F A D A Journal - February 2018

Office Bearers contents

President PRESIDENT’s MESSAGE 7 A Big Thank You for Attending the Tenth Auto Summit!
INDUSTRY TRACK 8 Vehicle Sales Shows Cautious Upward Trend
JOHN K PAUL
Popular Vehicles & Services Pvt Ltd INDIAN ECONOMY 10 WPI Inflation Eases to 6-Month Low of 2.84% in January
Kuttukaran Centre, Mamangalam, Kochi
Tel: +91-484-234 1134 / 7872 / 5013 PERSPECTIVE 12 Auto Retail Adapts to Changing Consumer Habits
E-mail: [email protected]; COMPETITION LAW - Colorado Real Estate

[email protected] 14 Competition Law Updates - G R Bhatia

Vice President UNION BUDGET 2018 15 Infrastructure and Rural Spending To Boost Auto Sector
INSIGHT - ICRA
ASHISH KALE
Provincial Automobile Co. Ltd AUTO SUMMIT 2018 19 Rethinking Car Software and Electronics Architecture
Kingsway, Near Railway Station, Nagpur - McKinsey & Co.
Tel: +91 98226 96777
E-mail: [email protected]; 24 Post Event Report and Glimpses of Auto Summit 2018

[email protected] F A D A AWARDS 2018 30 F A D A Salutes the Awardees of F A D A Awards 2018

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 F A D A ACADEMY 33 Brochure of F A D A Academy Programme

Back Cover KNOW OUR MEMBER 37 Joshi Autozone Pvt Ltd, Chandigarh
Force Motors
60

Front Inside Cover AWARDS & RECOGNITION 38 J D Power Honours Highest-Ranked Performers in Customer
Tata Capital Financial Services Satisfaction at India Awards Event

2

Back Inside Cover 59 BUSINESS MANAGEMENT 40 Increase Auto Dealership Sales Performance
Tata Motors AUTO EXPO - Revolux Led Sulutions

Inside Pages SURVEYS & STUDIES 42 • Honda Opens Booking for X-Blade Motorcycle
CONSUMER CASE STUDIES • Toyota Showcases New Land Cruiser Prado
• Mahindra & Mahindra Financial Services 3 • Tata Shaping India’s Future with ‘Smart Mobility, Smart Cities’
• Mahindra Showcases ‘Future of Mobility’
• AMPL 4 • Ashok Leyland Unveils an Electric Bus - Circuit-S

• Popular Vehicles & Services 6 46 Young Two-Wheeler Owners Continue to Experience Higher
Instances of Initial Quality Problems, J D Power Finds
• Marikar Group 11
48 NCDRC : Sunil Dattatray Gaurav - Petitioner Versus
• Prime Honda 17 Manager, United India Insurance Co. Ltd & Ors - Respondents

• Treo Engineering Pvt Ltd 18

• Provincial Group 32

• Maurya Motors 41 50 Major developments affecting Automobile Industry in US

• Olympia Honda 45 NADA MUSINGS

• United Group of Institutions 54

• Satyam Centre of Professional Excellence 55 SALES REPORT 52 Vehicle Sales & Exports and Y-o-Y Growth - January 2018

• Bagga Link 58

For Advertisement query, please contact Printed and Published by G K Ahuja on be5half of FederationFoefbAruutaormyo2b0i1le8Dealers
Ankush Sethi at [email protected]
Associations, 805, Surya Kiran, 19, Kasturba Gandhi Marg, New Delhi-110001.
Printed at Sita Fine Arts P Ltd, A-22, Naraina Industrial Area, Phase-II, New Delhi-110028.
Editor: G K Ahuja



president’s message

A BIG THANK YOU FOR ATTENDING THE TENTH AUTO SUMMIT!

One Mega Event| Over 1000 Delegates| 50 Eminent Speakers| Unmatched Inspiration| Unparalleled Dialogue

Dear Dealer Colleagues,
I would like to thank you from the bottom of my heart in making the 10th Auto Summit a mega hit! During
this summit, we have broken all records as we witnessed 1000+ footfall during the entire day of the
summit. Post event, we have also received quite insightful feedbacks and suggestions which I am sure
will make the next summit, even grander!
The 10th Auto Summit on the theme ‘Control Our Destiny’ aptly discussed what the future holds in store
and how one can start preparing for it from today. The Summit witnessed engaging and lively discussion
right from the start of the day and till the very end. It was also very encouraging to see jam packed hall
right at 9 am on a cold Delhi morning! This shows how F A D A is making its presence felt among all of us!
I am grateful to all our esteemed guests and speakers and in particular to His Excellency Shri M
Venkaiah Naidu, Hon’ble Vice President of India who announced the Summit open! I am in high appreciation of Shri Nitin
Gadkari, Hon’ble Minister of Road Transport, Highways and Shipping who in spite of an urgent Parliamentary meeting being
called by the Hon’ble Prime Minister, was kind enough to send his video message for the audience and his views on the Auto
Retail Industry and Shri Suresh Prabhu, Hon’ble Minister of Commerce & Industry who came to launch F A D A Academy in
between the Parliament Session break and Shri Shashi Tharoor for his motivational talk! I should not forget in thanking Dr
Abhay Firodia, President, SIAM and Chairman, Force Motors and Shri Vikram Kirloskar, VC, Toyota Kirloskar Motor, who took
time off their busy schedule to be in our midst at the Summit.
I am also thankful to all our other guest speakers, namely: Shri Abhay Damle, Jt Secy - Transport, MoRTH; Shri Joydeep Shome,
NIC; Shri Pralay Mondal, YES Bank; Prof K Ramchandran, ISB; Ms Radha Kapoor Khanna, Indian School of Design & Innovation;
Shri Rajan Pental, YES Bank; Shri Hormazd Sorabji, Autocar India; Shri Arun Malhotra, Nissan Motor, Shri Mahesh Babu,
Mahindra Electric Mobility; Ms Shalu Jhunjhunwala, Google India; Shri Rakesh Batra, EY; Shri Sudarshan Sarma, Facebook;
Shri Prasanth Chandrasekharan, Akzo Nobel; Shri Nabeel A Khan, ET Auto; Shri Anuj Kathuria, Ashok Leyland; Shri B Srinivas,
VE Commercial Vehicles; Shri Bhaskar Karkera, AU Small Finance Bank; Shri Rajesh Kaul, Tata Motors; Shri Ronojoy Banerjee,
CNBC TV18; Shri Pankaj Dubey, Polaris India; Shri Ashok Bhasin, Hero MotoCorp; Shri Roy Kurian, India Yamaha Motor ; Shri
Vimal Sumbly, Triumph Motorcycles; Ms Swati Khandelwal, BTVi; Shri N Raja, Toyota Kirloskar Motor; Shri Jnaneswar Sen,
Honda Cars India; Shri Hardeep Brar, Nissan Motor; Shri Ashutosh Dixit, Skoda Auto India; Shri Veejay Ram Nakra, M&M
Auto; Ms Delna Avari; Dr Anil Lamba; and Shri Sachin Shelat, Reliance General Insurance.
We would have not been able to organise such a mega event without the handful handholding of our sponsors: AU Small
Finance Bank, Karnataka Bank, M&M, YES Bank, Ashok Leyland, Hero Motocorp, Mahindra Finance, Reliance General Insurance,
New India Assurance, VECV, AkzoNobel, Axalta Coating Systems, Bharat Benz, Cholamandalam Investment & Finance, Honda
Cars, Mahindra Insurance Brokers, Manitou Group, National Insurance, Renault India, Suzuki Motorcycles, Tata Motors,
Toyota Kirloskar, Autoji, Auto Ninja, Castrol, Gulf Oil, Royal Sundaram, Oriental Insurance, Shell India, Triumph and Yamaha.
I shall be failing in my duty if I miss out thanking the Organising Committee, which was spear headed by My Nikunj Sanghi,
Chairman, Auto Summit 2018 and Mr K V S Prakash Rao, Director, Auto Summit 2018 and also the other Office Bearers and
Council Members, State Chairpersons & Regional Directors in making the 10th Auto Summit a grand success.
I am also thankful to Autocar Professional which has partnered with us for F A D A Awards. This edition of the awards
aroused astonishing response from all the states, thanks to the efforts put in by our State Chairperson’s!
Last but not the least, it was heartening to see such a very massive response and keen interest shown by our fellow dealers,
who came for this event across the length and breadth of the country. My congratulations, thanks and gratitude to all of you
and other participants for making the Summit virtually an unadulterated memory for all of us!
With best wishes,
Yours sincerely

