Auto Expo 2023 | Tata Motors, Maruti adapting to evolving consumer demand: Jefferies

Tata Motors displayed a strong focus on electric vehicles (EV) and Maruti Suzuki seemed to be transforming itself to meet new consumer aspirations, according to a report by Jefferies.

There was a visible shift towards green fuels, in passenger vehicles (PVs) and commercial vehicles (CVs) “with OEMs (original equipment manufacturers) developing powertrains not only for BEVs, but also for hydrogen and CNG, and ethanol blending”, noted the brokerage’s analysts, in their report on the takeaways from the Auto Expo. The expo is being held at New Delhi and Greater Noida till January 18.

Also read: The latest news in markets and analysis here

In commercial vehicles, trucks that are fuel-cell electric vehicles (FCEV) and that run on H2 ICE (with a modified ICE engine and uses hydrogen as fuel) were on display. “While FCEV is an environmentally cleaner solution, H2 ICE is more economical and could pave the way for a big reduction in emissions in CVs as per the OEMs,” wrote the analysts.

In passenger vehicles, the analysts noted Tata Motors’ plans to increase the share of EVs’ in total volumes to half by 2030 and Maruti’s “strategic shift to address rising consumer aspirations”. The brokerage’s top auto picks are TVS Motor (TVSL), Maruti Suzuki (MSIL), Tata Motors (TTMT) and Eicher Motors (EIM).

Growing from 10 percent to 50percent 

The analysts noted that Tata Motors, which has been in the forefront of electrification of passenger vehicle (PV) segment in India and commanding over 80 percent of the domestic market with its three vehicles, “plans to aggressively expand its portfolio over the next three years to maintain its lead over peers”.

At the expo, the company had on display three new EVs at the expo: an electric SUV Harrier, built on second-generation EV architecture; another electric SUV Sierra; and the born-electric Avinya, built on the company’s third-generation EV architecture. While the first is expected to be launched by 2024, the second and third are expected to be out by 2025. Tata Motors also displayed the ICE version of its Curvv SUV, which will have an EV variant too, according to the report.

The analysts quoted media reports on Tata’s plans to launch EV versions of its existing small SUV Punch and hatchback Altroz, and said that the company expects share of EVs in its total India PV volumes to rise from 10% in 3QFY23 to 25 percent in five years and 50 percent by 2030.

“We remain positive on Tata’s EV strategy and believe the company should gain market share in Indian PV industry with rising EV adoption. Besides EVs, Tata showcased a twin-cylinder CNG technology that significantly increases the available boot space for these vehicles, a key limitation in most existing CNG vehicles,” they wrote.

Also read: Tata Motors looks to play across auto segments

Changing Maruti

About Maruti, the analysts noted how the company was strengthening its product portfolio in the SUV segment with the launch of Fronx (a compact SUV) and Jimny (five-door off-roader SUV). Though the prices for the two have not been revealed, the company is taking booking for them. Besides, Maruti also showcased a midsize electric SUV — eVX — with 60kWh battery, 550km range, and expected to be launched in 2025.

“The launch of mid-sized SUV Grand Vitara in 2022 along with two new SUVs and a long-range EV concept at the expo, in our view, are increasing signs of a strategic shift at Maruti to complement its historical focus on affordability with an intention to address the rising aspirations of Indian consumers,” the analysts added.