FADA Journal - November 2017

Office Bearers contents

President PRESIDENT’s MESSAGE 7 Staying on Course
INDUSTRY TRACK 8 Subdued Festivities for Auto Market
JOHN K PAUL
Popular Vehicles & Services Pvt Ltd DECODING GST 11 Key Points of 23rd GST Council Meeting
Kuttukaran Centre, Mamangalam, Kochi - 682 025
Tel: +91-484-234 1134 / 7872 / 5013 OPINION 12 Domestic Wholesale Dispatches in Passenger Vehicle Industry to
E-mail: [email protected]; Remain Strong in Coming Quarters - ICRA

[email protected] PERSPECTIVE 14 Building Digital Car Company of Future
- Boston Consulting Group
Vice President
INSIGHT 18 Riding China’s Huge, High-Flying Car Market
ASHISH KALE E-MOBILITY - McKinsey & Co.
Provincial Automobile Co. Ltd
Kingsway, Near Railway Station, Nagpur - 440 001 20 Oil Industry Sees Threat Grow As Car Choices Multiply
Tel: +91-712-391 1129 / 1150
E-mail: [email protected]; COMPETITION LAW 22 Competition Law Updates - G R Bhatia

[email protected]

CEO

SAHARSH DAMANI
Federation of Automobile Dealers Associations
805, Surya Kiran, 19, K G Marg, New Delhi
Tel: +91-11-6630 4852, 2332 0095
E-mail: [email protected]; [email protected]
Web: fada.in

ADVERTISERS’ INDEX FADA NEWSLINE 23 • F A D A Appoints Saharsh Damani as its 1st CEO
• F A D A Appoints State Chairpersons
Back Cover
V E Commercial Vehicles 60 NEW ON WHEELS 33 • Land Rover Announces Launch of 5th Generation Discovery
UPGRADES & VARIANTS • Honda Rolls Out 125 CC Scooter ‘ GRAZIA’
Front Inside Cover 2 • Renault CAPTUR Launched in India
Tata Capital Financial Services NEWS BASKET
36 • Mercedes-Benz Introduces AMG CLA 45 and GLA 45 4MATIC
Back Inside Cover 59 SURVEYS & STUDIES • Ford India Launches New EcoSport
Tata Motors • Bajaj Auto Introduces Pulsar NS200 with ABS at Rs. 1,09,715

Inside Pages 39 • Volkswagen Expands Footprint in Maharashtra
• Super Performer Next Gen VERNA Outshines
• Mahindra & Mahindra Financial Services 3 • M&M Wins FICCI’s Road Safety Awards 2017
• Mahindra Opens New HQ and Manufacturing Facility in Detroit
• AMPL 4 • Toyota Signs MoU with AP Govt for Feasibility Study on EVs

• HPCL 6 & 38 42 • Maruti Most Considered Brand for 13th Consecutive Year: J D Power
• Hyundai Ranks Highest Among Mass Market Brands: J D Power
• United Group of Institutions 10

• Maurya Motors 13 FUEL WATCH 44 Stable Oil Prices Herals Sea Change for Strategic Petroleum

• Prime Honda 21 Reserve - OIL-PRICE.NET

• Popular Vehicles & Services 26

• Olympia Honda 41 CONSUMER CASE STUDIES 46 NCDRC : Baljit Kaur - Petitioner
NADA MUSINGS Versus
• Marikar Group 47 Divine Motors and Anr - Respondents

• Bagga Link 50 48 Major developments affecting Automobile Industry in US

• Shriram Transport Finance 51

• Carazoo Online Solutions 54

• SKF Group 55 SALES REPORT 52 Vehicle Sales & Exports and Y-o-Y Growth - October 2017

• Satyam Centre of Professional Excellence 58

For Advertisement query, please contact Printed and Published by G K Ahuja on behalf of Federation of Automobile Dealers Associations,
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Editor: G K Ahuja



President’s Message Staying on Course

Dear friends,
New Council of FADA, constituted at the meeting on 5th October 2017 has
got down to the work in right earnest.
The stepped-up engagement with the members of automobile dealer
fraternity spread across the country has been our priority for the past one
year. Around 30 statewise Whatsapp groups have been constituted to keep
my fellow dealers abreast of the developments in auto retail trade at the
national and state levels and to seek their feedback & suggestions. With
more than 100 members in each group, we are directly in touch with over
3,000 members in various parts of India on daily basis. The sharing of
concerns and experiences by the members within the Whatsapp groups
have helped us identify the issues for appropriate action and clarification.
As noted from the chats in various groups, GST concerns still continue to
bug the auto retail business. Rest assured, F A D A is alive to the issues and
problems concerning GST facing my fellow dealers. We have not only taken
up the issues with the concerned authorities within the Central and State Governments, but are also seeking the opinion of
experts for clarification and further appropriate action.
To further strengthen the interaction with members, we have also appointed the Chairpersons and Directors at the State
levels. You will kindly appreciate that considering the geographical spread of the country, it is well-nigh impossible for office
bearers to meet and be in direct touch with each and every automobile dealer. The State Chairpersons, along with the Regional
Associations, will act as bridge between F A D A Council and automobile dealers in their respective States.
We, in F A D A Council, have also decided to rotate the council and regional meetings, which will enable office bearers and
other council members to meet the members in different cities and towns. FADA’s next event, i.e. Vyapar 2 Mumbai dovetailed
with the council meeting, is scheduled for 15th December 2017 at Hotel Holiday Inn, Mumbai. The programme details and
registration form is being published elsewhere in this issue. All members, particularly the members in Mumbai and Western
region, are requested to kindly make it convenient to attend.
You will be glad to know that F A D A’s mega biennial event, viz. Auto Summit 2018 will be organised on 9th February 2018 at
Hotel Le Meridien, New Delhi. As in the past, the Auto Summit is timed with the Auto Expo that will be held from 9th to 14th
February 2018 at Greater Noida close to Delhi. F A D A has arranged special invites for automobile dealers to enable them
attend the Auto Expo’s Inauguration and visit the show on 8th February 2018. Since the Auto Expo formally opens for public
from 9th February 2018, the special invites/passes for automobile dealers to visit the Auto Expo on 8th February 2018 will help
them avoid the huge rush on public/business days.
Commencing from the year 2000, F A D A’s biennial Auto Summit has become bigger and better with each Summit. Needless
to mention, Auto Summit is not only eagerly awaited by the automobile dealers, but also by OEMs and other allied businesses.
As in the previous year, F A D A will be taking a large delegation to participate at NADA’s Convention & Expo scheduled for 22nd
to 25th March 2018 in Las Vegas, USA. The participation at the previous NADA Convention presented unique opportunity to
the members of delegation to learn and imbibe innovative ideas for dealership management. The learning apart, the participation
under the banner of F A D A also fostered fellowship and bonding among 40-odd participating members. Members interested
in participating at 2018 NADA Convention & Expo may get in touch with F A D A office.
While on the subject, I wish to inform that F A D A has appointed Mr Saharsh Damani as its CEO with immediate effect. With
a career spanning over a decade in various Liaising, M&A, Strategy and Research related roles, Mr Damani will drive F A D A's
work and support the Council and the dealer community at large in seeking solutions on issues related to Auto Retail Industry.
With best wishes,
Yours sincerely,

John K Paul

7 October 2017

Industry Track

Subdued Festivities for Auto Market

After a bumper September, the auto market witnessed Commenting on the October sales, Rakesh Srivastava, Director
subdued sales in October. While the sales figures looked - Sales and Mktg, said, “Hyundai did its highest retail of over
healthy, on the face of it, in September 2017, the retail sales 50,000 units in a festival month, with a wholesale of 49,588
did not keep pace with the despatches from OEMs, resulting units on the strength of strong demand for the Grand i10,
in inventory build-up and stock correction in October. The Elite i20 and Creta. In addition, the Next Gen VERNA received
early advent of festive season this year also made the sales strong customer response with over 20,000 cumulative
figures look artificially impressive in September 2017, bookings and 150,000 enquiries.”
compared to the lower base in September 2016 during which
there was no major festival. The month of October 2017 was Domestic sales of Mahindra & Mahindra (M&M) were under
a mixed bag, with total vehicle sales across segments in stress in October 2017. M&M sold 23,413 passenger vehicles
domestic market declining marginally by 1.8% to 2,162,164 in the Indian market during October 2017, which reflected a
units from 2,201,489 units a year ago. 5.4% dip vis-à-vis the domestic sales figure of 24,737 passenger
vehicles in October 2016.
Festivals fail to light up the passenger vehicle sales
Rajan Wadhera, President, Automotive Sector, M&M,
Passenger vehicle sales in the Indian market at 279,837 units commented, "The auto industry has had a mixed month in
in October 2017 were more or less flat vis-à-vis 280,577 units terms of sales in October. The build up to Dhanteras and Diwali
in October last year. Barring Maruti Suzuki and Toyota Kirloskar was good but the demand tapered off subsequently. Last year,
Motor, all other major players in the Indian passenger vehicle all festivals were in the month of October and the industry
market registered negative growth during the month. volumes had a high base. This year, September and October
combined, we have grown by 7.9% in the auto division. Going
The market leader, Maruti Suzuki India (MSI) reported forward, we enter into a year-end period of lower sales.”
domestic sales of 135,128 units in October 2017, clocking a
growth of 9.3% over 123,684 units in October last year. The Meanwhile, Tata Motors’ Passenger Vehicles Business Unit
company’s entry-level duo of Alto and the Wagon R witnessed posted sales of 18,314 units in the domestic market during
4.2% drop in domestic sales that stood at 32,490 units in October 2017, up 3.2% over 17,742 units in October last year.
October 2017 (October 2016: 33,929 units). However, the According to the company, the sales were driven by continued
quintet of compact cars – Swift, Celerio, Ignis, Baleno and the good performance of new generation vehicles Tiago, Tigor,
Dzire – clocked a healthy growth of 24.7% y-o-y in domestic Hexa and an excellent response received for the newly
sales, thanks to the continuing strong demand for the third- launched compact SUV, Nexon.
generation Dzire compact sedan. The compact car segment
contributed 62,480 units to the company’s domestic sales tally Domestic sales tally of Toyota Kirloskar Motor (TKM) at 12,403
in October 2017. units in October 2017 clocked a 6.5% uptick vis-à-vis 11,651
units a year back. TKM’s exports soared by 65.2% y-o-y to 1,609
The company’s C-segment offering – Ciaz saw a sharp 35.4% units during the month. “We are happy that the festive season
fall in domestic sales to 4,107 units in October 2017 (October has given a positive push to the domestic sales in the auto
2016: 6,360 units). On the other hand, with compact SUV, industry. There is a spur in the customer demand. Innova
Vitara Brezzaa sustaining the sales momentum, the company’s Crysta and Fortuner continue to enjoy good growth in demand
UV portfolio, comprising Gypsy, Ertiga, Vitara Brezza and the in the market,” commented N Raja, Director & Sr VP, Sales &
newly introduced S-Cross facelift, clocked a handsome 29.8% Mktg, TKM.
y-o-y increase in domestic sales at
23,382 units during the month. Sales (Domestic + Exports) during October 2017 viz-a-viz October 2016

Hyundai Motor India Ltd (HMIL), the
second largest player in the Indian car

market, too posted lower-than-
expected sales. In October 2017, the
Chennai-based manufacturer sold
49,588 passenger vehicles in the Indian
market, down 0.9% (October 2016:
50,017 passenger vehicles).

123.26

November 2017 8

Industry Track

Honda Cars India Ltd (HCIL) registered domestic sales of Yadvinder Singh Guleria, Sr VP - Sales & Mktg, HMSI, said, “The
14,234 units in October 2017 as against 15,567 units in the increased production capacity by 50,000 units per month
corresponding month last year, which translated into 8.6% de- ahead of the festival coupled with rapid network expansion,
growth. City sedan, with sales figure of 4,366 units, was the availability of models up to last mile network and 360 degree
best seller for Honda, followed by WR-V - 3,443 units, Jazz – marketing push resulted in record festive retails.
2,646 units, Amaze – 1,845 units, BR-V – 1,280 units, Brio – TVS Motor Company’s domestic sales at 270,372 units in
640 units, and CR-V - 14 units. October 2017 were flat, falling marginally by 0.7%, compared
Yoichiro Ueno, President and CEO, HCIL, said, “There have been to 272,229 units in October last year
some market disruptions on account of GST and additional Likewise, Bajaj Auto saw its two-wheeler sales in the Indian
cess implementation in the last few months which resulted in market end up near flat at 211,553 units in October. The
pre-buying ahead of festive period this year. The festive company’s two-wheeler exports, however, grew by healthy
purchases also spread across two months this year where we 20.4% y-o-y to 114,225 units during the month.
have witnessed a combined sales growth of over 6%. During Remaining in fast lane, Royal Enfield clocked 16.5% uptick in
October, we also faced some supply constraints of few its domestic motorcycle sales that added up to 68,014 units
components, due to which our production of some models in October 2017 (October 2016: 58,379 units).
got impacted and held us back in terms of dispatches. We Domestic sales of India Yamaha Motor at 86,266 units in
have taken steps to strengthen the supply situation and hope October 2017 were stagnant vis-à-vis 86,430 units a year ago.
it will normalize in November.” Suzuki Motorcycle India posted domestic sales of 46,033 units
Ford India’s domestic sales plunged 43.8% y-o-y to 4,218 units in October 2017 – up 26.1% over 36,514 units in October 2016.
in October 2017. Anurag Mehrotra, President and MD, Ford
India, said, “The ramp-up for new model introduction has LCVs shore up CV sales numbers
impacted our wholesales for October.”
Renault India, clocking domestic sales of 9,305 units in October The commercial vehicle sales encountered a speed-breaker in
2017, witnessed a steep 25.0% decline from 12,409 units a October, after impressive performance in Q2 of FY’18. The
year ago. overall commercial vehicle sales numbers were in positive
Ditto for Volkswagen India that posted a negative growth of territory, though. While the domestic sales of M&HCVs crawled
29.0% y-o-y to 3,929 units in October. up by a paltry 0.9%, that of LCVs witnessed a decent growth
of 10.7% y-o-y in October 2017.
Two-Wheeler sales too stray off the course Tata Motors notched up a 6.4% increase, selling 30,572
commercial vehicles in domestic market during October 2017
Two-wheelers’ growth momentum came to a halt with (October 2016: 28,738 units).
domestic sales slipping by 2.8% y-o-y to 1,750,966 units in Ashok Leyland clocked domestic sales of 11,739 units in
October 2017. October 2017, which represented a 2.4% uptick over 11,465
Numero Uno, Hero MotoCorp saw its domestic two-wheeler units in October 2016.
sales fall by 4.5% to 621,087 units in October 2017 from Commercial vehicle sales of Mahindra & Mahindra (M&M)
650,217 units in October 2016. The company attributed the in the Indian narket aggregated 19,279 units in October 2017
negative growth to the higher base in October last year, which – up 6.8% y-o-y.
comprised all major festivals. Hero MotoCorp set yet another Volvo Eicher Commercial Vehicles (VECV) sold 4,463 Eicher
global benchmark by selling over 3 lakh units of two-wheelers branded trucks and buses in domestic market during October
in retail sales in a single day - on the auspicious day of 2017, as against 3,854 units in the corresponding month last
Dhanteras. “Achieving 2 million two-wheeler retail sales in this year, clocking an 15.8% growth.
year’s festive season is a new benchmark,” Ashok Bhasin, Head GST woes besetting the small businesses are weighing down
of Sales, Marketing and Customer Care, Hero MotoCorp, said. the passenger vehicle and two-wheeler segments in
Honda Motorcycle & Scooter India (HMSI) recorded domestic particular. GST Council has recently reduced the GST rates in
sales of 437,548 units in October 2017, which marked a 7.0% respect of over 200 items and relaxed the compliance
decline vis-à-vis 470,358 units a year ago. With this requirements in the case of small businesses, which is likely
performance, the company saw its India’s retails cross the to have a positive impact on auto market. Going forward,
13.50-lakh-unit mark in the two months (September-October the sales are expected to pick up
2017) and break its own previous 2016 festival retail high by
significant 1 lakh units.

