enquiries are happening, but it's taking longer for consumers to decide and buy. A typical conversion to sales takes more than a month nowadays compared with 15 days earlier. Dealers are hopeful that as the lockdown is lifted, customers will become more confident and start visiting dealerships. Manufacturers have mapped 28 touch points in the car-buying process, from start to final purchase, said Nikunj Sanghi, an automotive dealer. “While we have digitalised almost 25 points, financing, test drives/registration and delivery need a physical interface. Consumers want to physically see and inspect the vehicle before taking delivery,” Sanghi said, adding the business module of physical dealerships won’t be eliminated, especially because registration and final deliveries will happen at the dealerships. Vinkesh Gulati, VP of the Federation of Automobile Dealers Associations, said online sales in the auto industry won’t be easy. Given the Indian auto product line-up, customers will buy vehicles after test drives for quality and performance, unlike their European counterparts. Luxury car maker BMW, which introduced four products during the lockdown, said that while web enquiries have been good, conversion to sales has yet to take place because vehicles could not be despatched or delivered. Mercedes-Benz, on the other hand, got bookings for 100 cars, a mix of new and pre-owned cars, through its online initiative launched last month, but walk-ins at showrooms were lower. Lack of unanimity between car companies and dealers over the online sales approach needs a speedy solution, which would only augur well for the struggling auto industry, experts said. Top 4. Coronavirus impact: Toyota Kirloskar sales dip 86 pc in May PTI, Last Updated: May 31, 2020, 05.07 PM IST (Source: The Economic Times) NEW DELHI: Toyota Kirloskar Motor (TKM) on Sunday reported a 86.49 per cent decline in domestic vehicle sales to 1,639 units in May. The company had posted sales of 12,138 units in May 2019, TKM said in a statement. "We are conscious of the dealer business conditions in various parts of the country and we have been prioritising production at our end as per dealer requirements, both in terms of quantity as well as the grades that they require," TKM Senior Vice President Sales & Service, Naveen Soni said in a statement. The market has been slow and with demand being less, the company has been able to wholesale only 20 per cent of what it would have clocked under a normal situation, he added. "However, retail sales have been much higher when compared to wholesales, thereby helping us reduce the month closing inventory levels at dealerships," Soni said. There has also been a significant surge in customer orders and enquiries online, through digital platforms, he added. Soni said operations have resumed in more than 300 company sales outlets across the country. Top ___________________________________________________________________________ 5. Closure of economic activities should have been reviewed carefully: Yamaha PTI, Last Updated: May 31, 2020, 12.33 PM IST (Source: The Economic Times) New Delhi: Japanese two-wheeler major Yamaha has said that complete closure of economic activities should have been reviewed carefully in a large country like India and a proper road map should have been planned to handle the coronavirus pandemic in the country. The company, which has three plants in the country, said saving human lives is the top priority for any nation but economic activities should not be shut completely. "We must remember that India is one of the world's largest economy and is also the world's largest two-wheeler market. Complete closure of economic activities in this market as well as other markets in the world has led to a massive depression, the worst since Great Depression in 1920s. The recovery period from such depression will take a long time," Yamaha Motor India Chairman Motofumi Shitara told in an interview. A nationwide lockdown was imposed in the country on March 25 in order to prevent the spread of coronavirus.