Mega auto sector deals in the slow lane as Covid scuttles plans

The pandemic hasn’t just wiped out Motown’s sales: It has either scuttled or delayed the conclusion of mega deals in one of the world’s biggest auto markets.

First up is the Ford-Mahindra JV. That’s already delayed by a quarter, while Tata Motors’ talks with a potential partner have hit the Covid bump. General Motors, which has exited India as a sales market, hasn’t yet been able to hand over its Talegaon facility to China's largest SUV maker Great Wall Motors. That may well spill intonext year, pushing back the brand’s entry into India.

Product launches, too, have been shelved – across segments and manufacturers. Maruti Suzuki’s all new small car codenamed YNC or new generation Celerio, and small SUV Jimny will only come next year. Hyundai Motor India's new generation Elite i20 has been pushed back by a couple of months. Mahindra & Mahindra has seen its new gen Thar, mid-size SUV Z101 and premium SUV W601 delayed by six to nine months.

Tata Motors SUVs Gravitas and H2X are likely to see delays of three to six months with one of the two new products being moved to 2021. Renault-Nissan SUVs planned for the second half of 2020 have several months’ delay.

These models would have played a big role in reviving sentiment for individual brands and accelerating industry-wide recovery.

At the Q1 earnings conference, Pawan Goenka, MD of Mahindra & Mahindra, said that the joint venture with Ford is yet to get a clearance from local authorities in Tamil Nadu and Gujarat.

M&M said that the formalization of its JV with Ford has been delayed to October from its earlier stated plan of July, although synergy exercises are continuing.

Tata Motors did not offer any timelines on securing a strategic partner, and a spokesperson said the company doesn’t have fresh updates on the upcoming products.

"In March 2020, Tata Motors announced its intent to subsidiarise its PV business as the first step towards securing mutually beneficial strategic alliances that provide access to products, architectures, powertrains, new-age technologies and capital. However, it is not an imperative for today but an opportunity to be secured for tomorrow," added the spokesperson.