9 November 2017



Decoding GST

Key Points of 23rd GST Council Meeting

The GST Council in its 23rd Meeting held on 10.11.2017, 4. The time period for filing GSTR-2 and GSTR-3 for the
decided to reduce tax rate on a wide range of daily use month of July 2017 to March 2018 would be worked out
items. The meeting was held in Guwahati and was chaired by a Committee of Officers and till then taxpayers will
by Hon’ble Finance Minister of India, Shri Arun Jaitley. not be required to file GSTR-2 and GSTR-3.

The major highlights of the meeting are as under: 5. Late fees paid by taxpayers for GSTR-3B for month of July,
1. All taxpayers are required to file monthly return in Form August and September has been waived and the same
will be re-credited to their Electronic Cash Ledger under
GSTR-3B along with payment of tax by 20th of the "Tax" head instead of "Fee" head.
succeeding month till March, 2018.
2. Taxpayers, whose annual aggregate turnover is up to 6. From October 2017 onwards, the amount of late fee
Rs. 1.5 crore are required to file GSTR-1 on quarterly payable by a taxpayer shall be Rs. 20 per day if tax liability
basis. for the month is 'Nil' (Rs. 10 per day each under CGST
A. Due date for the period of July to September 2017 and SGST Acts).

- December 31, 2017 7. It has been decided that a facility for manual filing of
B. Due date for the period of October to December application for advance ruling is being introduced for the
time being.
2017 - February 15, 2018
C. Due date for the period of January to March 2018 8. It has been decided to exempt suppliers providing services
through e-commerce platform from obtaining compulsory
- April 30, 2018. registration if their aggregate turnover does not exceed
3. Taxpayers, whose annual aggregate turnover is above Rs. 20 lakh.

Rs. 1.5 crore are required to file GSTR-1 on monthly 9. The due date of TRAN-1 has been extended to December
basis. 31, 2017 and due date for filing of GSTR-4 for the quarter
A. Due date for the period of July to October, 2017 - July-September 2017 has been extended to December 24,
2017.
December 31, 2017
B. Due date for November 2017 - January 10, 2018 10. Only 50 items remain under 28% tax slab and tax rate of
C. Due date for December 2017 - February 10, 2018 existing 177 itemsreduced from 28% to 18%. The major items
D. Due date for January 2018 - March 10, 2018 on which rate has been reduced are - Furniture, Trunk,
E. Due date for February 2018 - April 10, 2018 suitcase, vanity cases, brief cases, Detergents, Shampoos,
F. Due date for March 2018 - May 10, 2018 Perfumes, Slabs of marbles and granite, Articles of cement
or concrete or stone, Chocolates, Chewing gum and
Cinematographic cameras and projectors.

11. GST ON AUTOMOBILES RETAINED AT 28%.
12. GST ON PARTS & ACCESSORIES OF MOTORCYCLES

(INCLUDING MOPEDS) REDUCED FROM 28% TO 18%.
13. All stand-alone restaurants irrespective of air-conditioned

or otherwise will attract 5% GST without Input Tax Credit.
Restaurants in hotel premises having declared room tariff
of less than Rs. 7,500 per room per day will also attract
GST of 5% without ITC.
14. It has also been decided that maximum "annual turnover"
eligibility for composition scheme will be increased to Rs. 2
crore from the present limit of Rs. 1 crore in the CGST Act.
However, eligibility for composition will be increased from
Rs. 1 crore to Rs. 1.5 crore p.a. for the time being

11 November 2017

Opinion

Domestic Wholesale Dispatches in Passenger Vehicle Industry to
Remain Strong in Coming Quarters: ICRA

Domestic passenger vehicle (PV) wholesale dispatches grew expenses; and (c) likely sustenance of discounts-led sales push
by healthy 13.4% during Q2FY2018 supported by re-stocking resulting from restricted pricing power in the wake of intense
of inventory by dealers post GST implementation, favourable competition. Also, recent trend of rising commodity prices will
demand momentum and customer sentiments, recovery in keep profitability margin of OEMs under check in the near to
rural income as well as moderate cost of car ownership (lower medium term. The market share in the domestic PV segment
EMIs). According to an ICRA report, the growth trend was in is expected to remain concentrated over the medium term,
line with its earlier estimate where it anticipated inventory with the top five players constituting over 80% of the overall
re-stocking as well as favourable macros to support healthy market. This implies that profitability pressures on the
wholesale dispatches. Rural economy seems to be gaining relatively low volume players may be even higher, resulting in
momentum on account of increase in minimum support prices, sustained dependence on external financing to fund losses
farm loan waiver, 7th pay commission, as well as normal and capital expenditure requirements.
monsoon in most part of India. Two key OEMs i.e. M&M and
MSIL, which have a sizeable exposure to rural segment, Sri Lanka Government Move May Hit India’s 3-
witnessed handsome growth in wholesale growth dispatches Wheeler Exports
in recent months. Urban demand also continues to remain
healthy on account of pay-out of 7th pay commission, moderate The recent indication by the Sri Lankan Transport Ministry, to
inflation and favorable customer sentiments. restrict the import of 3Ws into the country due to increasing
According to Subrata Ray, Senior Group Vice-President, accidents rate and traffic congestion, if implemented may
Corporate Sector ratings, ICRA, “Overall macroeconomic impact India’s 3Ws exports. With a 14% share in overall
indicators remain favourable with GDP growth rate expected exports, the importance of Sri Lanka as a 3Ws market cannot
to accelerate in H2FY2018 and rural income also projected to be undermined. However the extent of impact in the near
recover in the backdrop of normal monsoon in most region of term on the domestic industry is expected to be limited, says
India. Also, cost of car ownership continues to moderate on an ICRA note due to domestic tailwinds and recovery in some
account of falling interest rate and moderate fuel prices. Given of the other export markets. This will help 3Ws OEMs to offset
the low penetration levels in the country, the long-term the impact of likely restrictions from Sri Lanka. This is borne
prospects of the industry remains favourable. We expect out by the fact that the dependence on Sri Lankan market has
domestic PV sales growth to grow by 9-10% during FY2018 reduced over the years as OEMs have successfully forayed into
and we maintain a 9-11% CAGR estimate many of the African and Latin American markets.
over the next five fiscals. Growth rate could
accelerate further by 100-150 bps in case of
speedier recovery in economic activity.”
Overall capacity utilization level in the
industry remains modest; however, the
statistics vary significantly across OEMs. In
order to address the capacity utilization
issue, few multinational OEMs have started
using Indian operations as an export hub for
small cars which has helped them improve
the overall utilization of the Indian
operations. Barring exception of few players,
industry’s profitability metrics are unlikely
to witness material improvement in the near
term, despite improved prospects of sales
volume growth in view of - (a) need for
expenses towards new product
development; (b) increase in employee

November 2017 12

Opinion

Giving more insights, Subrata Ray, said, “The opening up of confluence of factors including rising demand for last-mile
3W market in key states along with replacement-driven transportation from developing countries with relatively
demand is likely to drive healthy sales in the near-term, which under-developed public transport system, increasing
will help offset the adverse impact of Sri Lanka’s potential acceptance of 3Ws over 4Ws for commercial transportation
restrictions. Furthermore, on the exports front, as Sri Lanka’s and growing focus of Indian OEMs in scaling up presence in
share in overall exports pie has reduced from 30% (in FY 2016) markets within South Asia, Africa and Latin America.
to 14% (in FY 2017), countries such as Nigeria and Egypt have Sri Lanka is one of the key export markets for Indian OEMs
emerged as bigger export markets for Indian OEMs.” but over the past few years, its share has declined because of
The domestic market, which witnessed subdued demand sharp reduction in demand (owing to increase in local taxes)
trends (down 5% in FY 2017), is reflecting a positive outlook. and increasing focus of OEMs to foray into the African and
This has been driven by factors like discontinuation of cap on Latin American markets. As a result, Sri Lanka’s share in overall
permits (for 3Ws) by major states like Maharashtra and exports pie has reduced in comparison to other markets like
Gujarat, release of fresh permits by Delhi Government and Nigeria and Egypt.
replacement demand from Karnataka following Government’s “Going forward, continuing political and economic challenges
decision to convert all vehicles to four stroke engine and ban in some of the key importing nations, which were
diesel vehicles in Bengaluru. As a result of these developments, accompanied by sharp currency devaluation and often the
the domestic 3W sales have witnessed sharp recovery over inability to repatriate currency, may pose some concerns for
the past few months and witnessed highest ever domestic sales 3W OEMs. However the overall outlook appears positive as
volumes of 61,680 units in September 2017. domestic sales have started inching upwards, over 15% growth
As for exports, India ranks amongst the leading exporter of in H1FY 2018, driven by pent-up demand and opening up of
3W globally with export sales of over ~272,000 units in FY permits in select states and; a 19% growth in 3W exports in
2017. Till FY 2016, India’s 3W exports have grown at a CAGR H1 FY 2018 driven by rise in sales to Bangladesh and Egypt,”
of 12% (in unit sales) over the past decade driven by a adds Ray

MAURYA MOTORS LIMITED

Tata Authorised Dealer for Passenger & Commercial Vehicles

Plot No. C-1, Industrial Area
Patliputra

Patna - 800 013

Phones: 92636 32685 / 92636 39260 / 92346 66948
E-mail: [email protected]
[email protected]

13 November 2017

Perspective

Building Digital Car Company of Future

Digitalisation and a host of societal and technological trends Boston Consulting Group
are transforming the automotive industry. Advances in
autonomous driving, the internet of things, and big data future demands of customers and then use an agile
analytics are redefining how drivers interact with vehicles and approach to design, test, and refine products in multiple
creating opportunities for innovative products, services, and iterations. Reusable software platform designs give them
businesses models. Urbanization, ubiquitous connectivity and an advantage over competitors that continually redesign
the embrace of mobile devices and social media. Meanwhile, to solve isolated problems.
are giving rise to amass customer base that is increasingly open • Software and Ecosystems Based Innovation. The tech
to replacing car ownership with shared, on- demand mobility world focuses on differentiation through software
services, ushering in a new era of digital service solutions. innovation and speed to market rather than hardware.
This convergence of forces is causing a paradigm shift in how Standalone design, in which all aspects of product design
automotive original equipment manufacturers do business are vertically integrated and tightly controlled by the OEM,
and organize their companies. In the past, OEMs saw is no longer feasible. Therefore, companies must leverage
themselves primarily as providers of hardware. Now, they are a broad and diverse ecosystem of partners to secure
beginning to evolve into providers of connected mobility innovative technologies and new ideas for products,
solutions. Until very recently, OEMs interacted with customers business models, and sales channels. Ecosystem
mainly through intermediaries, such as dealerships. Now, they development and the ability to integrate best-in-class
are recognizing the value and the necessity of engaging directly components from internal and external sources, often
with customers throughout a vehicle’s life cycle and beyond. market-specific or even open source solutions, become
critical differentiators.
What Automakers Can Learn form the tech Industry? • Customer Centricity and Individualization. Tech
companies engage buyers through a variety of channels
To seize the growing opportunities in new digitally enabled and seek to cultivate a seamless customer experience
businesses, automotive OEMs are looking to adopt the flexible, across all customer touch points. They take advantage of
agile, and collaborative approaches that have succeeded in frequent customer feedback for continuous improvement.
the faster-moving tech industry – and that have been adopted Customer centricity becomes the guiding principle in the
by such attackers as Tesla. These strategies include: design of products, which are built to exceed users’ needs
• Continuous Life Cycle Management. Traditionally, the rather than satisfy complex technical aspirations.
For most automotive OEMs, adapting to these new rules of
automotive world has operated in strict, multiyear the game will require a transformation of the organization.
development cycles that clearly sequence product However, the traditional automotive manufacturing business
development and launch. Products are hard to upgrade will not disappear. The challenge will be to integrate the
because their functionality stems mainly from hardware traditional business with the digital business so that they
components and embedded software. Of course, the complement and work alongside one another.
digital tech world and new auto players such as, Tesla To be sustainable and to ensure that all parts of the company
also sequence product development and launch. But operate in sync, this digital transformation requires a holistic
products are released at an earlier stage and are then approach. It should begin at the strategic level and extend
continually upgraded. Additional software and functions through product offerings, the value chain, organizational
follow the main launch. The goal is to build a large, structure, and mindset.
installed base of customers who are likely to keep buying
products or services. OEMs are now moving away from Four Archetypes of the Digital Organisation
this “one off ” style of product development and
embracing “living” products. With that change, however, Virtually every major automotive OEM has begun to offer
comes the need to develop stronger life cycle connected mobility services in some form and to adapt its
management capabilities and sustain the required teams. organization to the digital era. But some are further along
• Agile Development. Instead of taking an engineering than others. While there is no one-size-fits-all template for
driven, sequential waterfall approach to development, what the digital automaker of the future should look like, clear
companies in the tech world focus on discerning the patterns are emerging.