John K Paul

7 February 2018

INDUSTRY TRACK

Vehicle Sales Shows Cautious Upward Trend

2018 kick-started on a positive note for the Indian automotive Commenting on the monthly performance, Rajan Wadhera,
industry, with most of the vehicle segments marching ahead President, Automotive Sector, M&M, said, "We are happy to
with good growth. have begun the calendar year with an overall healthy growth
PASSENGER VEHICLE– POST MIXED SALES of 32%. We have seen a good growth across our portfolio of
Total passenger vehicle sales in domestic market at 285,477 products both personal & commercial. The growth in the
units in January 2018 grew by 7.57 per cent, up from 265,389 MHCV segment lends credence to the positive momentum in
units during the same month last year. the economy, which can be seen even in the growth numbers
Maruti Suzuki India (MSIL) clocked a 4.1% uptick in its domestic of our SCV portfolio. We believe this momentum will continue
passenger vehicle sales that stood at 139,189 units in January in our Q4FY2018 numbers..
2018, compared to 133,768 units a year earlier. The Continuing its turnaround, another home-grown player, Tata
company's exports grew by 3.0 per cent to 10,608 units from Motors sold 21,872 passenger vehicle, including cars, UVs and
10,295 units in the same month last year. vans in domestic market during January 2018, which marked
Sales of mini segment cars, including Alto and WagonR, a robust growth of 48.6%, vis-a-vis 14,721 units in January
witnessed a 12.2% down to 33,316 units during the month last year. Strong performance of Tiago, Tigor, Hexa and Nexon
under review from 37,928 units in January 2017. Even the drove the growth momentum for Tata Motors. The UV segment
sales of company's flagship mid-sized sedan Ciaz also fell recorded a growth of 188% over last year on the back of
by 22.5%, continuously in three months, to 5,062 units. strong demand of the newly launched Nexon and Hexa.
Meanwhile, the compact segment of MSIL featuring offerings Honda Cars India (HCIL) registered monthly domestic sales of
like Swift, Estilo, Ignis, Celerio Dzire and Baleno went on to 14,838 units (January 2017: 15,592 units) and exports of
post growth of 21.6% in January. Sales of company's utility 410 units (January 2017: 981 units) in January 2018, a
vehicles, including Gypsy, Grand Vitara, Ertiga, S-Cross and negative growth by 4.8% and 58.2%, respectively, compared
compact SUV Vitara Brezza increased by 26.8% to 20,693 to last year in the same month. The plus point for the Japanese
units in January, from 16,313 units vis-a-vis January 2017. carmaker is that it held on to the cumulative growth of 17 per
Hyundai Motor India Ltd (HMIL) sold 45,508 units in domestic cent selling 144,802 units during April 2017 to January 2018,
market during January 2018, up 8.3% (January 2017: 42,017 against 124,114 units last year in the same period.
units). The company’s exports at 10,708 units during the Toyota Kirloskar Motor (TKM) sold a total of 12,351 units in
month, increased by 9.1% y-o-y and cumulative sales of the Indian market in Jan’18, strong growth by 19.5% (January
56,216 units in January 2018 with a growth of 8.5% over 2017: 10,336 units). The company exported 963 units of Etios
January 2017. series in January, thus, clocking a total of 13,314 units.
Commenting on the sales performance, Rakesh Srivastava, Commenting on the sales performance, N Raja, Dy MD, TKM
Director - Sales & Mktg, HMIL, said “2018 has started on a said, “It is a delight to usher in the new year with a double
positive and promises progressive growth for the industry, digit growth. We are happy to have sustained the positive
with Hyundai volume growth of 8.3% on strong performance growth momentum post GST. The customer demand has
of Grand i10, Elite i20, Creta & Next Gen Verna meeting consistently been strong and we have catered to the growing
customer aspirations on improved buying potential, led by customer demand. The success story of Innova Crysta and
stable micro economic factors.” Fortuner sales growth continues to the new year.”
UV major, Mahindra & Mahindra witnessed an uptick of 17.7% Ford India achieved a total sales growth of 58 per cent to
in passenger vehicles segment (which includes UVs, Cars and 22,535 vehicles, against the 14,259 vehicles sold during the
Vans) domestic sales of 23,656 vehicles, against 20,093 same month last year. The US carmaker's domestic wholesales
vehicles a year ago. However, the total domestic sales of stood at 9,450 vehicles in January, up from 7,995 vehicles in
company stood at 49,402 vehicles during January 2018, as the same month last year, registering an 18.2 per cent growth.
against 37,039 vehicles during January 2017, registering a Exports on the other hand, in the month of January 2018 grew
growth of 33.4%. In the M&HCV segment, M&M sold 1,168 to 13,085 vehicles, as against 6,264 vehicles exported in
vehicles for the month, registering an impressive growth of January 2017, registering a massive growth of 109.0 per cent.
66.6%, in second straight month. Total exports for M&M in French carmaker, Renault India is on the path of rough road
January 2018 stood at 2,616 vehicles, a growth of 15.7%. after a spectacular show and registering a negative

