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We attended the 16th Auto Expo, 2023, held at Greater Noida, NCR, to feel the pulse of things to come in the Indian automobile sector. After a gap of three years for known reasons, India’s flagship automobile show returned, with OEMs showcasing coming models, exciting concepts and future technologies. Adding to the existing 84 brands (SUVs 44, PCs 33, MUVs 7) and 694 variants (381 SUVs, 184 hatchbacks, 94 sedans, 35 MUVs) in passenger vehicles, the AE’23 displayed ~20 new models, which would add ~150 variants in the near term. The SUV segment continued to see the most model launches, refreshes and fuel options, while the hatchback and sedan segments were mostly limited to model refreshes and alternative fuel options on existing ICE platforms. Our view. Competitive intensity has increased significantly and maintaining/ gaining market-share would be challenging. The choice of products for customers is expected to be more complicated as new launches come with more variants and price overlaps. We prefer PVs over 2Ws, while CVs are still the best pick to navigate the medium term regulatory/ tech disruptions.

Key highlights

* SUVs and EVs are the dominant theme. Continuing from the last AE show, most OEMs had either new launches or concepts in these two themes.

* Maruti bridging the gap. The market leader launched Fronx and Jimny in SUVs, and showcased its full electric SUV ‘EVX’, which would be launched at AE’25.

* Hyundai charging up the Indian PV space. Hyundai showcased its much-awaited Ioniq series EVs, along with various fuel-option vehicles.

* Toyota expanding its portfolio. Toyota showcased the Innova Hycross in MUVs alongside its Land Cruiser series.

* Tata adding to its EV/ICE range. Tata showcased the much awaited Sierra EV concept, an ICE version of the Curvv concept, the highly anticipated Harrier electric SUV alongside Punch EV and Altroz racer.

* KIA beefing up its presence. KIA showcased the Carnival KA4, along with its all-electric concept, EV9.

* MG back with refreshes. MG refreshed its Hector and Hector Plus brands with a much needed refresh and latest features.

* Other interesting launches. Makers such as BYD, Lexus and others showcased a few models.

* Post the GST implementation the SUV segment continued to grow strongly in the last five years, recording a ~29% CAGR over FY18-22.

* From the 44 models (381 variants) in Jan’23 domestically, four (~55-60 variants) are being added while ~10 are being refreshed with new features and technology. We expect the SUV segment to be further saturated with ~450 variants across sub-segments.

* Maruti showcased the Fronx and Jimny along with the full electric EVX concept. As it ramps up production of Grand Vitara, launches Fronx and Jimny in the near term, we believe it would further generate 22,000-25,000 volumes ahead and improve its overall market share to ~45% by FY25 (vs. FY23’s 42.6% ytd). We believe the present Baleno hatchback would not be cannibalized by Fronx as we believe the hatchback has a pre-determined customer.

* Tata showcased the much-awaited Punch EV. It plans to double its monthly EV volumes to 8,000 to 10,000. This is the most affordable electric PV in India today, ~Rs1m ex-showroom, Mumbai. It has secured 20,000 bookings and Tata expects its EV volumes to reach 100,000 units a year by FY24. It also displayed three concepts: Curvv, Sierra and Harrier.

* Koreans beefing up their presence. KIA showcased its Carnival KA4 alongside Sorento and the EV9 concept, while Hyundai showcased its Ioniq series alongside its hydrogen cell crossover, the Nexo.

* Hyundai is also working on an electric version of Creta, which would compete with Maruti's EVX and is expected to be launched along with Maruti in 2025. It is targeting 20,000-25,000 units a year, similar to Maruti.

* MG refreshed its existing lineup by refreshing Hector and Hector plus brands.

* Other interesting launches: Lexus RX

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