November 2017 14

We see four topic areas at the intersection of the traditional time employees, that coordinates resources and orchestrates
automotive and the digitally enabled business that OEMs must digital initiatives across the organization. OEMs at this stage
be able to address: mobility, connectivity, autonomy, digital also often appoint a chief digital officer (CDO) to complement
retail and services, and Industry 4.0. On the basis of our the role of the chief information officer, who is responsible
analysis of 20 automotive OEMs in North America, Europe for such traditional IT tasks as planning, building, and running
and Asia-Pacific, we also have identified four basic IT systems; data administration; and securities management.
organizational archetypes, or stage, that major automakers The CDO can handle new responsibilities related to
adopt, generally in sequence, on their digital journeys: the digitalization, such as digital business building, infrastructure
opportunist, the transformer, the pacemaker, and the digitalist. management for new digital offerings and ecosystem
An individual OEM’s position on this evolutionary path can development. The company’s circumstances determine
be plotted along two axes. The first is its level of sophistication whether the CDO requires a dedicated staff.
in digital activities-from pilots to mature businesses-in the five The pacemaker. As digital offerings grow more complex,
topic areas. The second is the degree to which digital activities merely synchronizing digital activities is not enough.
are synchronized across the organization. This can range from Pacemaker go a step further and establish one or more centres
limited coordination to an organization in which digital is fully of excellence-or “digital powerhouses”- that take responsibility
synchronized and ingrained, as it is in the tech industry. (See for delivering digital products and services in a coordinated
Exhibit 2) way. These powerhouse are standalone, cross-functional units
The opportunist. This is the starting point for most with up to 400 full-time colocated employees; some have their
organization. At this stage, individual functions pursue digital own profit-and-loss responsibilities and legal status. Digital
opportunities as they arise and synchronize them across the powerhouse typically encompass mobility, connectivity,
organizations in only a limited way. This results in faster time autonomy, and digital services, while Industry 4.0 and digital
to market, but often at the expense of quality, consistency retail remain in their respective functions. If a company has
across products, and an optimized user experience. R&D may appointed a CDO, he or she often leads the digital powerhouses.
begin work on connected-car solutions, for example, while The Digitalist. At this last phase of digital evolution, the
marketing and sales enters digital channels and operations automaker operatesmore like a tech company. The digital mindset
tackles industry 4.0 topics. At this early stage of digitalisation, is ingrained in the organization. As capabilities developed in
solutions are generally not yet complex enough to require the digital powerhouse mature, they are integrated into the
major cross-functional alignment. respective business and production functions, becoming the
The transformer. As OEMs delve into more-sophisticated “new normal”. Digital topics that are still nascent continue to
applications of digital technologies or as initiatives developed be developed in the digital power-house.
at the opportunities stage come to fruition-they recognize the As their digital businesses become larger and more complex –
need for greater cross-functional coordination. At the and the need for cross-functional collaboration rises –
transformer stage, OEMs typically create a digital- automotive OEMs tend to move from opportunists to
transformation office, often comprising fewer than 50 full- digitalists. They need not follow the stages in sequence to

15 November 2017

succeed in digital, however. The starting point will depend on A Roadmap for Building a Digital Car Company
the activity or technology the OEM is pursuing. And the speed
required to reach the desired stage will depend on a company’s The first step in reorganization is to develop a clear picture of
circumstances, capacity, and skills. The key is to ensure that what the car company of the future will look like and the
the OEM’s organization fits its digital strategy. factors that will be critical to success. What kinds of
In many cases, OEMs can successfully launch connected-car technologies must be mastered and which capabilities will be
solutions, enter the digital retail space, and implement basic required? A rigorous health check can gauge the current level
Industry 4.0 technologies while they are still at the of readiness for competing in each of the major topic areas:
opportunist stage. The development of self-driving cards, mobility, connectivity, autonomy, digital retail and services,
however, requires a greater degree of coordination across and Industry 4.0. An OEM can then identify gaps between the
components and subsystems. It also requires a step change company’s current capabilities and where it needs to be, as
in software and digital capabilities, which must remain well as the roadblocks in the way.
closely integrated with the traditional product development The importance of seven success factors for digitalization
cycle. Therefore, OEMs typically need to have reached at least depends on where OEMs are in their evolution. (See Exhibiti 3)
the transformer stage. Digital “Upskilling.” Whether an OEM is an opportunist, a
Of all the automotive OEMs around the world, only one, Tesla, transformer, a pacemaker, or a digitalist, it needs digitally
is in our view at the digitalist stage. The digital organization of skilled people, who have enough clout to bring new digital units
another leading US carmaker is rapidly moving toward that to life. This requires team building, training, and often hiring.
stage: General Motors is reintegrating many of the services Digital Ecosystem Building. The OEM should leverage the
developed by its former digital powerhouse, OnStar – such experience and resourses of a network of clost partners that
as, navigation, remote diagnostics and subscription-based complement its own capabilities and capacity in order to
communications – into its core product development function. increase the quality of its solutions and decrease development
Leading German manufacturers of premium automobiles have time. Even OEMs at the opportunities stage should start
established digital powerhouses. French and other US OEMs building an ecosystem.
are in the process of doing so, but their organizations are less Digital Vision. The organisations’s leadership team must be
digitally mature. Most Japanese OEMs are at the transformer fully committed to and aligned with a clearly defined vision
stage but are in the process of reorganization. Most other for a digital organization. This vision is important at the
Asian automotive OEMs so far are at the opportunist stage transformer, pacemaker, and digitalist stages because it lays
because they lack the internal capabilities and fast decision- out how the automaker wants to position itself in the digital
making processes to succeed in digital mobility solutions. game over the long term.

November 2017 16

Technology and Business Integration. Developing technically What is the current stage of maturity of our digital organization
feasible, comprehensive digital solutions that meet customers’ and what is our target? Answering this question first requires
demands requires an approach that involves technology, IT, insight into the organization’s digital maturity. What are its
and business functions. This holistic approach is important digital capabilities, technologies and organizations setup and
for transformers, pacemakers, and digitalist. what are the roadblocks to achieving the key success factors?
Cross-Functional Teaming. Internal silos impede digital speed. Next, an OEM needs a clear picture of technology, digital topics
OEMs need to create teams that work across functions and & organization is in line with the company’s strategic goals.
have end-to-end responsibilities, decision-making authority, What path should we take through the four organizational
and clear alignment mechanisms. For pacemakers and stages, and how should we indentify anchor points? OEMs
digitalists in particular, this ensures that their work is in line need to identify the required intermediate steps and stages
with the goals set by the C-suite. of technology and of digital maturity. They need to
Seamless Customer Experience. Dedication to the customer differentiate between nascent and mature activities when
must be the common denominator across functions in order determining organizational focus.
to provide a superior, consistent, and seamless digital How can we ingrain digital throughout the organization as
experience. That kind of experience helps pacemakers and we evolve into a mobility solutions provider? Achieving this
digitalists differentiate their offerings from competitors’ and requires a fundamental shift so that the OEM thinks of itself
achieve superior satisfaction ratings. The more varied and as a mobility solutions provider; it also requires a new way of
numerous the customer touch points, the more challenging working. An automotive OEM needs new methodologies,
it to achieve seamlessness. technologies, and cultural traits to be able to play by tech
Digital-Native Mindset. An effective communication and industry rules.
change management program is essential to the adoption of THE MOST SUCCESSFUL automakers have already begun to
new technologies and methodologies and helps companies refine their digital organizations to reflect the breadth and
think of themselves as digital organizations. maturity of their digital businesses. OEMs in the vanguard
Only if the whole organization supports digitalization, and are learning from companies in the technology and digital
achieves the seven key success factors, can an automotive OEM consumer product industries how to raise their game and
work in a fully digitalized way, as a technology company does. build organizations that can deliver on the possibilities for
new mobility solutions for customers. Automotive OEMs that
Key questions to ask before beginning the journey embark on this journey now will be in a much stronger
position to realize the enormous growth opportunities of
As OEMs embark on the path to becoming a digital organization, the digital age
executives need to ask themselves three questions.

17 November 2017

Insight

Riding China’s Huge, High-Flying Car Market

Few car markets in history have risen so far so fast. Here’s a - McKinsey & Co.
peek under the hood at what’s driving China’s automotive
future. support future demand with additional tax-policy
Many automakers rightly view China as the industry’s new interventions if necessary. As for worries that continued
center of gravity. The country makes and sells more light growth in the car market could turn the country into a
vehicles than any other nation; so many, in fact, that in 2016, parking lot, China already has the world’s longest highway
40 per cent more cars were sold in China than in all of Europe. network, which it continues to expand.
To get here, the overall passenger-vehicle market has reliably Local players gaining ground
grown at double-digit rates, with most analysts expecting it While global automakers have enjoyed the fruits of the
to expand at a somewhat slower 5 to 10 per cent annual expansion of China’s automotive market with little meaningful
pace through the end of the decade (exhibit). domestic competition, this could soon change. Local brands
Yet some indicators appear to suggest that the market is have begun to exhibit real competitiveness based on vehicle
simply catching its breath for another sprint. For example, designs and quality levels, strengthening their brand images
per capita vehicle distribution remains low compared with and likely leading to larger market shares. For instance,
developed nations such as Germany and the United States, Chinese domestic brands as a group increased their share of
and cars are also becoming more affordable. While a new the passenger-vehicle market to 38 per cent in 2016, from
vehicle cost three years’ wages in 2010, estimates for 2020 32 per cent in 2014 - a huge feat when the market itself was
cut that figure in half. Furthermore, the government could undergoing double-digit yearly growth. What’s more, they
captured this growth from global automakers of nearly every
nationality, not from a single segment of weak players.

Perhaps the local brands’ most dramatic
improvement has occurred in product
quality. In 2010, an 89-point initial quality
gap existed between local and
international brands; by 2016, it had
fallen to 14 points. Local cars have also
gained a reputation among customers as
value leaders, offering features costing 25
to 35 per cent more on comparable joint-
venture brands. These quality and value
improvements have boosted the strength
of local brands, enabling some to raise
their prices and increase their bottom
lines.
The increasing competence of local
brands constitutes an urgent warning to
Western OEMs that opportunities to earn
“easy money” in China may be gone
forever. Some foreign OEMs will face
greater competitive pressure in the
country if they continue to offer
uncompetitive products through subpar
dealer networks.
Taking the lead in electric-vehicle
momentum
Befitting the world’s largest passenger-
vehicle market, China has become a

November 2017 18

Insight

leader in electric-vehicle (EV) demand and production. The are becoming cheaper to buy from a TCO perspective.
country’s 2020 EV target seeks to put five million of the Battery-system costs, for example, will likely fall by half by
vehicles on the road by 2020, requiring a challenging 40 per 2020, and innovative EV sales and mobility models can
cent increase in new-energy-vehicle sales each year. To reduce TCO as well. However, currently, the TCO advantage
achieve the 2020 target, the country needs to activate both over ICEs only exists in China’s tier-one cities after reaching
supply- and demand-side drivers: a certain travel distance.

Supply Because of the strides China is making in both EV supply
For example, to stimulate increased EV production, the and demand, global automakers have begun to develop their
government can finalize proposed policies concerning EV own China-specific EV strategies to stay attuned with this
credits. Doing so will compel more automakers to enter the future technology.
segment, since the program mandates they earn EV credits Using alliances for a breakthrough in shared mobility
to produce vehicles with internal-combustion engines (ICEs). Experience suggests that the best way to evolve new mobility
The program awards credits for battery EVs, plug-in hybrids, solutions is for automakers to collaborate more effectively
and fuel-cell-powered EVs. with selected ecosystem partners. Successful automotive
China is taking steps to improve EV-charging-infrastructure players will likely develop tailored strategies adapted to the
support. One example: boosting the charging-outlet ratio needs of different cities with different demographics. In this
from one plug-in “pole” for every two to three EVs today to environment, variations on four mobility types are likely to
one for every EV by 2020. The country is also developing emerge, depending on city size and other characteristics.
more expressway charging facilities, expanding the current Each will require support and coordination of other mobility
focus on coastal highways deeper into the country. players, governments, and infrastructure providers.
The market will also depend on a strong supply of new and For example, metropolitan areas with more than ten million
attractive models. To fill that need, the industry’s joint- people and large cities (those with over three million people)
venture operations should begin launching high-volume EVs will feature integrated smart mobility, with well-developed
in 2017 and 2018, and they are expected to have an mass-transit systems, car sharing, and other shared-mobility
estimated 100 EV models on the market by 2020. Adding to options. These cities are most likely to take the lead in
this list, more than ten new entrants have received EV enabling autonomous driving due to their focus on smart
production licenses as well. From a performance perspective, infrastructure and include Beijing, Guiyang, and Shanghai.
ongoing advances in battery technology will also support the Likewise, smaller cities with strong economies and medium-
market, with cell-level energy densities expected to improve range commutes will probably focus mainly on car sharing
from 220 watt-hours per kilogram now to 300 watt-hours while similarly sized but less affluent cities will emphasize
per kilogram in 2020. economical sharing in the forms of mass-transit busways and
Demand bicycles.
Finding effective ways to entice consumers to learn about By 2030, more than 280 Chinese cities will probably have
and buy EVs remains a significant challenge. Luckily, shifted to shared-mobility solutions, involving roughly 800
consumer interest in this mobility technology is starting to million people. While many of these people will reside in
grow due to improved education levels, high consumer big cities and benefit from integrated smart mobility
awareness of environmental issues, and the growing benefits programs, sizable numbers in smaller cities will rely on
EVs offer on total cost of ownership (TCO). In fact, between economical sharing to get around. The sheer size of this
2011 and 2016, the proportion of consumers potentially potential mobility migration should draw the attention of
interested in buying an EV jumped to 23 per cent, from just every automaker in China, reinforcing the need for effective
8 percent. shared mobility strategies.
One major advantage of EVs for first-time car buyers involves China’s ascent to the peak of the automotive industry has
the dramatically reduced licensing barriers for EVs, meaning changed the game for virtually every OEM worldwide. The
purchasers do not have to wait extended periods before they world’s largest vehicle market is also one of its fastest
can use their cars on the road. Another increasingly relevant growing, which makes gaining a clear understanding of how
advantage is cost: with or without government subsidies, EVs this market moves and what’s ahead perhaps the most
important skill any automaker can cultivate