February 2018 8

INDUSTRY TRACK

percentage rate of 21.3% y-o-y to 6,919 units (January 2017: The Pune-based bike maker, Bajaj Auto notched up 36.4%
8,791 units) in its domestic sales in January 2018. increase, selling 288,936 units in January 2018 in which
TWO-WHEELER SALES ACCELERATES IN JANUARY 2018 Exports figured at 125,825 units during the month, as against
The Indian two-wheeler industry recorded impressive YoY 211,824 units in the month of January 2017.
growth of 33.43 per cent in January 2018 to 1,684,066 units Ditto, popular motorcycle manufacturer, Royal Enfield clocked
as against 1,262,140 units a year ago. Scooters recorded the 31.1% uptick in its domestic sales that added up to 76,205
fastest growth of more than 48 per cent YoY, motorcycle sales units in January this year (January 2017: 58,133 units).
grew by 28.64 per cent YoY. Meanwhile, in mopeds wherein Domestic sales of India Yamaha Motor at 57,553 units in
TVS Motor commands a monopoly in the domestic market, January 2018 were in north-pole vis-a-vis 34,117 units, a
saw YoY growth of 10 per cent. year ago.
Fortifying its dominant market leadership at the onset of the Suzuki Motorcycle India Pvt Ltd (SMIPL) reported a 30% rise
New Year, Hero MotoCorp Ltd, reported yet another month of in its total sales at 49,762 units in January as against 38,289
six-lakh plus sales. The company sold 641,501 units of two- units in the same month last year.
wheelers in January 2018, as against 487,088 units in the STRONG GROWTH IN JANUARY DEMONSTRATE CV SALES
corresponding month of the previous year (January 2017), PERFORMANCE
thus, registering a strong sales growth of over 31%. Commercial vehicle sales remain positive in the first month
Ashok Bhasin, Head of Sales, Marketing & Customer Care, of the calendar year 2018, all OEMs continue to report positive
Hero MotoCorp, said “Our robust double digit growth in growth. However, there is an indication of growth moderating
overall two-wheeler sales has been driven by very strong this month. As economic activities start improving on the
growth in both Scooters and Motorcycles. Our cumulative back of a strong focus on infrastructure development, along
volume for the Financial Year 2018 (Apr’17-Jan’18) has with logistics sector witnessing a growth opportunity from
already crossed the six million sales milestone. We are the demand of the construction sector, leading to CV segment
confident of maintaining our strong growth trajectory and witness a sustain growth over the last 3-4 months. Industry
setting a new industry benchmark in sales for the full year.” analysts anticipate the Q4 FY 2017-18 likely to be positive
Growing faster than industry, Honda Motorcycle and Scooter for the CV sector.
India (HMSI) posted a surge of 33.0% in the domestic market, Tata Motors’ commercial vehicles sales in domestic market
with total sales of 517,778 units (including exports) in January in January 2018 were at 37,569 units, a growth of 40.7%
2018, as against 389,313 units in same month last year. compared to 26,707 units in January 2017.
Scooter sales in the same month grew by a whopping 39.6 Likewise, Ashok Leyland posted a pitch of 21.7% in January
per cent from 228,811 units in January 2017 to 319,318 units 2018 with total sales of 18,100 vehicles, as against the sales
in January 2018. Motorcycle sales in the same month grew of 14,872 vehicles in the same month last year.
by 21.8 per cent from 139,161 units in January 2017 to Commercial vehicle sales of Mahindra & Mahindra (M&M) in
169,537 units in January 2018. the Indian market aggregated a strong performance of 21,002
"FY2017-18 is already shaping up as a historic year for Honda. units in January 2018 – up 51.2% y-o-y.
In just 10 months of this fiscal, Honda has added over 9 lakh V E Commercial Vehicles sold 6,099 units in January 2018 in
new customers and crossed 5 million sales mark in the Indian market as compared to 3,862 units in January 2017,
shortest time. The Government announcements in Budget recording a growth of 57.9%. This includes 6,010 units of
2018 too should accelerate rural demand. With firm thrust Eicher brand and 89 units of Volvo brand.
on rural economy is evident from increasing Kharif crop MSP The industry could be seen to be going strong with the
to 1.5 times the production cost. The infrastructure focus of continued momentum from the second half of CY2017,
the government is very strong on rural areas and highways. with factors such as implementation of the GST pushing
With almost 50% of two-wheeler demand coming from rural market demand. With a host of new unveils and launches
and semi-urban India, Budget 2018 should have a positive at the 2018 Auto Expo, the Indian automotive sales is set
impact on customer sentiments," said Y S Guleria, Sr VP - to witness even more exciting performance in the days to
Sales and Mktg, HMSI. come, with most vehicle manufacturers looking to tap into
TVS Motor registered massive growth of 30.1% with sales the overall positive sentiment in the market
(including exports) increasing from 202,209 units in January
2017 to 262,995 units in January 2018.

9 February 2018

India economics

WPI Inflation Eases to 6-Month
Low of 2.84% in January

WPI inflation declined in January 2018, the second
successive month. The year-on-year growth in the WPI for
January 2018 came in at 2.8%, lower than the growth of
3.6% (prov.) recorded in December 2017 and the growth
of 4.3% in January 2017. This is the lowest level of inflation
in wholesale prices since September 2017.
The moderation in WPI in Jan’18 can be attributed to the
fairly broad-based decline across the major groups.
Compared with Nov’17 when WPI inflation touched 8-
month high, the price growth in food articles has declined
to 3% YoY from 6%. Likewise, for fuels, it has declined to
8.8% from 4.1%. In case of manufactured products, the
price increase at 2.8% is marginally higher than the 2.6%
growth recorded in Nov’17.
The build- up in WPI inflation for the fiscal year so far
(Apr-Jan) at 2.3% is lower than the 4.6% inflation in the
corresponding period last year.

Source: Office of the Economic Advisor, GOI and F A D A Research eased to 2.8% in Jan’18 compared with 3.3% in Jan’17.
Some of the major sectors that witnessed an easing of
Key Highlights inflation were Manufacture of Food Products (-1.0%),
• Food Articles registered a price growth (y-o-y) of 3.0% Textiles (1.4%), Vegetable and Animal Oils and Fats
(1.3%) and Transport Equipment (1.2%) over year ago
in Jan’18, significantly higher than year ago levels of levels.
0.3%. • Manufacture of Leather and Related Products recorded
• The uptick in prices of vegetables (40.8%), Onions a contraction in price levels for the 13th month in a
(194%) and Fruits (8.5%) drove the rise in food prices. row and was recorded at (-) 0.1%.
The decline in price growth of Pulses (-30.4%) and • The downside was limited by a rise in Chemical and
wheat (-6.9%) limited the rise in food inflation. Chemical Products (2.8%), Paper and Paper Products
• Fuel & Power inflation eased considerably during the (6%), Basic Metals (13%) and Other Non-Metallic
month to 4.0% (from 16.7% in Jan’17) driven by Mineral Products (4.7%).
moderation in price increase of Petrol to 1.3% from Lackluster non-oil exports widen trade deficit. Higher
29.1% a year ago and HSD to 7.1% (from 46.1%). commodity prices and improving domestic demand to keep
• Inflation in the Manufactured Products category the trade deficit elevated.
Export growth moderated to 9.1% YoY in January from 12.5%
in December indicating some loss of momentum for the
second straight month, owing to lackluster non-oil exports
(4.8% versus 10.8%). Sector wise, exports in the labor-
intensive sectors (textiles, carpets and handicrafts)
reported very weak growth, as did the electronic goods
and agriculture goods segments, while exports of
chemicals and engineering goods remained strong.
Weakness in labor-intensive exports may possibly reflect

February 2018 10

India economics

the continued cash crunch after the GST (due to delayed
tax refunds). Geographically, the export growth
moderation in December was broad-based, but overall
2017 exports saw a healthy pick- up across all major
markets, especially China and Japan.
Import growth rose to 26.1% YoY from 21% in December.
Oil imports growth rose 42.6% YoY in January because of
elevated oil prices, while gold imports contracted (-22.1%
YoY) to USD1.6bn from USD3.4bn in December, as
expectations of a lower custom duty in the impending
budget (which didn’t materialize) led to demand being
postponed. Core import growth (imports ex-oil, gold)
accelerated to 24.4% YoY from 12.8% in December. The
strength was driven mainly by higher commodity imports
(ores, coal, oil, fertilizer, metals) followed by capital goods
(machinery, machine tools).
Overall, the trade data suggest that the global recovery’s
benefits to exports are partly being undone by the ongoing
cash crunch that is hurting labour-intensive exports, even
as higher commodity prices and improving domestic
demand are significantly widening the trade deficit.