19 November 2017

e-Mobility

Oil Industry Sees Threat Grow As Car Choices Multiply

Does the electric car threaten to weigh down oil prices? vehicle reduction plans in California, Germany, France and the
The oil and gas industry for years has largely dismissed such United Kingdom, as those governments adopt a range of
concerns, as have its consultants. But industry analysts have incentives and restrictions aimed at encouraging, or perhaps
been changing their tune and are beginning to advise their eventually requiring, the purchase of hybrids or electric
clients in Big Oil to develop business strategies that take into vehicles (EVs).
account the possibility of mass adoption of vehicle “In the past, the offering of EVs has been limited,” note analysts
electrification hitting oil demand in a noticeable way. Nicholas Potter and Warren Russell. “Auto manufacturers plan
“Electrification is happening faster,” said Marie-Helene Ben to expand offerings substantially in the coming years.”
Samoun, a partner with the Boston Consulting Group. “It’s Automakers Ford Motor Co., Honda Motor Co., Toyota Motor
not true today, but if you think on a horizon of 10 to 20 years, Corp., General Motors Co., BMW Group, Volkswagen AG and
it starts to be material.” others have all recently announced plans to roll out greater
As energy companies plan out their investment strategies that offerings of either hybrid electric or fully electric vehicle
include a 10- to 20-year investment strategy, “we think that models. These announcements have caught Samoun’s
this is something they need to look at,” she said. attention, as she says they demonstrate the auto industry’s
Experts say past skepticism of electric vehicles was warranted, growing confidence in both EV technology and a forthcoming
for a variety of factors. broader consumer acceptance, especially among younger
Though sales have been increasing, electric cars constitute a generations.
fraction of a fraction of the total global vehicle fleet. “Everyone thinks about Tesla, but it’s true also of BMW, that
Technological limitations and high costs left industry insiders they are introducing more hybrid or electric vehicles in their
and observers to conclude that the internal combustion engine portfolio, so you see traditional car manufacturers really
would continue to rule for some time, keeping demand for oil leading this trend,” she said.
and refined products high. This will continue to be true for Uncertainty
aviation and shipping fuels, Samoun said. OEMs face challenges in electrifying their product lineups.
International Energy Agency still believes global oil demand Profit margins are still smaller than for gasoline- and diesel-
will rise to 100 million barrels per day within a few years. fired cars. And in the United States, where the massive auto
But for some, the picture is rapidly changing. market helps to drive many industry trends, auto
Analysts point to not only stated government policy goals to manufacturers are growing worried of the increasing inability
wean consumers off gasoline-fueled vehicles, but the speed of consumers to afford their products. Eighty percent or more
with which electric vehicle manufacturers have been able to of the U.S. auto market is commanded by used vehicles, an
drive down costs and extend the range of their vehicles. executive from Toyota recently noted at a refined products
Governments concerned about greenhouse gas emissions conference in Houston. Studies confirm that U S consumers
have also shifted some attention away from coal-fired power are also holding on to their vehicles longer.
generation and toward the world’s auto fleet. It was a combination of market factors and technological
Barclays Commodity Research is starting to sound the alarm. limitations that led observers to discount the EV threat until
It has identified eight jurisdictions where governments have very recently.
either “proposed or adopted plans to reduce or ban internal In a December report, researchers at IHS Markit agreed that
combustion engine vehicles.” The short list includes China and vehicle electrification and changing vehicle ownership and use
India, two nations that oil companies are counting on to drive trends were worth keeping an eye on, but they argued that
oil demand moving forward, as demand growth wanes in more the change was occurring very slowly. Given that 96 percent
economically advanced countries. of car purchases in 2016 were for internal combustion engine
Still, sentiment against internal combustion engines is rising vehicles, and that these cars could be expected to remain on
in developed nations as well, as electric vehicle makers improve the road for 15 years or more. The facts on the ground
their technologies and make big promises for future suggested that “the impact of new vehicle technologies is
deployment. Barclays says to keep an eye on liquid-fueled expected to take time to materially affect the vehicle fleet and
overall fuel demand,” the study concluded.

November 2017 20

e-Mobility

“When we look at the future of the car and the impact of key Experts see weaker economic growth pressing down on oil
factors such as electric vehicles sales, we see the slow turnover prices for some time. McKinsey Energy Insights sees global oil
rate of the global vehicle fleet muting the effect of new demand growth softening to some 1 million barrels per day
technologies on global oil demand,” said Kevin Birn, Director increase annually or less due to “flattened global economic
of Oil Sands Research at IHS Energy. growth.”
But even that study emphasized the uncertainty of the longer- A study by Drillinginfo warns oil companies to “say goodbye
term outlook. to $100 oil forever” as abundant supplies conspire with waning
Samoun said newer data and trends suggest EVs could have a demand growth to keep prices lower for longer. “The
real impact on global oil demand, and over a shorter time economics of U S production continue to support higher
period. Boston Consulting Group thinks if governments follow supply, and even a slight improvement in prices translates into
through on their promises to promote fleet electrification, significant production gains,” said lead study author Maria
then these policies could depress future gasoline demand by Sanchez. “Demand is also growing, but the growth is at a
as much as 15 per cent within 10 years, and up to 30 or 35 slower rate than that of production.”
percent moving 30 years out. Oil companies must now include the growing threat of the
“When you see countries like France or the UK say they want electric car to their list of future business concerns, Samoun
to get out of traditional fueled cars by 2040, that’s a bold argues.
move,” she said. “But when you hear that China is “We think that you can have really something that is material
contemplating the same type of plan as a regulatory tool, in terms of reduction of gasoline demand over the next 10
working on the timeline, this could be a real game changer.” years,” she said. “It’s not zero but it’s big enough to start to
If true, then this picture only further diminishes the outlook think, if you have a fleet of refineries in the US, what are we
for the oil industry. going to do?”

21 November 2017

Competition Law Updates

Director General (ACCC) market study has highlighted structural imbalances
Competition, EC raids Car between manufacturers and dealers caused by one-sided
manufacturers dealer agreements, policies and procedures through which
the dealers are required to strictly adhere to manufacturers’
After conducting dawn raids policies regarding warranties, potential product defect claims
at BMW’s German premises, thereby limiting the ability of the dealers to assist the
the European Commission’s consumers.
Directorate-General for AADA has therefore asked the ACCC to recommend an
Competition has raided industry-specific code of conduct for the new car retail
several other German car industry in its final report on the Retail Car Industry in
manufacturers. December.
Supreme Court stays COMPAT order that imposed penalty
DG Competition believed on 3 car companies
that the companies The COMPAT by its order dated 09.12.2016 concurred with
G R Bhatia, Partner & Head, coordinated the size and the findings of the CCI and directed Ford, Toyota and
Competition Law Practice Group, shape of car parts – Nissan, to remove all restrictions imposed through
including the size of tanks agreements on auto parts suppliers so as to open up
Luthra & Luthra Law Office market for spare parts, remove all restrictions on supply
of spare parts by original equipment suppliers to
for ‘AdBlue’, a chemical authorized dealers etc.
used in diesel cars to reduce oxide and nitrogen exhaust On appeal, Hon’ble Supreme Court has stayed the operation
fumes. of the COMPAT’s order and the matter will be taken up for
arguments on the next date of hearing.
Thus, fearing that the companies may have violated the EU Nine Japanese auto-part manufacturers file writ petitions
cartel rules, the DG Competition inspected “several” car before the Delhi High Court
manufacturers including Volkswagen-owned Audi and These petitions inter-alia challenge the order of
Daimler. investigation passed by the Competition Commission of
India (CCI) under Section 26(1) of the Competition Act, 2002
Under the Indian Competition law, the Director General with (Act) and the notices sent by the Director General, CCI (DG)
the permission of CMM, Delhi has the power to conduct such requisitioning information pursuant to the order of
unannounced raids, and as per available information, as a investigation.
part of investigation, it has raided JCB, Eveready and The petitioners are primarily aggrieved by the rejection of
Panasonic offices. their inspection applications (these are applications filed
before the CCI under the CCI General Regulations, 2009 to
CADE Tribunal will hear proceedings against auto-makers inspect the case records) by the CCI.
in November The broad contention of the petitioners is that (a) they have
not been informed whether they are charged parties or
Automakers usually hold industrial property rights over the third parties; (b) by rejecting their inspection applications,
design of the auto parts manufactured by them, under Brazil’s the CCI is violating the principles of natural justice by not
Industrial Property Law. allowing the petitioners to have access to case material in
order to effectively respond to the DG’s notices.
Brazilian subsidiaries of Volkswagen, Fiat and Ford were The matters were listed on 16th October, 8th, 9th and 10th
found to be imposing certain rights on independent auto November for arguments and have now been adjourned to
parts manufacturers that were aimed at preventing them 23rd November 2017
from selling their auto parts in the spare market that in turn
characterized abuse of industrial property rights and
anticompetitive purposes.

The tribunal of the Brazilian Competition Authority, CADE
has decided to hear the case in November in which it will
decide whether automakers can prohibit independent auto
parts manufacturers from producing spare auto parts.

Australian Automotive Dealer Association (AADA) calls for
new car retail industry code of conduct

The Australian Competition and Consumer Commission

November 2017 22

F A D A Newsline

F A D A Appoints Saharsh Damani as its 1st CEO

Federation of Automobile Dealers Associations (F A D A) Broadcasters in India. Apart from Media & Entertainment,
appoints Saharsh Damani as its first CEO on November 3. Damani has worked in various other industries, such as,
With a career spanning over a decade in various Liaising, Information Technology, Building Materials and Life Sciences,
M&A, Strategy and Research related roles, Damani will drive on M&A, Strategy and Research related areas.
F A D A President, John K Paul said, "As major disruptions
F A D A's work and support become the order of the day, and with the auto retail industry
the Executive Committee, in the cusp of some of the most transformative changes since
the Council and the dealer the times of Henry Ford, it is imperative that F A D A, as the
community at large in apex body of automobile dealers associations in India,
seeking solutions on issues strategize and engage consistently with one and all, to leverage
related to Auto Retail the best possible outcome for the industry. Towards this end,
Industry. Damani will also Saharsh Damani’s stint with F A D A as CEO should definitely
endeavour to build a strong take us forward in giant leaps, given his immense talent and
and sustainable Auto Retail career experience, apart from imparting a professional
Sector in India. orientation and corporate culture to F A D A’s initiatives".
Damani has a proven track Damani graduated in Accountancy Honours and went on to
record of taking Federations do his Masters in Finance (Gold Medallist) followed by CFA
ahead in the game in his and MBA (Finance & Marketing).
previous two roles at the All Saharsh can be reached at:
India Digital Cable Federation E [email protected] M +91 99107 22552
(AIDCF) and Indian Broadcasting Foundation (IBF), the
preeminent body of Digital Cable TV Operators and Television

F A D A Appoints State Chairpersons

At the 285th meeting of Council of Federation of Automobile STATE CHAIRPERSON
Dealers Associations (F A D A) held on October 5 at Hotel Gujarat
The Grand, Vasant Kunj, New Delhi, F A D A Council decided Mr Baljeet Bagga
to revive the State Chapters and authorise the F A D A Haryana E [email protected];
Executive Committee to appoint Chairpersons for the State T +91 79 31908800
Chapters to further strengthen the activities of F A D A at Himanchal Pradesh
State & regional level. Ashish Bambha
E [email protected]
The lists along with contact details of Federation of T +91 184 2221500
Automobile Dealers Associations (F A D A) Chairpersons for
State Chapters and Regional Directors for Maharashatra Gagan Anand
State are as under: E [email protected]
T +91 1792 645000
STATE CHAIRPERSON

Assam & Rahul Dev Sharma Jammu & Kashmir Irfan Ahmed Narwaroo
North Eastern States E [email protected] Karnataka E [email protected]
T +91 361 2236621-22 Kerala Dr M P Shyam
Madhya Pradesh E [email protected]
Chhattisgarh Shashank H Shah
E [email protected] Sabu Johny
T +91 771 4083300 E [email protected]

Goa Prashant Joshi Virendra Singh
E [email protected] E [email protected]
T +91 832 6699999

23 November 2017

F A D A Newsline

STATE CHAIRPERSON STATE CHAIRPERSON
Maharashtra
Odisha Amar J Sheth Uttar Pradesh Ms Veena Agarwalla
Punjab E [email protected] West Bengal E [email protected]
Rajasthan T +91 22 24228686 T +91 522 2230083/899
Tamil Nadu Avinash Singhania Amit Manaktala
Telangana E [email protected] E [email protected]
T +91 671 2686395/96 T +91 33 22112828-30
Nitin Dada
E [email protected] REGION DIRECTOR
T +91 161 6622000
Sai Girdhar Mumbai-Pune-Nashik Dilip Bobde Patil
E [email protected] E [email protected]
T +91 141 4057575 T +91 22 4151 8400
Bharat Chordia
E [email protected] Marathwada Manish Dhoot
T +91 44 28292080 E [email protected]
Saral Talwar T +91 240 2338855/56
E [email protected]
T +91 40 44561010 South Maharashtra Uday Lokhande
E [email protected]
T +91 230 2460790-97

Vidarbha Anuj Kumar Pande
E [email protected]
T +91 712 6658000

November 2017 24

Attention: Members

NADA 2018 Convention - 22-25 March 2018, Las Vegas, USA

Federation of Automobile Dealers Associations (F A D A) had taken a delegation of 42 automobile dealers to participate
at NADA 2017 Convention. Seeing the huge response and enthusiasm shared by members, F A D A is taking another
delegation to NADA in March 2018 to attend NADA 2018 Convention in Las Vegas to be held from March 22-25.

NADA Convention & Expo is the world’s largest international gathering of franchised new-vehicle dealers. The convention
offers dealers the chance to meet face-to-face with major automakers, provides dozens of workshops with the industry’s
best trainers, and features hundreds of exhibitors showcasing the latest equipment, services and technologies. If you
want direct access to 10,000 dealerships across the globe under one roof, this is the one event you won’t want to miss!

Automobile dealers interested in joining F A D A delegation, should immediately sent e-mail to [email protected] with a
request for the registration form. The duly filled up registration form along with payment details of Rs. 50,000 as token
amount and the soft copies of their passport and the US Visa must be mailed to [email protected]
with copy to [email protected].

Bank: Canara Bank, Account Name: WE SELL MEMORIES INDIA, Account No. 2009256010469, Branch: H-54,
CONNAUGHT CIRCUS, NEW DELHI and IFSC Code: CNRB0002009;

HDFC Bank- Account Name: WE SELL MEMORIES INDIA, Account No. 50200011275012, Branch: D-23,DEFENCE
COLONY, NEW DELHI, and IFSC Code: HDFC0000134

F A D A has made arrangements with “We Sell Memories India”, to assist delegation members, who do not hold the US
Visa, in getting the same on payment of actual Visa Fee + Agent’s fee + applicable tax per case.

The registration fee, cost of travel & hotel stay and other miscellaneous expenses will be borne by the participants.

Dealership Performance Awards - Recognizing and Rewarding
Excellence in Automotive Retail

The Indian automotive retail is at an inflection point. Today’s dealerships offer a platform for multiple transactions and
a first-hand brand experience,which is making auto dealerships more important than ever. Dealerships are also being
innovative and adapting to needs of the future.
However, their good work and achievements are seldom recognized and rewarded. Time has come to put the best-of-
the-best on the pedestal and celebrate their endeavors.
Federation of Automobile Dealers Associations (F A D A) - the apex body for automobile dealers in India and Autocar
Professional – India’s largest automotive B2B media, have joined hands to create a platform that recognizes and rewards
the excellence in automobile retail.
The Dealership Performance Awards (DPA) is aimed at picking the best-in-class dealerships and their practices. A carefully
thought through process will ensure that the nomination, scrutiny and evaluation journey is transparent and unbiased.
Dealership Performance Awards is the ONLY platform for celebrating automobile retail in India.
The awards are divided in 4 categories encompassing the entire spectrum of automobile industry: 2-Wheelers, 3-Wheelers,
4-Wheelers and Commercial Vehicles. An able panel of jury will make the nominees go through a carefully drafted &
rigorous judging process. The process is also designed to highlight various special initiatives undertaken by the dealerships
in order to stay ahead of the curve. The awards will be hosted on the 9th February 2018 at Hotel Le Meridien, New Delhi.
Announcing the 2017 edition of the DPA, Hormazd Sorabjee, MD, Haymarket SAC said that Autocar Professional is proud
to have partnered with F A D A in its journey towards excellence and is committed to contributing towards the cause.
John K Paul, President, FADA, stated that F A D A has embarked on a journey to transform itself into a suave and futuristic
organization. And it recognizes the importance of working with the right partners as it leaps to the next level.

25 November 2017















New on Wheels

Land Rover Announces Launch of 5th Generation Discovery

Land Rover announced the launch of the 5th generation providing copious luggage space when required. Gesture
Discovery in India with prices starting from Rs. 71.38 Lakh (Ex- Control allows opening of the main tailgate with the wave of
Showroom) on October 28. the foot on either side of the vehicle. The dual-purpose
Available in two powertrain options, the 3.0 Diesel 190 kW powered Inner Tailgate retains loose items when raised and
and 3.0 Petrol 250 kW - the new Discovery is claimed to be offers comfortable event seating.
Land Rover’s most versatile SUV yet, with class leading Another first for Land Rover is the Activity Key. It’s a durable,
practicality and capability. waterproof wristband that locks and unlocks the vehicle
Speaking at the launch, Rohit Suri, President and MD, Jaguar allowing outdoor activities without carrying keys.
Land Rover India, said, “The new seven seat Discovery ENABLING TECHNOLOGY
distinguishes itself from most of its competition on its design The advanced feature - Park Assist - in new Discovery makes
appeal, intelligent versatility, enabling technology and a host parking easier than ever. While controlling the speed, the
of capability related features. New Discovery is a perfect vehicle steers itself through parallel and perpendicular parking
vehicle for people who love to explore and experience new manoeuvres and can also guide the vehicle out of the space.
places and terrains and enjoy an outdoor lifestyle.” The Drive Pro Pack consists of Lane Keep Assist that can detect
EXCEPTIONAL DESIGN APPEAL lane drift and gently steer the vehicle back into the lane while
The striking design of the new Discovery sets a new standard. Driver Condition Monitor detects when the driver shows signs
It’s beautifully proportioned with a strong dynamic stance, of drowsiness, giving an early warning when one needs to take
while wrap-around LED lights and a fast windscreen angle help a break. Adaptive Cruise Control with Queue Assist monitors
create a distinctively contemporary design and powerful the traffic ahead adjusting speed automatically to maintain a
character. The spacious interior is highly modern in design, suitable distance from the vehicle in front, resuming the pre-
delivering space for up to seven adults. Strong vertical and set speed when the road is clear, while Queue Assist keeps a
horizontal design lines combined with high quality materials suitable distance when queuing in traffic. The surround camera
and clever attention to detail lend the Discovery a sense of system provides as 360° exterior view.
purpose. The interior feels light and airy, further enhanced by UNMATCHED CAPABILITY
the fixed or front opening panoramic sunroof. The vehicle’s off-road geometry is class leading. A best-in-class
The stepped roofline, a trademark design feature for the approach angle (34°), ramp angle (27.5°) and departure angle
previous four generations, can also be found on the new (30°) enable negotiation of the toughest of obstacles. All
Discovery as well. Terrain Progress Control (ATPC), which is a state-of-the-art
INTELLIGENT VERSATILITY system enhances control over challenging surfaces while
New Discovery’s intelligent versatility optimizes interior space. launch Control enables smooth pull-away on surfaces like wet
The world’s first Intelligent Seat Fold system enables grass, ice and sand and maintains a constant speed between
configuring the seating arrangement from inside the vehicle, 1.8 km/h and 30 km/h.

33 November 2017

Honda Rolls Out 125 CC Scooter ‘GRAZIA’

Honda Motorcycle and Scooter India (HMSI) unveiled new Segment First Features
advanced urban scooter “GRAZIA” on November 8. Honda GRAZIA is the first scooter in India with a factory fitted
As a market leader of scooterization, with biggest portfolio of LED headlamp. It forms a blend of great aesthetics and superb
6 existing scooter models, GRAZIA is the NEXT BIG INNOVATIVE visibility. Compared to traditional halogen based headlamps,
ADDITION in its scooter range. LED lamps promise a brighter light, better spread, more
GRAZIA is set to create new excitement with its advanced focused and wider beam.
technology, innovative industry first features and sharp design Creating a new benchmark is the advanced cockpit in GRAZIA.
lines. The fully digital Instrumentation brings together modern
Minoru Kato, President and CEO, HMSI, said, “In the last 16 technology and beauty while the silver garnish adds a touch
years, Honda 2-Wheelers India has grown exponentially from of elegance. Apart from the speedometer, trip meter,
a humble 54,000 units in the first year to 3 lakh+ scooter sales odometer, fuel gauge and clock, the instrumentation also gets
in a single month now. Today every 2nd scooter customer in a tachometer.
India is celebrating the freedom of mobility on a Honda The segment first 3-step eco-speed indicator is the first such
scooter. Adding more excitement to the premium scooter innovation, which shows realistic mileage information.
segment, the Honda GRAZIA is the most advanced scooter in Taking convenience to the next level, GRAZIA gets a 4-in-1 lock
its category. With many Industry first feature like LED head with seat opener switch. The rider no longer needs to take
lamp, fully digital meter with 3 step speed Eco speed indicator, out the key and open the seat lock from the rear. Bringing the
customers can now step into the future and see the world in key to the seat mark, the rider just has to push the one side
new light with pride, backed by Honda’s high quality and functioning switch.
superior reliability.” GRAZIA gets a unique utility pocket to keep the mobile phone
Honda Reliability & Trust safely. An optional smartphone charger is also on offer.
At the heart of GRAZIA ticks the trusted 125 cc Honda BS-IV The chiselled tail lamp and split grab rail portray a modern
HET (Honda Eco Technology) engine, which promises the image while the 3-tone spiky head unit adds a sharp & sporty
perfect balance between mileage and power. The refined and character. The 3D logo emblem on side panel & the matchless
compact engine delivers 6.35 kW of power and 10.54 Nm of Honda badging on the floor panel gives the GRAZIA a
torque. The engine promises improved combustion, reduced personality.
friction and better cooling to bring out the best performance. Colours, Variants and Availability
GRAZIA comes equipped with Combi Brake System (CBS) with GRAZIA comes in six attractive colours: Matte Marvel Blue
Equalizer technology. The unique Equalizer in Honda’s Metallic, Neo Orange Metallic, Pearl Amazing White, Pearl
advanced Combi Brake System (CBS) distributes braking force Night Star Black, Matte Axis Grey Metallic and Pearl Spartan
proportionately between front & rear wheels simultaneously Red. Priced at Rs. 57,897 (Ex-Showroom, Delhi), GRAZIA is
by pressing the left lever resulting in reduced braking distance available in standard, standard alloy and deluxe variants.
& improved balance compared to conventional braking.

November 2017 34

New on Wheels

Renault CAPTUR Launched in India

Renault India launched most stylish SUV – CAPTUR on The stylish SUV delivers the next level of drive experience
November 6, at an attractive introductory price of Rs. 9.99 enabled by the One Integration concept, Renault’s design
lakh (All India). approach that seamlessly connects car and driver.
Commenting on the launch of Renault CAPTUR, Sumit Powered by 16 valves 4-cylinder 1.5L H4K petrol engine, mated
Sawhney, Country CEO and MD, Renault India Operations, said, to a 5-speed manual gear box, produce 106 PS at 5,600 rpm
“With its stunning design which represents Renault’s new and 142 Nm of torque at 4,000 rpm that delivers a mileage of
design DNA, Renault CAPTUR delivers on our promise of 13.87 kmpl while 1.5L K9K diesel engine (common rail
bringing the best from Renault’s global product range to India. injection), mated to 6-speed manual transmission, delivers a
Its expressive design is enhanced by premium & class-leading maximum power of 110 PS at 3,850 rpm and peak torque of
features and the high levels of personalization that can be 240 Nm at 1,750 rpm and offers a mileage of 20.37 kmpl (ARAI
achieved to best suit the customers’ preferences. Together certified).
with launching products of global repute, it is important to With a reinforced body for optimum safety, Renault CAPTUR
have a strong ‘India strategy’, offering customers a compelling is equipped with a host of active and passive safety features
value proposition. Renault CAPTUR will set new benchmarks across all variants including dual airbags, Antilock-Braking
with its global styling and unmatched road presence, further System (ABS) with Electronic Brake Distribution (EBD) &
strengthening our position in the burgeoning SUV segment.” Brake Assist, rear defogger, rear wiper & washer, 2 lateral
CAPTUR’s expressive design is accentuated by its Innovative ISOFIX – child seat anchor, height adjustable seat-belts and
Lighting Systems (ILS), which combines iconic design with speed sensing auto door lock. Additionally, Renault will
cutting-edge technology, providing high impact illumination offer side airbags, Electronic Stability Control (ESC) and Hill
while being highly energy efficient. Renault will offer several Start Assist, Cruise Control with Speed Limiter, LED front
premium design enhancements on CAPTUR including the fog lamps with cornering function, auto head lamps and
iconic Sparkle full LED headlamps with unique floating rain sensing wipers.
indicators, Ripple Tail Lamps, which perfectly complements CAPTUR is equipped with modern hi-tech solutions which
the LED ambient lighting inside the car and R17 Crystal Cut makes driving comfortable and pleasant. These include the
alloys, amongst others. smart access card, the Infinity Instrument Cluster enabling a
Renault CAPTUR comes loaded with more than 50 premium complete cockpit experience, a user-friendly new generation
features as standard offerings from the starting variant Intelligent ULC 3.0 multimedia navigation system with a 7-inch
onwards. These include projector headlamps, C-shaped display, voice recognition (for iOS), maps along with
Sapphire LED DRLs, fully automatic temperature control with temperature and time display.
rear cooling vents, integrated audio system with USB & Aux- Another highlight is the top-end Renault CAPTUR PLATINE
in and Bluetooth, steering wheel controls, pushbutton start which makes its debut in India. ‘Platine’ is the most premium
with remote central locking, dual airbags, Antilock-Braking version across Renault cars, used discerningly for very exclusive
System (ABS) with Electronic Brake Distribution (EBD) & Brake offerings
Assist and rear defogger with wiper.

35 November 2017

Upgrades & Variants

Mercedes-Benz Introduces AMG CLA 45 and GLA 45 4MATIC

India’s leading luxury car manufacturer, Mercedes-Benz India TECHNICAL SPECIFICATION
introduced two new AMGs - CLA 45 and GLA 45 4MATIC - on
October 27. Mercedes 45 AMG boasts of the ‘most powerful Performance Data Mercedes-AMG Mercedes-AMG
four-cylinder series production engine in the world. With the CLA 45 GLA 45 4MATIC
introduction of these two new AMGs, Mercedes-Benz India is
making a strong statement in the growing performance car Engine 2.0-litre 2.0-litre
segment. Both the vehicles offer a host of new features and 4-cylinder 4-cylinder
embody dynamism, sportiness, exceptional driving turbo engine turbo engine
performance and agility. Continuing the global celebration of
50 years of AMG, the vehicles were launched by Roland Folger Displacement 1991 cc 1991 cc
- MD & CEO, Mercedes-Benz India.
Speaking at the launch, Roland Folger said, “Performance Power 280kW @ 280kW @
car segment in India is fast evolving and hence product 6000 rpm @ 6000 rpm
innovation becomes crucial to outpace the industry growth.
Driving performance remains the key essence of our Torque 475 Nm @ 475 Nm @
renowned sub-brand Mercedes-AMG and we lead the 2250-5000 rpm 2250-5000 rpm
performance segment in India by a wide margin. As a part of
our global celebrations of 50 Years of AMG, we are glad to Acceleration 4.2 seconds 4.4 seconds
launch seven AMGs this year and end the year with the (0-100 km/h) (0-100 km/h)
introduction of these two sensational young products from
our diverse portfolio. These alluring and radical products Top Speed 250 km/h 250 km/h
appeal to those, who believe in ultimate driving
performance, everyday practicality and unmatched luxury Key Highlights
appointments. We are committed towards providing the best
of our global AMG products to our Indian customers and • Up-to-date AMG design idiom conveying intense dynamism
continue leading in this segment.” • Front apron with new A-wing design - clear differentiation
Folger further added, “With our AMG 45 range, we provide
our customers a product that embodies the motorsport DNA from AMG Line as a result of louvres in the outer air
while adding the practicality of everyday use. Mercedes-AMG intakes and diffuser insert in rear apron
CLA 45 and GLA 45 4MATIC have been modified keeping in • Front splitter insert in matt titanium gray plus flics in high-
mind the changing Indian market sentiments and to suit the gloss black for the flow of cooling air
young generation’s requirements. We are confident that these • LED High Performance headlamps
new exciting products would create a stronger fan following • Newly designed AMG spoiler lip
for AMG in India.” • AMG radiator grille with twin louvres in silver chrome
• New standard wheel: 45.7 cm (18-inch) 10-spoke light-
alloy wheels, painted in titanium gray and high-sheen finish
• AMG instrument cluster with new-look numerals and
scale divided into 30 km/hr increments.