11 February 2018

PERSPECTIVE

Auto Retail Adapts to Changing Colorado Real Estate
Consumer Habits

Automobile retailers are facing many of the same challenges can support a lot of surface parking as well as a single-story
other retail industries are struggling to overcome. While new or a two-story building, said Mike Hockett, WE O’Neil
car dealerships and used car dealerships face different Construction Co. Vice President of Business Development.
constraints in some regards, both are being pressed to Dealerships tend to cluster near one another, offering
address a supply-and-demand land imbalance, changing consumers an easy route to stop by several dealerships in
consumer habits and municipality hiccups. The way forward one trip. Many of these clusters are located outside of metro
for used car dealerships looks more nimble in the face of areas in unincorporated counties, such as unincorporated
growing land costs and an active online market, while new Weld, Adams and Arapahoe counties. The reason for this lies
car dealerships are placing a larger emphasis on the retail in tax revenue and challenges with municipalities, said
experience to retain and attract new customers. Jackson.
“Real estate has become one of the bigger challenges and, in “It’s been a problem for a while, and it’s getting to be a bigger
some cases, the top challenge, dealers have in opening a new problem,” Jackson said. “A lot of that has to do with zoning
store, getting an additional franchise or moving a store to laws, where local communities want to get other types of
grow with volume,” said Tim Jackson, Colorado Automobile retail instead of automotive retail.”
Dealers Association President. The lack of available land Some communities chase big-box stores, such as supercenters
has been an issue for the past 20 years, but it’s a much more and grocers, because the city stands to reap the benefits of
pronounced problem today, he said. the sales tax revenue, he said. For auto dealerships, it’s
The demand for automobile real estate is more brisk than different. The tax revenue collected from auto sales is
ever, said James Mitchell, Vice President of CBRE’s automobile distributed back to where the vehicle owner resides or, if it’s
properties group. This demand is largely driven by the active a business, where the company headquarters is located.
automotive industry, which is climbing to a maturity point Fort Collins is an example of a city that is chasing other
well beyond the trough of 2008, and dealers are quickly retail because the city recognizes that even if it doesn’t have
finding that they need to expand current facilities to keep up, any dealerships, as long as its residents buy the cars, the
he said. city will still get the tax revenue. “So it creates an incentive to
The ideal location for a dealership is paramount. “You want chase a Walgreens or a Target, but not as lucrative to chase
to be visible, you want to be accessible and, depending on a dealership,” Jackson said.
your brand, you want to be surrounded by other brands that Due to these all-too-common municipality headwinds, the
are the caliber that you’re trying to promote,” said Mitchell. price of automotive real estate that’s favorably zoned goes
“So if you’re a Mercedes-Benz dealership, you don’t want to up, Mitchell said. “The demand for automotive real estate is
be surrounded by a bunch of pawn shops. You want to be probably the highest I’ve seen since 2008,” he said. “And that
surrounded by other high-end brands.” demand is accentuated by a lack of supply.”
Most owners are looking for acreage in new properties that

February 2018 12

PERSPECTIVE

In the past five or six years, auto retail sales increased used car dealerships, and piloted a unique used car concept,
dramatically. Today, the auto retail market is steady, but EchoPark Automotive, in Denver this past year.
flattening, Jackson said. However, there are a lot more buyers Used car dealerships are diametrically different because the
for new cars than there are sellers. “The number I hear is – owner controls the brand, as opposed to having mandates
for every seller in the marketplace, there’s 30 buyers.” handed down from a given manufacturer, said Mitchell. While
New versus Used Car Facilities having more control over the dealership’s real estate needs,
In Colorado, there are at least five new car dealerships with these owners are finding more flexibility to address changing
shovels in the ground as well as a couple of yet-to-be- consumer habits.
announced plans underway, Jackson said. These dealerships “The list is a mile long on what consumers dislike,” said
will join the almost 300 new car dealerships throughout the Dyke. “First of all, they don’t like the pressure when they go
state. Additionally, over the last five to seven years, there up to a dealership. They don’t trust the dealership. They know
was a wave of remodeling to existing sites, mainly at the the salesman is paid a commission to sell them something
behest of automakers, he said. today. They’re not 100 percent certain about the product
“I think there’s a lot of pressure in the industry from dealership they’re going to get. They are very concerned about the trade-
manufacturers pressing their dealers to upgrade their in process and the amount of money they end up getting for
facilities to meet certain branding and sustainability their trade in.”
concepts,” said Hockett. “Present day is probably as busy as Consumers also dislike how long it takes to buy a car, having
we’ve ever seen it. Manufacturers kind of hold inventory over to haggle and having to deal with multiple staff members.
the dealer’s head – ‘If you don’t comply with what we’re asking, “It’s all just horrific,” Dyke said of the process. “The industry
you don’t get first crack at some of the inventory,’ which is is running as quickly as it can away from it.”
very important to the dealerships.” In addition to trying to offer solutions for each of these
In the face of changing consumer needs, offering an complaints, EchoPark offers customers perks, such as use of
experience when purchasing a vehicle is a top priority for car washes for free at every location. EchoPark takes its cues
new car dealerships. Luxury brands are pouring more money from specialty retail and hospitality sectors and is trying to
into the showrooms to embrace the lux feel. Two new build customer loyalty. In addition to sponsoring a local
dealerships on Colorado Boulevard, selling Mercedes-Benz high school football stadium, the dealership offers defensive
and BMW brands, are generating a lot of hype and, thanks to driving classes and is trying to get accredited to offer
a backing from Sonic Automotive, a national, publicly traded educational driving school courses.
company, can afford to invest a little more money than normal. As more buyers migrate online to buy used cars, the demand
“There’s a lot of curiosity around how well that’s going to for space most likely will change. “I do believe, sooner than
work, and once they open, will the increase in car sales based later, you’re going to see the digital real estate world play as
on what they’ve done really pay off,” Hockett said. large or bigger a role than the physical real estate world,”
The money is intended to enhance the customer experience. Dyke said.
New technologies speed up the buying process while new The cars still will need to be housed somewhere, but cheaper
“delivery rooms” are designed as congratulatory areas for properties in not as high-traffic location will work because
finalizing a vehicle purchase. And once the car is purchased, the vehicles would be delivered straight to the consumer at
dealership are investing a lot in their service departments to the individual’s home or place of business.
retain those costumers over the lifetime of the vehicle. “I do see that happening,” he said. “I think the OEM will stand
From a new car perspective, don’t expect manufacturers to in the way of that happening on the new car side for much
relax their thought process on how big and how glorious longer than what the preowned side will be able to accomplish.”
they want their facilities to be any time soon, said Jeff Dyke, The digital marketplace will become a major pillar of the
Sonic Automotive executive vice president. “So real estate is transaction process, said Mitchell. “But bricks and mortar
going to play a big, big role in that just due to the expense won’t go away, especially for your really niche concepts, like
and the location of the properties.” an EchoPark, where the delivery of the car and, quite frankly,
The used car business is three times the size of the new car the purchase of the car is really experience based,” he said.
business. There are 45 million or 46 million used cars sold “It’s not just about the car itself, but it’s about the people that
in the US each year, compared with 15 million to 17 million you’re interacting with and the environment in which the
new cars sold, Dyke said. Sonic Automotive owns new and transaction is occurring.”

13 February 2018

Competition Law Updates

Canadian Competition Bureau (CCB) has imposed fine on car The COMPAT by its order dated 09.12.2016 concurred with
parts manufacturer Mitsubishi Electric the findings of the CCI and directed Ford, Toyota and Nissan,
to remove all restrictions imposed through agreements on
The CCB has imposed a auto parts suppliers so as to open up market for spare
USD10m fine on car parts parts, remove all restrictions on supply of spare parts by
manufacturer Mitsubishi original equipment suppliers to authorized dealers etc.
Electric for participating in On appeal, Hon’ble Supreme Court has stayed the operation
an international bid- of the COMPAT’s order and the matter will be taken up for
rigging conspiracy with a arguments on 22 February 2018.
Japanese car manufacturer. Nine Japanese auto-part manufacturers file writ petitions
before the Delhi High Court
Continuing its focus on Nine Japanese auto-part Companies (NOK Corporation,
fairness in government Sumitomo, Motherson Sumitomo Wiring Systems, Toyo
contracting and combating Denso, etc.) challenged the order of investigation passed
bid-rigging, the Government by the CCI u/s 26(1) of the Competition Act, 2002 (Act) and
of Canada launched a the notices sent by the Director General, CCI (DG)
hotline to enable the requisitioning information pursuant to the order of
anonymous reporting of investigation. The broad contention of the petitioners is
G R Bhatia, Partner & Head, federal contracting fraud. that (a) they have not been informed whether they are
Competition Law Practice Group, Those who witness or charged parties or third parties; (b) by rejecting their
suspect unethical business inspection applications, the CCI is violating the principles
Luthra & Luthra Law Office of natural justice by not allowing the petitioners to have
access to case material in order to effectively respond to
practices relating to government contracting are able to the DG’s notices. The matters will now come up for
call a dedicated telephone line or submit an online form. consideration on 21 February 2018.
Separately, Canada also hosted the 14th annual European Union imposed second highest ever fine over
International Competition Network Cartel Workshop with Swedish Truckmaker
the theme: Combating Cartels in Public Procurement. The European Commission has levied its second-ever-
largest fine (EUR880m) on Swedish truckmaker Scania for
Brazilian anti-trust agency starts more investigations against collusion over 14 years with five other truck OEMs on truck
Brazilian car parts makers pricing and passing on to customers the costs for emissions
technologies.
Brazil’s Antitrust agency, CADE, has commenced The five other manufacturers settled the dispute with EC but
investigations against several Brazilian companies. It Scania dispute was not settled subject to involvement in
believes that these companies may have colluded on pricing the cartel which led to the standard cartel procedure.
policies for aftermarket sales of various car parts between Scania’s fine brings the total sanctions against the truck
2004 and May 2012. manufacturers to over EUR3.8bn, with extensive damages
claims likely to add significantly to the overall liability.
The enforcer also alleged that during sales to automakers, Brussels and Bonn investigated Germany’s top five auto
the companies may have divided up customers, agreed prices companies
and commercial conditions and exchanged sensitive Competition Commission has investigated top five German
information. Companies (BMW, Volkswagen, Daimler, Audi, Porsche) for
cartel and anti- trust violation. It has found Volkswagen
According to CADE, the alleged collusion may have affected and Daimler liable for the offence. Daimler has already
as many as eight separate distribution chains within the picked up a record €1 billion cartel fine for colluding with
national car parts market: pistons, bearings, liners, rival truck makers. Volkswagen has requested for anonymity
connecting rods, door rings, sealing rings and gaskets, and as the firm is seeking for the probe in the case
engine piston rings.