November 2017 36

Upgrades & Variants

Ford India Launches New EcoSport

Ford India introduced stylish, powerful and connected new Technology on your side
EcoSport with a starting priced at Rs. 731,200, Ex-Showroom, The new sub-4-metre compact SUV offers Ford’s in-car
New Delhi, on November 9. infotainment system SYNC3, which allows to control the
Comprehensively redesigned with more than 1,600 new parts, entertainment, climate settings, as well as connected
the new EcoSport is featuring rugged new looks, sleek interior smartphone, with voice commands.
makeover, a raft of ingenious technologies and a new engine, This latest edition of Ford’s globally renowned in-car
offering more power & efficiency. connectivity system is Apple CarPlay and Android Auto
"The new EcoSport comes with a formidable combination of compatible, which allows to make phone calls, access their
fun, style and technology," said Anurag Mehrotra, President music, send and receive messages, get directions and more.
and MD, Ford India. "With its best-in-class power, safety, Space on your side
convenience and value proposition, it delivers significantly more The new compact SUV’s interior is emotive and user-centric,
at the same price." inspired by smart devices and tablets.
Style on your side Ergonomic design contributes to a spacious and premium feel.
The new EcoSport builds on the dynamic appeal of its A centrally located media bin makes it easy to stow a
predecessor, starting with a reshaped front, and a large upper smartphone while charging.
trapezoidal grille and lower grille. The media bin is one of 27 compartments throughout the
The sculpted hood features a wider central dome for a more EcoSport’s cabin, offering convenient places for coffee cups,
muscular appearance. A continuous line running from the bottled drinks, sunglasses and umbrellas. The boot offers
beltline along the edge of the hood accentuates sleek new flexible cargo space with adjustable floorboard.
headlamps with LED daytime running lights. Safety on your side
New Ford EcoSport features bold fog lamps and bigger 17- Continuing its lead on safety, new EcoSport offer up to six
inch alloy wheels with top-of-the-line Titanium+ variant. airbags - dual front driver and passenger side airbags - along
Fun on your side with ABS as standard equipment across all variants.
Equipped with new three-cylinder 1.5-litre Ti-VCT petrol The compact SUV has been built strong using high-strength
engine mated to five-speed manual transmission, the new steel and will feature a host of safety features including
EcoSport delivers 123 PS of power & 150 Nm of torque and emergency brake assist, traction control system, impact
fuel-efficiency of 17 kmpl, while a new six-speed automatic absorbing door panels and steering wheel among others.
transmission that offers smooth, precise shifts across all Colour
powertrain options. New EcoSport is available in five trims with seven colour
In diesel variant, the new EcoSport comes in 1.5l TDCi engine options – Lightning Blue, Canyon Ridge, Race Red, Diamond
mated to a five-speed manual transmission that delivers best- White, Absolute Black, Moondust Silver and Smoke Grey.
in-class 100 PS power and fuel-efficiency of 23 km/l.

37 November 2017

Upgrades & Variants

Bajaj Auto Introduces Pulsar NS200 with ABS at Rs. 1,09,715

Bajaj Auto introduced an ABS variant to its highly successful TECHNICAL SPECIFICATION
Pulsar NS200 at a price of Rs. 1,09,715 (Ex-Showroom, New
Delhi) on November 2. Engine 4 - stroke, SOHC 4-Valve, Liquid Cooled,
Pulsar NS 200 is a next generation sports bike with an Triple Spark, BSIV DTS-i Engine
aggressive muscular form, which seeks to set new benchmarks Displacement 199.5 CC
in technology and performance. The definitely male Pulsar Max power 23.5 PS @ 9500 RPM
NS200 comes with 200cc a liquid cooled four valve, triple spark Max torque 18.3 NM @ 8000 RPM
DTS-i engine and delivers raw power of 23.5 PS with Suspension Front: Telescopic with Anti-friction Bush
outstanding stability and safety. Rear: Nitrox mono shock absorber with Canister
The bike comes with ABS in combination with bigger disc Brakes Front: Single Channel ABS, 300 mm Disc (ABS)
brakes and perimeter frame to provide the highest level of Rear: 230 mm Disc
stability and control for the rider and ensure ultra-safe braking
over any surface. Tyre Front: 100/80-17" 52 P Tubeless
Commenting on the introduction of the Pulsar NS200 ABS, Rear: 130/70-17" 62 P Tubeless
Eric Vas, President, Motorcycles, Bajaj Auto, said, “We have
received a large number of requests from our customers for Fuel Tank 12 litres
ABS and, hence, we are extending it to the NS200. We are No.
1 in performance in Naked Sports bikes with our NS200 with Dimensions 2017 mm (L) X 804 mm (W) X 1075 mm (H)
a huge fan following among young, performance seeking
motorcycle enthusiasts due to its world-class quality and style, Ground clearance 169 mm
backed by and its thrilling performance. The introduction of
the ABS variant will enhance the bikes performance appeal Wheelbase 1363 mm
and strengthen our leadership in this performance segment.”
Kerb weight 154 kg

Pulsar NS200 ABS is available in 3 colours - Wild Red, Mirage
White and Graphite Black and is currently introduced in all
metros and will be progressively available across all dealerships
in the country

News Basket

Volkswagen Expands Footprint in
Maharashtra

Volkswagen inaugurated its 4th showroom – Volkswagen Pimpri periodic maintenance. The state-of-the-art facility is equipped
Chinchwad – on November 3 in Pune, Maharashtra. with solar panels sourcing its 70% of the power requirement.
Speaking on the occasion, Steffen Knapp, Director, Volkswagen The showroom will be operational under the able leadership
Passenger Cars, Volkswagen Group Sales India said, “Working of Shailesh J Bhandari, Director, B U Bhandari Auto Pvt Ltd.
in alignment with our expansion plans, the inauguration of The sales and service personnel at Volkswagen Pimpri
the new showroom is a step towards providing convenience Chinchwad are professionally trained to assist customers with
and comfort for our customers in the region. Our association buying and servicing Volkswagen vehicles, which also includes
with customers goes beyond the realm of sales. Therefore it the newly launched Passat, Tiguan, GTI and the Ameo.
is our constant endeavour to provide them with a holistic car On this special occasion, the 13,101th car from the BU Bhandari
buying and after-sales experience. The new facility located Auto Pvt Ltd was also delivered to its first customer.
on the outskirts of Pune is built to accommodate our growing The inauguration of Volkswagen Pimpri Chinchwad, Pune will
customer requirements with an aim to build a strong network, cover a total network of 126 showrooms in 106 cities across
thereby facilitating seamless service delivery in the city.” India.
The new 3S facility, located at Wakad, on the Mumbai-
Bangalore Highway, is equipped with 8 car display areas, 54
service bays, a paint and body shop and with adequate spares
stock. The facility will also provide customers the convenience
to avail express services, aimed at meeting requirements for

Super Performer Next Gen VERNA Outshines

Hyundai Motor India (HMIL), announced on November 2, and a landmark in Hyundai growth story winning many
outstanding performance continuing the strong momentum prestigious accolades worldwide.”
of its recently launched Next Gen VERNA in India. The Super Human Technology Connect
sedan has set new benchmark for the segment and received Next Gen VERNA is ‘Intelligent by Design’ and an All-rounder
more than 20,000 bookings and more than 150,000 enquiries car with Human Technology Connect for new age aspirational
in a short span of 2 months of its launch in India and has customers. More than 45% of the Next Gen VERNA customers
become customer’s first choice. look for premium and segment unique comfort features. Next
Commenting on this achievement Y K Koo, MD & CEO, HMIL Gen VERNA offers 21 new age technologies and advanced
said: “Next Gen VERNA has outperformed in India once again features such as, Front Ventilated Seats, Smart trunk, Smart
with more than 20,000 bookings and 150,000 enquiries in a Sunroof, Eco Coating Technology and new Telematics System.
short span of 2 months of its launch in India. We are extremely Setting the New Trend
thankful to our Indian customers for their trust in brand - Next Gen VERNA has led to a new trend of first time car
Hyundai. Next Gen VERNA is beyond the ordinary, a global
product that personifies Hyundai’s Modern Premium Brand buyers contributing to 20% of its total sales. These Next
Gen customers are trendsetters and resonate with the
Modern Premium Brand Image of Hyundai.
- More than 25% of Next Gen VERNA have preferred
Automatic Transmission over Manual Transmission
depicting flawless performance of AT variant of Next Gen
VERNA in both Petrol and Diesel engines.
Expanding the Segment
With the launch of Next Gen VERNA, the Mid-High Segment
average sale of 14,000 units (H1) crossed average 20,000 units.

39 November 2017

News Basket

Mahindra & Mahindra Wins FICCI’s Road Safety Awards 2017

Mahindra & Mahindra (M&M) won the "Role of Corporates The Award was jointly received by M&M with JP Research India
in Road Safety" award at the FICCI Road Safety Awards 2017 (JPRI). JPRI received the award for its Road Accident Sampling
for its flagship project, the 'ZERO Fatality Corridor on the System - India (RASSI)-Mumbai-Pune Expressway Project.
Mumbai-Pune Expressway' under the Road Safety Analysis The FICCI Road Safety Awards aim to recognize and felicitate
and Action Category. impactful road safety initiatives undertaken by Government
bodies, Corporates and Individuals. The awards also promote
corporate programs that are designed to mitigate or reduce
road risks.
M&M won the award for work done in the areas of Engineering,
Enforcement, Emergency Care and Education on the Mumbai-
Pune Expressway that has led to a reduction in accident
fatalities. The project is a pioneering attempt to reduce the
number of road accident deathson the Mumbai-Pune Expressway
from an annual average of 140 to 0 by the year 2020.
Vijay Nair, VP - Employee Relations (Auto Division), Admin &
CSR, M&M said "As a responsible corporate citizen, we at
Mahindra are committed to the cause of Road Safety. Our
initiative, the 'ZERO Fatality Corridor' on the Mumbai-Pune
Expressway yielded significant results over the last twenty
months and we are determined to further our progress."

Mahindra Opens New HQ and Manufacturing Facility in Detroit

As a strong indication of its growing presence in North America, Rick Haas participated in the facility inauguration along with
Mahindra Automotive North America (MANA) opened a new Michigan Lieutenant Governor Brian Calley and Members of
North American HQ and manufacturing operation today, the Congress Brenda Lawrence and Dave Trott. The event was also
first such new OEM facility in Southeast Michigan in over 25 attended by elected officials, business leaders and Mahindra
years. employees.
The expansion is part of a $230 million investment in "This is an exciting day for Mahindra, our terrific employees
Southeast Michigan that also includes a recently-opened and Detroit. I couldn't be prouder to be here to help open
warehouse and logistics operation in Pontiac and an this new facility today," said Anand Mahindra. "This building
existing prototype operation in Troy. In total, Mahindra has opening represents our company’s growing presence in North
grown to 400,000 sq. ft. across three Detroit area facilities. America and locally in the Metro Detroit area where we have
Over the past 18 months, MANA will have tripled its tripled our workforce during the past 18 months. We are
workforce to 250. By 2020, additional planned projects will committed to growing the Mahindra brand in North America
result in 400 more jobs and another $600 million in local and Michigan."
investment over that same period. In addition, MANA will "This expansion represents a milestone for us and for
continue to provide Metro Detroit-based engineering Michigan," said Haas. "We started this operation with seven
support for new vehicle platform development for India people four years ago - to be crossing the 250 mark is a
and global markets. testament to the hard work of our employees and what this
The new facility will produce an off-highway vehicle which region has to offer in terms of top automotive talent."
will extend Mahindra's current position in this growing Mahindra was recently named as one of five vehicle
segment. Designed and engineered by MANA, the vehicle manufacturers selected by the United State Postal Service
promises to be unlike anything currently on the market. (USPS) to produce prototype delivery trucks for testing and
Mahindra Group Chairman Anand Mahindra, Automotive evaluation. At the request of the USPS, details about the
Division EVP Rajan Wadhera and MANA President and CEO, program will be available at a later date.

November 2017 40

News Basket

Toyota Signs MoU with Andhra
Govt for Feasibility Study on EVs

Toyota Kirloskar Motor and the Government of Andhra
Pradesh signed the MoU to start the feasibility study towards
introduction of “Prius PHEV” and “Small EV Commuter” at
Amaravathi on November 16.

Toyota Kirloskar Motor MD - Akito Tachibana and Andhra executing the feasibility study on introduction of Toyota’s
Pradesh Government officials - Nara Lokesh, Cabinet Minister electrified vehicles “Prius PHEV” and “Small EV Commuter”
for IT, Panchayati Raj & Rural Development; K Vijayanand, into AP Goverment’s ambitious smart city project at
Principal Secretary, IT & Communications Department; and Amaravathi. Toyota sincerely appreciates Government’s
Tirumala Rao Chamalla,CEO, Electronics & IT Agency were ambitions to reduce the pressing issue of pollution in the
jointly witnessed the signing ceremony. country through electrification of vehicles.”