It is believed, CADE has opened 14 investigations of alleged
conspiracies affecting multiple auto parts since 2014. It
has also conducted raids in four other markets that have
not yet resulted in formal investigations in the automotive
lighting, emergency switches, access mechanisms, and
automotive clutches sectors.

Supreme Court stays COMPAT order that imposed penalty
on 3 car companies

February 2018 14

Union Budget 2018-19

Infrastructure and Rural Spending To Boost Auto Sector: ICRA

In its Budget Estimates (BE) for FY2018, the GoI had pegged The GoI has decided to drop targeting the revenue deficit in
its fiscal deficit at Rs. 5.5 lakh crore (3.2% of GDP; based on the proposed FRBM Architecture, and focus on the fiscal
the assumption that the nominal GDP for FY2018 would be deficit as the operational target. Additionally, the Government
Rs. 168.5 lakh crore). The Revised Estimates (RE) for FY2018 is targeting to reduce its total debt to 40% of GDP by FY2025,
have indicated that the fiscal deficit would be higher than from 50.1% of GDP in FY2018 RE.
the BE by Rs. 48,317.0 crore, while the nominal GDP for
FY2018 has also been revised down to some extent to Rs. Sectoral Analysis
167.8 lakh crore. As a result, the fiscal deficit has increased
to 3.5% of GDP in the RE for FY2018, higher than the budgeted AUTO COMPONENTS
target of 3.2%. Moreover, the fiscal deficitto-GDP ratio Proposals
remains unchanged in FY2018 RE from the level in FY2017.
The BE for FY2019 indicates an increase in the fiscal deficit • Customs duty on specific imported auto components
in absolute terms, to Rs. 6.2 lakh crore. However, as a percentage hiked from 7.5%/10% to 15%
of GDP, the fiscal deficit is estimated to correct to 3.3% in the
BE for FY2019 (assuming nominal GDP of Rs. 187.2 lakh crore • Customs duty on truck & bus radial tyre increased to
in FY2019) from 3.5% in the RE for FY2018. Accordingly, Union 15% from 10%
Budget for FY2019 indicates a slippage of 30 bps each relative
to the previously announced targets of 3.2% of GDP and 3.0% • Increased outlay for rural infrastructure and proposed
of GDP, respectively, for FY2018 and FY2019. Fiscal hike in minimum support prices for crops benefit rural
consolidation is set to resume at the earlier pace of 20 bps in income; positive for 2W and tractor segment
FY2019, following the pause in the current year.
• Reduction in income tax rate for the MSME sector with
annual turnover below Rs. 250 crore to Rs 25% is positive
for MSMEs; will boost investment.

Union Budget 2018-19

Impact: POSITIVE However, in the absence of any clarity on implementation of
The hike in customs duty on select auto components namely vehicle fleet modernisation programme (for older vehicles)
spark-ignition and compression-ignition internal combustion and announcement of incentives to promote usage of electric
engines, and its sub-components (crankshafts, pistons, vehicles in public transportation, the announcements made
piston rings, sparkling plugs, fuel nozzles, among others) in Budget 2018-19 would overall be neutral for the sector.
and several other auto-components like bumpers, safety seat
belts and air bags, mounted brake linings, radiators, shock The increase in custom duty on CBUs to 25% from 20% is
absorbers, drive and non-drive axles, radiators and wheels; unlikely to have a material impact on the CV sector as only a
including several components used in two-wheelers is a miniscule proportion of vehicles are imported in CBU format
strong positive for domestic auto component manufacturers as most foreign OEMs either have complete manufacturing
and will promote the Made-in-India brand. or assembly operations in India.
The proposed hike in customs duty on imported truck & bus
radial tyres, coupled with the recently announced PASSENGER VEHICLES
antidumping duty, will improve competitiveness of the Indian Proposals
tyre manufacturers, against Chinese imports.
The Government’s increased outlay for the rural and agrarian • Increased outlay for rural infrastructure and proposed
segment would lead to higher disposable incomes and hike in minimum support prices for crops benefit rural
demand for the automotive sector especially in 2W, PV and income; rural segment accounts for about 30% of the
tractor; these together account for 70% of domestic OE overall domestic PV sales.
demand for components.
Considering the prevalence of MSMEs in auto component value Impact: NEUTRAL
chain (tier II and III suppliers), the reduction in corporate tax
rates (for companies with turnover <Rs. 250 crore) is a positive. The Government has increased the outlay for the rural sector,
with special thrust in doubling rural income over the next
COMMERCIAL VEHICLES five years and improving road connectivity. These are
Proposals positives for the passenger vehicle industry, especially entry
level cars and the utility vehicle segment. The Government
• Allocation for infrastructure increased to Rs. 5.97 lakh has also hiked the import duty on auto components from
crores for FY2019, up by 21% 7.5%/10% to15% to boost “Make in India” initiative.

• Higher allocation for road sector (including Bharatmala In the absence of any direct benefits such as scrappage
project – estimated to be 5.35 lakh crore) scheme for older vehicles or greater incentives to promote
usage of electric/hybrid vehicles, the announcements made
• Greater focus on strengthening rural economy through in Budget 2018-19 would overall be neutral for the sector.
multi-faceted schemes
TRACTORS
• Increase in custom duty on completely built trucks &
buses to 25% from 20%. Proposals

Impact: NEUTRAL • Total allocation for rural, agri and allied sectors
In line with expectations, the budget for FY2018-19 didn’t enhanced by 20.5% to Rs 14.34 lakh crore
provide any direct benefits on the indirect tax front to the
automobile sector. Accordingly, the Commercial Vehicle (CV) • Institutional farm credit target increased by 10% to Rs.
sector will continue to reap benefits of the Government’s plans 11 lakh crore
to significantly increase allocation towards the rural
economy and the infrastructure sector, especially • Increase in minimum support prices for kharif 2018-19
development of roads and highways including the Bharatmala and corpus allocated to strengthen agricultural markets
project and those in the rural areas. These investments will
not only support sales of vehicles used for providing last • Allocation under MNREGA increased by 14.6% to Rs.
mile connectivity but will also be positive for tipper sales 55,000 crore; allocation of Rs. 5,750 crore to the National
that constitute approximately 25-30% of M&HCV Truck sales Rural Livelihood Mission.
in India and have registered healthy growth (~25-30%) during
the 12-15 months. • Increase in allocation for Pradhan Mantri Fasal Bimal
Yojana by 44% to Rs. 13,000 crore