The MoU is the commitment of Toyota and Government of
Andhra Pradesh to mutually work together to solve the grave
issue of pollution ensuring smooth introduction of plug-in We will continue our efforts to bring in the best technologies
hybrid and electric vehicles in the state. This is in line with towards solving the national issues of rising pollution and fuel
Toyota’s Environment Challenge 2050 ttoheaeclheicetvreifizceartoionCOof2 import with the right direction from Government” added
emissions. Toyota globally believes that Tachibana.

vehicles is required to reduce CO2 emissions. Globally Toyota has been a leader in introducing alternate

Sharing his thoughts on the occasion, Akito Tachibana said electric mobility solutions as HVs, PHVs, FCVs, to help reduce
“We would like to acknowledge the proactive support and trehdeuCcOed2 emissions. Over 85 million tons of CO2 has been
cooperation extended by Government of Andhra Pradesh in by these electrified vehicles globally

41 November 2017

Surveys & Studies

Maruti Suzuki Most Considered Brand for 13th Consecutive Year,
J D Power Finds

With a greater number of shoppers relying on online sources counterparts (66% vs 64%, respectively). As a likely
for their vehicle research, the use of traditional sources, such consequence, fewer women than men visit multiple
as newspapers and magazines, is declining, according to the brands’ dealerships while shopping for their new vehicle
J D Power 2017 India Escaped Shopper Study (ESS), released (49% vs 60%, respectively).
on November 9. • Willingness to spend more: Although “total price too
Nearly two in three (64%) shoppers use the internet when high” remains the main reason for shoppers to reject a
researching which vehicle they plan to purchase, up from 58% model, they are more willing this year to consider another
last year and an increase of 28 percentage points since 2012, vehicle, which is up to Rs. 150,000 more expensive than
when it was 36%. In 2012, 50% of all shoppers said they used the one they eventually purchased. Five years ago, this
newspapers and magazines while researching for their new price ceiling was much lower at Rs. 100,000.
car. This year, however, only 24% say the same. • Brand most often considered by shoppers: Maruti Suzuki
“As online channels have now become the starting point for is the most considered brand among new-vehicle shoppers
more car buyers, shoppers today are increasingly better for a 13th consecutive year, with 45% of all shoppers
informed of the alternatives available to them even before purchasing one of its models, which is the same as last year.
they enter a dealership,” said Shantanu Nandi Majumdar, • Customer retention improves: Overall customer
Director at J D Power. “That said, dealers will continue to play retention this year is 40%, up slightly from 38% in 2016.
a pivotal role in the shopping process. However, they will need The 2017 India Escaped Shopper Study is based on responses
to evolve, with support from their OEMs, to develop a stronger from 7,831 buyers and 3,374 rejecters of new cars and new
online presence with information that customers desire, for utility vehicles who purchased their vehicle between
instance, deals/ promotions, test drive bookings, delivery time September 2016 and April 2017. The study, which examines
and stock level, among others.” the reasons new-vehicle shoppers consider but ultimately
While shoppers continue to visit the manufacturer’s website reject certain models in favour of another, was fielded from
while conducting their research, for the past three years, March through September 2017.
increasingly more are turning to social networking sites, such
as Facebook and Twitter (25% in 2017 vs. 8% in 2014). Older
shoppers (50 years and older) are also turning to the internet
for their information needs, compared with three years ago.
This year’s study finds that there is an increase of 10
percentage points from last year in the proportion of older
shoppers accessing social networking sites while shopping for
their vehicle (26% vs. 16%, respectively).
This year, there are fewer shoppers visiting the dealerships of
multiple brands before making a purchase. Five years ago, 82%
of shoppers visited at least one other brand’s dealership not
including the one they purchased from. In 2017, only 59%
have visited at least one other dealership. This decline in visits
to physical dealerships is also observed in the decreasing
proportion of vehicle buyers who visited multiple dealers of
the same brand before making a purchase. In 2012, 51% of all
new-vehicle buyers visited at least one other dealer of the
same brand, compared with 26% in 2017.

Key Findings

• More female shoppers connected online: Female
shoppers use the internet more often than their male

November 2017 42

Surveys & Studies

Hyundai Ranks Highest Among Mass Among the factors, the greatest decrease (-3 points) is in
Market Brands service initiation, service advisor and service facility.

In an another study viz. J D Power 2017 India Customer Service • The quality of service remains a critical driver of
satisfaction. The study finds that 87% of vehicle owners
Index (Mass Market), released on October 31, reveals that say that the work carried out was right the first time and
Vehicle owners in India are increasingly placing a greater level
of importance on communication and interaction with the that their vehicle was washed and vacuumed. Overall
service advisor during their after-sales experience. satisfaction among these customers is 13 points higher
than among those whose work was not done right the
first time with vehicle not washed or vacuumed.
This key driver of customer satisfaction encompasses several
aspects, such as the performance of a thorough multi-point • Almost one-fourth (24%) of customers indicate that they
inspection around the vehicle; confirmation of consumer remained at the dealership throughout the entire service
requests; review and explanation of the work pre- and post-
service; and regular vehicle status updates. The study finds visit. Among these customers, 58% say they were provided
six or more amenities by the dealerships, compared with
that 79% of vehicle owners have received all such relevant 34% last year—an increase of 24 percentage points year
advisor-led communication, which in turn results in a 23-point
increase (on a 1,000-point scale) in satisfaction. Non- over year. Such amenities include refreshment counters,
compliance with these aspects results in a significant 41-point internet access, televisions and mobile charging points.

drop in satisfaction.

“While the quality of service remains a principal driver of
customer satisfaction in India, clear, proactive and frequent
communication from service advisors demonstrates a greater
commitment toward enhancing customer engagement,” said
Kaustav Roy, Director at J D Power. “Dealerships that are
successful in delivering on both service and improved
communication can expect to achieve stronger
recommendations and a higher customer retention level.”

Key Findings

• Overall satisfaction for this segment has decreased
marginally from lastyear by 3 points(877 vs880, respectively).

Study Rankings

Hyundai ranks highest in after-sales customer satisfaction, with
a score of 923. Maruti Suzuki and Tata rank second in a tie at
893.
The 2017 India Customer Service Index (CSI) Study is based
on responses from 7,878 new-vehicle owners who purchased
their vehicle between May 2015 and August 2016. The study
was fielded from May through August 2017.
Now in its 21st year, the study measures new-vehicle owner
satisfaction with the after-sales service process by examining
dealership performance in five factors (listed in order of
importance): service quality; vehicle pick-up; service advisor;
service facility; and service initiation. This study examines
service satisfaction in the mass market segment

43 November 2017

Fuel Watch

Stable Oil Prices Herald Sea Change for Strategic Petroleum Reserve

Steve Austin for OIL-PRICE.NET

Strategic Petroleum Reserve (SPR) is a repository of crude oil To take an analogy: Until now, the SPR behaved like a 401k or
for emergency purposes built primarily in countries dependent a “rainy day fund”. We saved mountains of crude oil so to use
on oil imports. Stored in four deep underground salt caverns them when needed much like a well stocked nuclear bunker.
along Texas and Louisiana Gulf coasts, SPR in the US is the Well, has the constant called ‘change’ swept by? Indeed, yes.
world’s largest. Its intended purpose is to cushion against From now on, SPR will instead act more like a pension plan,
sudden shocks in the oil market. Even with an enormous social security or annuities. Actually, the supply of oil is so
capacity of 727 million barrels, SPR managed to reach its full diversified that major disruptions are unlikely to stop the flow
potential in December 2009. of oil very much. After all, oil production at about 9.5 million
In the 80s, the Reagan Administration increased the volume barrels a day is no mean fact.
from 270 million barrels to about 590 million barrels. Later Which begs the next question - What about the formidable
the Bush administration pushed it to the present capacity. As amount of oil we import? Well, the imports are still steep
of August 2017, the SPR inventory stood at 259.8 million because of complex technicalities involving
barrels of sweet crude and 419.1 million barrels of sour crude refineries, pipelines and oil contracts. Besides, as a matter of
totaling 678.9 million barrels. That is roughly about 95 days pride, the US can extract massive quantities of oil domestically
of stockpile in case of import cut-offs. By a rule of thumb, SPR using modern unconventional methods at a moment’s notice
holds oil worth 90 days of supply. With refineries piled profusely thanks to the ”American Oil Revolution”.
along the coast, sweet crude is usually withdrawn first as, unlike Recently, the Trump administration has proposed selling half
the sour crude, almost all local refineries can process it. the oil in SPR. Which means two of the four caves will face
Technically, the idea of a storage system for emergency was closure. Does the US need a buffer like SPR anymore? We take
mooted in 1944. However, SPR became a reality only in 1975 a look:
with the Arab oil embargo on US. That is, the Organization of The motivations (or 7 reasons why SPR ought to go)
Arab Exporting countries (OAPEC) placed an embargo on the 1. OPEC struggles
US in 1973 leading to commodity shortage resulting in a The world has moved on and in this new order OPEC does not
dramatic- threefold- increase in the price of oil. The embargo carry the weight it did in 1973. Since Saudi Arabia effectively
proved to be the catalyst for the birth of SPR by President Ford. destroyed OPEC’s cohesion, there is little the cartel can do.
SPR, obviously, has plenty of oil. In which case, can oil be taken Say, a tiger without its fangs. Clearly, it can’t force the vote for
from SPR at will? Well, not at all. Any full or limited withdrawals another embargo because its members distrust the Kingdom.
can be made only on the authorization of the President under Also, Saudi Arabia has cornered itself into a dire financial
the Energy Policy and Conservation Act (EPCA). Emergency situation. To finance its budget and social expenditure, Saudi
release can be done in three ways: Arabia needs crude oil over $80 a barrel. With oil price lagging
1. A full release during severe supply crunch below and around $50 a barrel, Saudi Arabia is already under
2. Limited withdrawal as during hurricane Katrina tremendous pressure.
3. Small releases for test sales or loans

So far, drawdown has been used only three times, the most Furthermore 9/11 families are now allowed to sue Saudi’s US
recent being the 30 million barrels of crude sold in June 2001 assets. The results of the judgment will change the economic
due to supply disruptions in the Middle-East. relationship between the US and Saudi Arabia. In two to three
Rising oil production years, depending on the efficiency of the court system, we’ll
Note that, as we mentioned earlier, SPR is more of a tool for know the exact ramifications. Already, in reality ”the US does
oil importing countries. So, what about the US? After all, not perceive OPEC cartel - and its leader Saudi Arabia - as a
according to the latest EIA figures on August 23, 2017, crude serious threat anymore. Saudi Arabia has lost the capability
oil production surged by 26,000 barrels per day (bpd) to to instigate a new oil shock, be it today or in the foreseeable
9,528,000 bpd between August 11 - 18. In fact, oil production future, the original reason for SPR. Therefore now is a good
is at its highest since July 2015. time to morph a new SPR, more in tune with today’s
geopolitical realities.

November 2017 44

Fuel Watch

2. Domestic oil production 6. Political mileage
Today’s geopolitical reality of crude oil is that the US, thanks The SPR has had very little use since it came into effect but its
to technical progress not available in 1973, can come up with cost is greater. Infrastructure needs upkeep. Of course, SPR
enough crude oil to rival Gulf producers as it did in has also been used as political scoring points: With high price,
2014. Fracking, unconventional drilling can extract crude oil some oil was indeed released so as to lower price at the pump
from depths and terrains unfathomable before. More and “appease” consumers. However, this is not what SPR was
importantly, its orchestration can happen on a moment’s for. Political scoring point is not what the SPR ought to be.
notice as proved by the North Dakota oil rush. So rather than After all, crude is an international commodity which could be
rely on a 401k-style crude-accumulation reserve, the new SPR bought for a price.
vision can be a “drill as you need” plan. 7. China’s own SPR
Asit is, theUS still importscrude mainly because the lightoil cannot China has been bolstering its reserves too. OIL-PRICE.NET
be processed by the refineries built to handle heavier crude. That analysts estimate about 600 million barrels of crude in storage
is slowly changing. Many refiners have already announced plans tanks and China’s SPRs. China imported about 8.55 million
to ‘run’ more light and sweet crude moving away from the heavy, barrels a day in the first half of 2017, which is a tad more than
sour crude imported from OPEC and Venezuela. the 8.12 million barrels a day imported by the US. A few weeks
3. Pipelines ago, one of the world’s largest oil tanker, TI Europe, offloaded
The Keystone XL pipeline fits nicely in the picture. The three million barrels of Middle Eastern Crude in China. Here,
proposed 1,179 mile pipeline was granted permit in March by China is following the footsteps of the US- would you believe
the Trump administration. As a result, the pipeline will bring that China copies America a bit too much? SPR is no exception.
Canada’s oil to US refineries. With the pipeline now on the Predictably China’s buildup will act as a dampener on oil
cards, our oil-rich peaceful neighbor to the North will be happy pricefluctuations: in the (unlikely) event that oil price jumps
to oblige if the going gets tough and so the prohibitive cost of quickly, China will partially source oil from its huge reserve,
containing 90 days of supply becomes hard to justify. After curbing demand and sending oil prices lower.
all, Western Canada select is the cheapest crude available. What China’s move means is even more oil price stability. In
4. President Trump effect this transfers some of OPEC’s oil price control to China
With Trump as President, there is only one way for the volume which in turn is eager to assert itself on the global scale. In
of oil to move - upward. Previous offshore closures will be fact assuming some control on the oil prices (by counteracting
undone to facilitate more drilling. More oil means lower price, the cartel’s mechanism of price control) is the most likely
which is the law of the market. US oil is reaching different motivation for the Chinese in building a reserve.
corners of the globe, already. The first shipment of oil from Conclusion
the US, worth $100 million, is all set to touch the Indian shores SPR is really an economic tool to counteract OPEC’s ability to
this September. As far as imports to China go, from an average direct oil prices by controlling supply. SPRs allow countries to
shipment of 10,000 barrels a day the figures jumped to affect oil prices by controlling demand externally and
131,000 barrels a day for the first seven months of this year. protecting internal economies from untenable variability. As
Effectively, the law of the cartel is over, supplanted by the law OPEC’s clout gets reduced, the ground realities ought to
of the market. Hence oil ought to trade like any other change too.
commodity without artificial price fixing by OPEC. Now we With prices relatively high in the $50s, it’s good to shed some
don’t have a “strategic cattle reserve” or “strategic corn of the SPR (sell high). Should oil prices fall, as more oil comes
reserve” for other freely traded commodities, do we? to the market, the offloading would stop effecting massive
5. Futures Market loss. So why wait?
The oil crisis of 1979 led to the creation of futures market with As oil price dynamics stabilize worldwide and powerful
the New York Mercantile exchange - officially - starting oil trade economies such as China increase the size of their SPR, oil
in 1983. Now we can hedge oil to the tune of more than two prices will see even less fluctuations. This gives the US a good
billion barrels of oil against future fluctuations. Emptying the reason to reduce its SPR by letting China’s economy “subsidize”
SPR and investing in futures market is something the the counteraction of OPEC’s price control rather than the US
government must ponder on. With the option of futures, the taxpayers
need to hold oil as SPR makes little sense.

45 November 2017

Consumer Case Studies

National Consumer Disputes Redressal Commission, New Delhi

Anup K Thakur, Presiding Member

Baljit Kaur – Petitioner

Versus

Divine Motors and Anr – Respondents

Revision Petition No. 1336 of 2017 Decided on 08.06.2017

(Against the Order dated 09.03.2017 in Appeal No. 818/2016 of the State Commission Punjab)

Consumer Protection Act, 1986 – Section 15, 17, 19 and 21 – Automobile Manufacturing Defect – Sale of defective vehicle –
Manufacturing Defect as alleged has not been proved before Fora below by reference to any expert report in this regard –
When a Manufacturing Defect is alleged, onus of proof has to be on Complainant – Affidavits are no substitute for an
expert opinion to hold that vehicle was indeed suffering from some Manufacturing Defects – Order of State Commission
upheld - Revisition Petition dismissed. (Paras 10 to 12)

Important Point

When a Manufacturing Defect is alleged, onus of proof is on the Complainant.