• Rural infrastructure development; allocation of Rs.
19,000 crore for Pradhan Mantri Gram Sadak Yojana
and Rs. 33,000 crore to Pradhan Mantri Awas Yojana

• Allocations of i) Rs. 1,400 crore for establishment of
specialised agro-processing institutions ii) Rs 500 crore

February 2018 16

Union Budget 2018-19

under ‘Operation Green’ to promote farmer produce Awas Yojana, (ii) Rs. 19,000 crore allocated towards
organisations, agri-logistics and processing facilities Pradhan Mantri Gram Sadak Yojana
• Export of agri-commodities to be liberalised. • Increase in allocation for Pradhan Mantri Fasal Bimal
Impact: POSITIVE Yojana to Rs. 13,000 crore
The Government’s thrust of promoting rural development and • Increase in minimum support prices for kharif 2018-19
farmer welfare in the budget remains a positive for the farm and corpus allocated to strengthen agricultural markets
sector. The Government remains committed towards • Increase in allocation under the MNREGA by 14.6% to
improving farm credit availability through increased Rs. 55,000 crore.
institutional agri-credit targets; additionally, continued
healthy allocation to schemes aimed at enhancing irrigation Impact: MARGINALLY POSITIVE
penetration and increasing the coverage of crop insurance The budget focussed on enhancing farm incomes by improving
schemes would help reduce the dependence of the crop realisations following a policy of linking minimum
agricultural sector on monsoon rainfall and improve crop support prices for kharif crops with the margin of minimum
yields and consequently farm incomes. 50% over the cost of production, budgetary allocations for
strengthening of Agricultural Produce Market Committees
TWO-WHEELERS (APMC) and Gramin Agricultural Markets for better price
Proposals discovery. Additionally, enhanced allocations for various rural-
focused employment and infrastructure development schemes
• Continued focus on agriculture and rural sectors as well as higher agricultural institutional credit targets also
• Total allocation for rural, agri and allied sectors indicates farmer welfare being a priority for the Government.
Given that demand for entry level motorcycles, has strong
enhanced by 20.5% to Rs. 14.34 lakh crore dependence on rural markets, such initiatives that allow
• Continued focus on rural infrastructure development expansion of farm income as well as provide higher access to
credit for agricultural use augur well for the sector
through (i) Rs. 33,000 crore allocated to Pradhan Mantri

17 February 2018



insight

Rethinking Car Software and McKinsey & Co.
Electronics Architecture

As the car continues its transition from a hardware-driven today for a D-segment, or large, car (approximately $1,220),
machine to a software-driven electronics device, the auto and the average share of software is expected to grow at a
industry’s competitive rules are being rewritten. compound annual rate of 11 percent, to reach 30 percent of
The engine was the technology and engineering core of the overall vehicle content (around $5,200) in 2030. Not
20th century automobile. Today, software, large computing surprisingly, players across the digital automotive value
power, and advanced sensors increasingly step into that role; chain are attempting to capitalize on innovations enabled
they enable most modern innovations, from efficiency to through software and electronics. Software companies and
connectivity to autonomous driving to electrification and other digital-technology players are leaving their current tier-
new mobility solutions. two and tier-three positions to engage automakers as tier-
However, as the importance of electronics and software has one suppliers. They’re expanding their participation in the
grown, so has complexity. Take the exploding number of automotive technology “stack” by moving beyond features
Software Lines of Code (SLOC) contained in modern cars as and apps into operating systems. At the same time, traditional
an example. In 2010, some vehicles had about ten million tier-one electronic system players are boldly entering the
SLOC; by 2016, this expanded by a factor of 15, to roughly tech giants’ original feature-and-app turf, and premium
150 million lines. Snowballing complexity is causing automakers are moving into areas further down the stack
significant software-related quality issues, as evidenced by such as operating systems, hardware abstractions, and signal
millions of recent vehicle recalls. processing in order to protect the essence of their technical
With cars positioned to offer increasing levels distinction and differentiation.
of autonomy, automotive players see the quality
and security of vehicle software and
electronics as key requirements to guarantee
safety. And this is requiring the industry to
rethink today’s approaches to vehicle software
and electrical and electronic architecture.

Addressing an urgent industry
concern

As the automotive industry is transitioning
from hardware- to software-defined vehicles,
the average software and electronics content
per vehicle is rapidly increasing. Software
represents 10 percent of overall vehicle content

19 February 2018

insight

One consequence of these strategic moves is that the vehicle functionalities (the current “add a feature, add a box” model),
architecture will become a service-oriented architecture the industry will move to a consolidated vehicle ECU
(SOA) based on generalized computing platforms. Developers architecture.
will add new connectivity solutions, applications, artificial- In the first step, most functionality will be centered on
intelligence elements, advanced analytics, and operating consolidated domain controllers for the main vehicle
systems. The differentiation will not be in the traditional domains that will partially replace functionality currently
vehicle hardware anymore but in the user-interface and running in distributed ECUs. These developments are already
experience elements powered by software and advanced under way and will hit the market in two to three years' time.
electronics. This consolidation is especially likely for stacks related to
Future cars will shift to a platform of new brand differentiators. ADAS and HAD functionality, while more basic vehicle
These will likely include infotainment innovations, functions might keep a higher degree of decentralization.
autonomous-driving capabilities, and intelligent safety In the evolution toward autonomous driving, virtualization
features based on “fail-operational” behaviors (for example, of software functionality and abstraction from hardware will
a system capable of completing its key function even if part become even more imperative. This new approach could
of it fails). Software will move further down the digital stack materialize in several forms. One scenario is a consolidation
to integrate with hardware in the form of smart sensors. of hardware into stacks serving different requirements on
Stacks will become horizontally integrated and gain new latency and reliability, such as a high-performance stack
layers that transition the architecture into an SOA.
supporting HAD and ADAS functionality
Exploring ten hypotheses on future electrical or and a separate, time-driven, low-latency
electronic architecture stack for basic safety features. In
another scenario, the ECU is replaced
The path forward for both the technology and the business with one redundant “supercomputer,”
model is far from fixed. But based on our extensive research while in a third, the control-unit concept
and insights from experts, we developed ten hypotheses is abandoned altogether in favor of a
regarding tomorrow’s automotive electrical or electronic smart-node computing network.
architecture and its implications for the industry. The change is driven primarily by three
There will be an increasing consolidation of electronic control factors: costs, new market entrants, and
units (ECUs) demand through HAD. Decreasing costs,
Instead of a multitude of specific ECUs for specific both for the development of features as
well as the required computing hardware,
including communication hardware, will
accelerate the consolidation. So too will
new market entrants into automotive that
will likely disrupt the industry through a
software-oriented approach to vehicle
architecture. Increasing demand for HAD
features and redundancy will also require
a higher degree of consolidation of ECUs.
The industry will limit the number of stacks used with specific
hardware
Accompanying the consolidation will be a normalization of
limited stacks that will enable a separation of vehicle
functions and ECU hardware that includes increased
virtualization. Hardware and embedded firmware will depend
on key nonvehicle functional requirements instead of being
allocated part of a vehicle functional domain. To allow for
separation and a service-oriented architecture, the following
four stacks could become the basis for upcoming generations
of cars in five to ten years:

February 2018 20

insight

Time-driven stack. In this domain, the controller is directly highly automated driving. While high-level functions such
connected to a sensor or actuator while the systems have to as sensor fusion and 3-D positioning will run on centralized
support hard real-time requirements and low latency times; computing platforms, preprocessing, filtering, and fast
resource scheduling is time based. This stack includes reaction cycles will most likely reside in the edge or be done
systems that reach the highest Automotive Safety Integrity directly in the sensor. To ensure correct sensor operation in
Level classes, such as the classical Automotive Open System all conditions, a new class of sensor-cleaning applications—
Architecture (AUTOSAR) domain. such as deicing capabilities and those for dust or mud
Event- and time-driven stack. This hybrid stack combines high- removal—will be required.
performance safety applications, for example, by supporting Full power and data-network redundancy will be necessary
ADAS and HAD capability. Applications and peripherals are Safety-critical and other key applications that require high
separated by the operating system, while applications are reliability will utilize fully redundant circles for everything
scheduled on a time base. Inside an application, scheduling that is vital to safe maneuvering, such as data transmission
of resources can be based on time or priority. and power supply. The introduction of electric-vehicle
Event-driven stack. This stack centers on the infotainment technologies, central computers, and power-hungry
system, which is not safety critical. The applications are distributed computing networks will require new redundant
clearly separated from the peripherals, and resources are power-management networks. Fail-operational systems to
scheduled using best-effort or event-based scheduling. The support steer-by-wire and other HAD functions will require
stack contains visible and highly used functions that allow redundancy system designs, which is a significant architectural
the user to interact with the vehicle, such as Android, improvement on today’s fail-safe monitoring implementations.
Automotive Grade Linux, GENIVI, and QNX. The ‘automotive Ethernet’ will rise and become the backbone
Cloud-based (off-board) stack. The final stack covers and of the car
coordinates access to car data and functions from outside Increased data rates and redundancy requirements for HAD,
the car. The stack is responsible for communication, as well safety and security in connected environments, and the need
as safety and security checks of applications, and it for interindustry standardized protocols will most likely result
establishes a defined car interface, including remote diagnostics. in the emergence of the automotive Ethernet as a key enabler,
Automotive suppliers and technology players have already especially for the redundant central data bus. Ethernet
begun to specialize in some of these stacks. Notable examples solutions will be required to ensure reliable interdomain
are in infotainment (event-driven stack) and is artificial communication and satisfy real-time requirements by adding
intelligence and sensing for high-performance applications. Ethernet extensions like audio-video bridging (AVB) and time-
An expanded middleware layer will abstract applications from sensitive networks (TSN). Industry players and the OPEN
hardware Alliance support the adoption of Ethernet technology, and
As vehicles continue to evolve into mobile computing many automakers have already made this leap.
platforms, middleware will make it possible to reconfigure Traditional networks such as local interconnected networks
cars and enable the installation & upgrade of their software. and controller area networks will continue to be used in the
In the middle term, the number of onboard sensors will spike vehicle, but only for closed lower-level networks, for instance,
significantly in the sensor and actor area. Technologies such as FlexRay
In the next two to three vehicle generations, automakers will and MOST are likely to be replaced by automotive Ethernet
install sensors with similar functionalities to ensure that and its extensions, AVB and TSN.
sufficient safety-related redundancies exist. In the long term, Going forward, we expect the automotive industry to also
however, the automotive industry will develop specific sensor embrace future Ethernet technologies such as high-delay
solutions to reduce the number of sensors used and their bandwidth products (HDBP) and 10-gigabit technologies.
costs. Which scenario will come to pass depends on OEMs will always tightly control data connectivity for functional
regulation, the technical maturity of solutions, and the ability safety and HAD but will open interfaces for third parties to
to use multiple sensors for different use cases. access data
Sensors will become more intelligent Central connectivity gateways transmitting and receiving
System architectures will require intelligent and integrated safety-critical data will always connect directly and
sensors to manage the massive amounts of data needed for exclusively to an OEM back end, available to third parties

21 February 2018

insight

for data access, except where obliged by regulation. In requirements, and security and privacy concerns.
infotainment, however, driven by the “appification” of the Assessing the future implications of vehicle software and
vehicle, emerging open interfaces will allow content and app electronic architecture
providers to deploy content, while OEMs will keep the While the trends affecting the automotive industry today
respective standards as tight as possible. are generating major hardware-related uncertainties, the
Today’s on-board diagnostics port will be replaced with future looks no less disruptive for software and electronic
connected telematic solutions. Physical maintenance access architecture. Many strategic moves are possible:
to the vehicle network will not be required anymore but can automakers could create industry consortia to standardize
go through the OEMs’ back ends. OEMs will provide data vehicle architecture, digital giants could introduce onboard
ports in their vehicle back end for specific use cases such as cloud platforms, mobility players could produce their own
lost-vehicle tracking or individualized insurance. Aftermarket vehicles or develop open-source vehicle stacks and software
devices, however, will have less and less access to vehicle functions, and automakers could introduce increasingly
internal data networks. sophisticated connected and autonomous cars.
Large fleet operators will play a stronger role in the user The transition from hardware-centric products to a software-
experience and will create value for end customers, for oriented, service-driven world is especially challenging for
example, by offering different vehicles for different purposes traditional automotive companies. Yet, given the described
under one subscription (such as weekend or daily commute). trends and changes, there is no choice for anyone in the
This will require them to utilize the different OEMs’ back industry but to prepare. We see several major strategic
ends and start consolidating data across their fleets. Larger pushes:
databases will then allow fleet operators to monetize Decouple vehicle and vehicle-functions development cycles.
consolidated data and analytics not available on the OEM OEMs and tier-one suppliers need to identify how to develop,
level. offer, and deploy features largely apart from vehicle-
Cars will use the cloud to combine onboard information with development cycles, both from a technical and organizational
offboard data perspective.
Nonsensitive data (that is, data that are not personal or safety Define the target value add for software and electronics
related) will increasingly be processed in the cloud to derive development. OEMs must identify the differentiating features
additional insights, though availability to players beyond for which they are able to establish control points; define the
OEMs will depend on future regulation and negotiations. As target value add for their own software and electronics
the volumes of data grow, data analytics will become development; and identify areas that become a commodity
critically important for processing the information and or topics that can only be delivered with a supplier or partner.
turning it into actionable insights. The effectiveness of using Attach a clear price tag to software. Separating software from
data in such a way to enable autonomous driving and other hardware requires OEMs to rethink their internal processes
digital innovations will depend on data sharing among and mechanisms for buying software independently. Here
multiple players. It’s still unclear how this will be done and suppliers (tier one, tier two, and tier three) also play a crucial
by whom, but major traditional suppliers and technology role as they need to attach a clear business value to their
players are already building integrated automotive platforms software and system offerings to enable them to capture a
capable of handling this new plethora of data. larger revenue share.
Cars will feature updateable components that communicate
bidirectionally Design a specific organizational setup around new electronics
Onboard test systems will allow cars to check function and architecture (including related back ends). Automotive
integration updates automatically, thus enabling life-cycle players—both OEMs and suppliers—should also consider a
management and the enhancement or unlocking of aftersales different organizational setup for vehicle-related electronics
features. All ECUs will send and receive data to and from topics.
sensors and actuators, retrieving data sets to support Design a business model around automotive features as a
innovative use cases such as route calculation based on product (especially for automotive suppliers). To remain
vehicle parameters. competitive and capture a fair share of value in the field of
To achieve smartphone-like upgradability, the industry needs automotive electronics, it is crucial to analyze which features
to overcome restrictive dealer contracts, regulatory add real value to the future architecture and therefore can be
monetized