Order

1. Ajit Bharihoke, Presiding Member - Anup K Thakur, 4. Opposite Party be directed to take back his defective
Presiding Member - This Revision Petition has been filed vehicle after repaying the amount paid by the
by the Petitioner/Complainant – Baljeet Kaur against the
order of the Punjab State Consumer Disputes Redressal Complainant, as the Complainant does not want to retain
with him defective vehicle.
Commission, Chandigarh (for Short, ‘State Commission)
dated 9.3.2017 in FA No. 818 of 2016 vide which the 5. Compensation for Rs.20,000 be also granted to the
appeal had been decided in favour of the Appellant/ Complainant, as the Opposite Party had used abusive
Opposite Party No.1 – M/s Divine Motors. language and insulted the Complainant, when she visited
their showroom (i.e. by owner Simer and his servant)

2. Brief facts relevant for the disposal of this revision petition 6. Cost of the complaint be also granted.”
are as follows. The Petitioner/Complainant purchased a
scooter - Activa Alfa bearing registration No.PB02CBS7618 7. Respondent No.1 contested the complaint before the
on 19.5.2015 for a sum of Rs.49,719. It is alleged that on District Forum, questioning its maintainability and also
the very second day, the Complainant noticed that the on the ground that the complaint was bad for non-joinder
vehicle was going in one side, its handle was cracked and of necessary parties, namely, India Yamaha Motor Pvt Ltd.
its ‘chimta’ was also bent. This was brought to the notice The Respondent No.1 drew attention to the fact that the
of the Respondent No.1/Opposite Party No.1, who did Complainant was a novice in driving the scooter and
not pay heed and who instead got the signature of the therefore, suffered accident, which resulted in damages
Complainant on a paper to say that the scooter was beyond warranty. It is further submitted that the
working properly. The Petitioner/Complainant claims to Complainant came with the vehicle to the Respondent
have made a request for replacement of the vehicle, as No.1 on 2.6.2015 after she had met with an accident
the same was “absolutely in defective condition” and was resulting in damage to the muffler cover. This was replaced
“consuming the petrol to the maximum extent”. Holding against payment and the vehicle was handed over in a
the Respondent No.1 responsible for deficiency of service satisfactory condition to her satisfaction. Thereafter the
and for selling the defective vehicle, the Petitioner claimed Complainant again came on 18.6.2015, for first free
the following reliefs from the District Forum : service of her scooter. The vehicle was duly serviced, its
engine oil was changed against charge and the
3. “That the Opposite Party be directed to refund the Complainant went back satisfied. Thereafter, Complainant
amount of Rs.13,192 (Rs.9,000 + two instalments of Rs. again came on 3.8.2015, this time after an accident in
2,096 each) along with 20% p.a. interest thereon from which the handlebar had come out, ‘chimta’ had bent to
the date of purchase till the OP makes the payment. one side. However, it was found that ‘chimta’ was alright

November 2017 46

Consumer Case Studies

and the accidental handlebar was repaired. The pleaded that the State Commission erred in relying upon
Complainant again came back on 5.8.2015 with the fact that the Petitioner/Complainant did not possess
complaints of the scooter. The scooter was checked and a regular driving license but only a learner’s licence,
found to be alright. Another visit took place on 13.8.2015 thereby suggesting that this itself has no bearing on
in which the Complainant gave in writing the fact that whether the vehicle had any Manufacturing Defect or not.
she was satisfied. Soon afterwards, the Complainant
allegedly came back and asked that her scooter be 10. On a careful consideration of facts on record and the oral
replaced with a new one. submissions made by the counsel, it appears that the State
Commission’s order is based on a reasonable appreciation
8. Heard counsel for the Petitioner. The main ground on of all the facts and evidence placed before it. The
which the revision petition has been filed is that the State
Commission had not fully appreciated the facts of the case Petitioner/Complainant admittedly did not possess a
regular driving licence and was on the road with a learner
while allowing the appeal and setting aside the judgment driving licence. While it is true that this has no relation
of the District Forum. It was submitted that the very fact
that the Complainant had to repeatedly take the vehicle with any Manufacturing Defect, it is also true that the
Manufacturing Defect as alleged has not been proved
to the Respondents itself was sufficient to establish that before the fora below, by reference to any expert report
there was not only deficiency of service but also a
possibility of a Manufacturing Defect. In support, the counsel in this regard. When a Manufacturing Defect is alleged,
the onus of proof has to be on the Complainant.
cited judgment of this Commission in RP No.1407 of 2015 Admittedly, the Petitioner/Complainant had produced,
titled Joshi Autozone Pvt Ltd Vs Col S K Gawari & Ors II
(2016) CPJ 381 (NC) in which it has been held as below:- in support of her allegation of Manufacturing Defect, her
own affidavit along with affidavit of 7-8 more witnesses.
The District Forum correctly held – and the State
“The mere fact that a newly purchased vehicle had to be Commission concurred- that that these affidavits are no
taken to the workshop on a number of occasions is, per substitute for an expert opinion, to hold that the vehicle
se, tantamount to deficiency in service.” was indeed suffering from some Manufacturing Defect(s).
Further, the State Commission relied upon certain job
sheets placed before the State Commission and the 11. The fact that the Petitioner/Complainant was driving on
District Forum, which were allegedly fabricated a learner licence is certainly a reasonable explanation of
the accident that seems to have been responsible for the
documents. Hence, the order of the State Commission condition of the vehicle. This cannot be later on made to
was liable to be set aside.
appear like a Manufacturing Defect. The Respondent
9. The counsel for the Petitioner also submitted that both No.1, from the records available, did take care of the
the fora below erred in holding that there was no technical vehicle by way of necessary repairs and, therefore, cannot
report to substantiate the complaint that the vehicle had be held to have been deficient in service.
Manufacturing Defect. In counsel’s opinion, the Petitioner/
Complainant had put on record affidavit of an expert, one 12. In view of the discussion above, the revision petition is
Mr Navpreet Singh, a mechanic by profession and dismissed and the order of the State Commission is
proprietor of M/s Sanshu Service Point. The counsel also upheld. No order as to costs

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47 November 2017

NADA Musings

US Stands Alone as NAFTA Talks Resume

In the eyes of many trade observers, President Donald Trump’s TPP moving forward without the US changes the dynamics of
“America First” slogan has become “America Alone.” the NAFTA talks as they resume in Mexico.
The president has followed through on campaign pledges to Renegotiating NAFTA was a central tenet of Trump’s campaign
withdraw from controversial trade deals like the Trans-Pacific as he promised voters to bring back jobs, especially in auto-
Partnership. And he has made strident demands in talks with dependent states in the Midwest. NAFTA was enacted in 1994
Canada and Mexico over tweaks to the North American Free to create a free-trade zone between the US, Mexico and Canada.
Trade Agreement that appear to have imperiled the entire deal. On the campaign trail, Trump said he would end the trade
The remaining 11 countries that were part of the TPP - pact with Canada and Mexico and slap a 10 per cent to 35 per
including Canada and Mexico, as well as Japan - have taken cent tariff on vehicles and parts made in Mexico that are
steps toward the formation of a US-less agreement. That could imported into the US if NAFTA renegotiation is not a success.
strengthen Canada and Mexico’s hand in the next round of That could add $5,000 to $15,000 to the price of a car. Some
NAFTA talks, scheduled to begin Friday in Mexico City, because vehicles made by domestic manufacturers that are assembled
it shows other countries are still interested in forging global in Canada or Mexico could be hit with import tariffs.
trade deals without the United States. Michelle Krebs, senior analyst for Autotrader, said, “US
“Clearly there is a bargaining chip with the US,” said Linda automakers are rightly concerned about the fate of NAFTA
Lim, Professor Emeritus of Strategy at the University of because they are operating in a global market.
Michigan’s Ross School of Business. “Before this, everyone “We live in a global auto industry,” she said. “Global
thought they had a weak hand, which they did relative to automakers are looking for economies of scale. They obviously
the United States.” want to be a major player in China because it’s the biggest
Lim said, “The Trump administration has expressed a preference market in the world, but the US is also important because
for bilateral deals where the US has a big size advantage when North America is the second largest.”
it comes to economic factors like market size, but she Economic forecasters at the University of Michigan have said
questioned whether they will actually pursue any of them. that it is unlikely that the US will withdraw completely from
“The Trump administration prefers bilateral deals because they NAFTA, but they said Michigan’s economy can withstand the
think they have more power because every else is smaller than hit if the Trump administration does decide to pull the plug
us,” she said. “Business doesn’t like them because they are on the trade deal.
cumbersome. I don’t think they have the negotiating capacity The forecasters estimated that Michigan would gain 6,400 jobs
to negotiate a bunch of bilateral deals. The bullying part of it by 2020 in a “soft withdrawal” from NAFTA, where Mexico
gives everybody else incentive to be part of bigger deals.” and the US do not place additional tariffs on each others’
“The possibility of the NAFTA talks falling apart and the TPP exports, due to an increase in domestic light truck production.
moving forward without the US means there would be “a The economists said a “hard” withdrawal, where the countries
whole bunch of large regional entities, all of which exclude slap retaliatory tariffs on one another, would cost Michigan
the US” She noted that China also sought to form a Regional 7,000 jobs by 2020, with 3,900 of them coming from the
Comprehensive Economic Partnership with other nations that manufacturing sector.
are members of the Association of Southeast Asian Nations, “The imposition of a 25% tariff would spark a shift of nearly
including Japan, India and South Korea, Lim added.” one million automobile assemblies away from Mexico
In NAFTA talks thus far, US negotiators proposed increasing primarily to China and elsewhere in Asia, but not to the US,”
the minimum percentage of parts that must be made in the Gabriel Ehrlich, Director of UM’s Research Seminar in Quantitative
US, Canada or Mexico — from 62.5% to 85% — in order to Economics, said in a statement. “On the other hand, many
escape tariffs when imported to this country. And they want light truck assemblies probably would move to the US.”
to require that 50% of parts must come from the US. Lori Wallach, Director of Public Citizen’s Global Trade Watch,
Canada and Mexico has thus far rejected what they see as noted that Canada and Mexico have played a big role in
hardline proposals from the US, and they have pushed the shaping the revitalized TPP. She said they pushed to remove
time frame for resolving differences into 2018. stringent intellectual property rules that were favored by the
Alan Deardorff, professor of public policy and economics at US, which could foreshadow their stance on those in the
the University of Michigan, agreed that the likelihood of the ongoing NAFTA talks.

November 2017 48

NADA Musings

China Craves Electric Cars, While US Flirts With Ending Tax Credit

In the United States, politicians voted on November 16 for a And while the eventual ban on the traditional internal
proposal that included repeal of a $7,500 tax credit for buyers combustion engine is a longer-term goal, China is taking
of electric cars. In China, auto executives from around the interim steps to promote electric vehicles.
world were gathering to talk about ambitious plans to sell China issued strict regulations in September requiring
more of those vehicles here. automakers to sell large numbers of electric cars or plug-in
The politics in Washington have not explicitly pushed hybrids in 2019 if they want to keep selling gasoline-powered
carmakers to prioritize China. But the dueling approaches have cars. China then plans to phase out its generous electric car
added to a growing consensus among auto executives — even subsidies at the end of 2020, pushing automakers to figure
in the United States, where General Motors and Ford are out how to profit without them.
planning to build more electric vehicles — that China will lead But Heizmann said that even if China had not issued the
the world in the fast-growing sector. regulations, its stringent fuel economy targets for 2020 could
VW announced that it planned to introduce to the Chinese not be met without selling a lot of electric cars or halting the
market 25 models of electric cars between 2020 and 2025, in sale of all but the smallest gasoline-powered cars. The country
addition to the 15 electric models it already had planned to will require each carmaker that year to sell cars with an overall
bring to the country by 2020. The company and its joint average fuel economy of 47 miles per gallon.
venture partners will invest almost $12 billion in the effort, Republicans in the House of Representatives are pushing a
said Jochem Heizmann, Chief Executive, VW Group China. repeal of the electric car tax credit, which could equate to
Heizmann said that most of the electric car models in VW’s about $200 million in the coming years, according to
short-term product pipeline for China are based on existing Congress’s Joint Committee on Taxation, or about 0.005 per
designs for internal combustion engines. But a majority of the cent of the value of all of the tax cuts in the House bill. The
25 additional electric car models will be created from the Senate tax bill, which faces increasingly uncertain prospects,
ground up as electric cars, he said, an approach that allows does not call for repeal of the electric vehicle tax credit.
engineers to make very different design decisions to maximize If the House and Senate measures both pass, a House-Senate
energy efficiency and passenger comfort. committee would then decide whether to include a repeal of
Other foreign carmakers are also betting heavily on the electric the tax credit in the final legislation.
vehicle market in China. The Environmental Protection Agency began a review in
GM said on Monday that it was weighing when to start a August of fuel economy rules that is widely seen as preparation
broader rollout of its Baojun E100 electric car after selling more to loosen an Obama administration requirement that
than 4,000 in just one midsize city in southern China since automakers double vehicles’ average fuel economy to 54.5
July. Nissan is preparing to announce on Friday, at the opening miles a gallon by 2025.
of the Guangzhou auto show, that China will be one of the There are some differences between the American and
first markets in which it sells the new, battery-powered electric Chinese fuel economy tests that make them not strictly
Leaf with a big nationwide sales push. comparable, however: The Chinese tests tend to show a slightly
With China making plans to eventually ban conventional higher fuel economy for the same cars.
gasoline- and diesel-powered cars, “the pace is quicker in China Automakers are also moving the production of parts to China
than in other areas of the world,” Heizmann said. “The portion for electric cars. Reliant on very large batteries from South
of new energy vehicles will develop quicker in China.” Korea for its electric cars, GM is now moving to buy many of
The push toward electric vehicles in China has spurred creation its batteries from Chinese suppliers, said Matthew Tsien, the
of a slew of start-ups in many provinces here, and nearly all executive vice president who oversees GM’s extensive China
Chinese automakers are focused on marketing electric cars, operations. That helps the company qualify for Chinese electric
with plans to introduce dozens at the Guangzhou show. car subsidies that require considerable domestic content.

“If you look at Detroit in the early 20th century, there were “We do see China being, in the near and medium term at least,
250 carmakers, and that is pretty much what China has in by far the largest market for electric vehicles in the world,”
electric vehicles now,” said Tony Seba, the founder of Rethink Dan Ammann, GM’s President, said in an interview in New
X, an American energy and transportation consulting firm. York this week. “But we believe ultimately that the whole
“They are far ahead.” world will go that direction.”

49 November 2017