February 2018 22





























KNOW OUR MEMBER

Joshi Autozone Pvt Ltd, Chandigarh

Joshi Autozone Pvt Ltd, a life Member of F A D A was Joshi Autozone is well known for its customer centric
established in 1997. It is a 3-S facility of Mercedes-Benz approach, honest and transparent dealings. The customer
located at 84-85, Industrial Area Phase II, Chandigarh. satisfaction and delight is the philosophy that drives
Joshi Autozone Pvt Ltd is a unit of Joshi Group. The Group everyone in Joshi Autozone. The dealership attributes its
has more than 10 showrooms of different brands and 4 phenomenal success and large customer base to the
showrooms of Mercedes-Benz all located at well-connected constant focus on offering reliable and high quality service.
prominent places for the convenience of customers. The
elegant showrooms are aesthetically designed and boast The driving force behind the tremendous growth of Joshi
of all modern gadgets & fixtures. The workshops in Group attributes to its directors Mr Deepak Joshi, Mr Nikhil
Chandigarh, Ludhiana and Jalandhar, are equipped with Joshi & Mr Sahil Joshi who are fully committed to their
state-of-the-art machines & tools and manned by competent business. The journey of Joshi Group started in August 1987
technicians for precise fault identification, repair and with a Maruti Service Station with the intend to provide
service of vehicles. The dealerships offer an environment unmatched services to its customers. It was awarded A-
that has set new benchmarks in terms of ambience, comfort Category Maruti Authorised Service Centre in 1991. In 1997,
and service. it became Maruti authorised dealership and won 33 awards
for excellence in sales
The Chandigarh dealership is the biggest composite facility and service. The group
of Mercedes-Benz having about 1 lakh square feet area, has to its credit an
with a display area for 27 cars. The showroom having 3 unbeaten record for
floors displays full range of Mercedes-Benz including POC retaining No.1 SSI rank
and AMG / Dream Cars. The rich and elegant interiors for 6 years.
provide a perfect ambience for well-heeled, upwardly
mobile Mercedes-Benz clientele. The workshop is equipped As the Group expanded,
with state-of-the-art machines and tools for diagnostic, it added dealerships of
service and repair of Mercedes-Benz cars. The dealership Honda Motorcycle
has acquired a very high level of technical competence Scooter (2005), Honda
proving equal to the exacting technical standards of Car & Tata Motor
Mercedes-Benz. dealerships (2006), Fiat
India (2007), Hyundai
Motor (2008 & 2009) &
Mercedes-Benz (2011).

The core strengths of
Joshi Autozone rest on
highly skilled, trained
and motivated Deepak Joshi

manpower – 800+ employees in its Mercedes-Benz, Hyundai
and Honda Scooter dealership across Chandigarh,
Panchkula, Mohali, Jalandhar and Ludhiana. The
performance of all the dealerships was noteworthy. The
combined sales tally of all the dealerships in the year gone
by was: 500 Mercedes-Benz, 1500 Hyundai and around
10,000 motorcycle/scooters. The cumulative turnover of
Joshi Autozone was close to Rs. 400 crore.

The motto of Joshi Autozone is to offer the best in terms of
quality, trust and customer experience, and settle for nothing
but the best!

We, in F A D A, wish everyone at Joshi Autozone to Scale New
Heights together1

37 February 2018

Awards & Recognitions

J D Power Honours Highest-Ranked Performers in Customer
Satisfaction at India Awards Event

J D Power recognized the highest-performing automotive, two- Award Recipients for J D Power India Syndicated
wheeler, tractor and tyre brands in its 2017 India customer Studies
satisfaction studies at an award ceremony held in New Delhi
on February 14, 2018. Darren Slind, Vice President South 2017 INDIA ORIGINAL EQUIPMENT TYRE CUSTOMER
Asia, ASEAN and Oceania, J D Power Singapore and Jacob SATISFACTION INDEX (TCSI) STUDY
George, Vice President and General Manager, J D Power Asia • Highest Customer Satisfaction with Original Tyres—Ceat.
Pacific were also present at the occasion. 2017 INDIA DEALER SATISFACTION WITH AUTOMOTIVE
Federation of Automobile Dealers Associations (F A D A) MANUFACTURER INDEX (DSWAMI) STUDY
was represented by Nikunj Sanghi, Past President and • Highest in Dealer Satisfaction among Manufacturers of
Director – International Affairs; Vinkesh Gulati, Hony
Secretary; and Saharsh Damani, CEO and presented the Passenger Vehicles (seven consecutive years) - Toyota
awards to Mahindra & Mahindra, Toyota Kirloskar Motor • Highest in Dealer Satisfaction among Manufacturers of
and Royal Enfield for their Highest Dealer Satisfaction with
Automotive Manufacturers Index (DSWAMI) for the year Two-Wheelers - Royal Enfield
2017 in the category of Commercial Vehicles, Passenger • Highest in Dealer Satisfaction among Manufacturers of
Vehicles and Two-Wheelers, respectively. The DSWAMI study
was conducted by J D Power in association with F A D A and Commercial Vehicles—Mahindra.
eight edition i.e. 2018 DSWAMI study is being conducted in 2017 INDIA VEHICLE DEPENDABILITY STUDY (VDS)
the months of January to March 2018. • Most Dependable Compact Car - Hyundai i10
• Most Dependable Entry Compact Car - Maruti Alto 800
• Most Dependable Upper Compact Car - Honda Brio
• Most Dependable Premium Compact Car - Hyundai i20
• Most Dependable Entry Midsize Car - Toyota Etios
• Most Dependable Midsize Car - Honda City

Awarded to Mahindra & Mahindra

Awarded to Toyota Kirloskar Motor Awarded to Royal Enfield

• Most Dependable MUV/ MPV - Toyota Innova
• Most Dependable SUV - Ford Ecosport.
2017 INDIA SALES SATISFACTION INDEX (SSI) STUDY
• Highest in Sales Satisfaction among Mass Market Brands

- Mahindra.

February 2018 38

Awards & Recognitions

2017 INDIA CUSTOMER SERVICE INDEX (CSI) STUDY 2017 INDIA TWO-WHEELER CUSTOMER SERVICE INDEX (2WCSI)
• Highest in Customer Satisfaction with After-Sales Service STUDY
• Highest in Customer Satisfaction with Two-Wheeler After-
among Mass Market Brands - Hyundai
• Highest in Customer Satisfaction with After-Sales Service Sales - TVS.
2017 INDIA TWO-WHEELER INITIAL QUALITY STUDY (2WIQS)
among Luxury Brands - Mercedes-Benz. • Highest Ranked Executive Scooter in Initial Quality -
2017 INDIA INITIAL QUALITY STUDY (IQS)
• Highest Ranked Entry Compact Car in Initial Quality - Honda Activa I
• Highest Ranked Economy Motorcycle in Initial Quality -
Maruti Suzuki Alto 800
• Highest Ranked Compact Car in Initial Quality - Maruti TVS Star City Plus
• Highest Ranked Executive Motorcycle in Initial Quality -
Suzuki Wagon R
• Highest Ranked Upper Compact Car in Initial Quality, in Hero Super Splendor
• Highest Ranked Upper Executive Motorcycle in Initial
a tie - Hyundai Grand i10
• Highest Ranked Upper Compact Car in Initial Quality, in Quality - Suzuki Gixxer/ Gixxer SF
• Highest Ranked Premium Motorcycle in Initial Quality -
a tie - Ford Figo Next Gen
• Highest Ranked Premium Compact Car in Initial Quality TVS Apache RTR 160.
2017 INDIA TWO-WHEELER AUTOMOTIVE PERFORMANCE,
- Volkswagen Polo/ Cross Polo/ Polo GT EXECUTION AND LAYOUT (2WAPEAL) STUDY
• Highest Ranked Entry Midsize Car in Initial Quality - • Most Appealing Executive Scooter - Honda Activa I
• Most Appealing Economy Motorcycle, in a tie - Honda
Toyota Etios
• Highest Ranked Midsize Car in Initial Quality in a tie - Livo
• Most Appealing Economy Motorcycle, in a tie - TVS Sport
Honda City • Most Appealing Executive Motorcycle - Hero Super
• Highest Ranked Midsize Car in Initial Quality in a tie -
Splendor
Hyundai Verna • Most Appealing Upper Executive Motorcycle - Bajaj
• Highest Ranked MUV/ MPV in Initial Quality (13
Avenger 150
consecutive years) - Toyota Innova Crysta • Most Appealing Premium Motorcycle - Honda CB Hornet
• Highest Ranked SUV in Initial Quality, in a tie - Hyundai
160R.
Creta 2017 INDIA TRACTOR CUSTOMER SERVICE INDEX (CSI) STUDY
• Highest Ranked SUV in Initial Quality, in a tie - Maruti • Highest in Customer Service among Tractor Brands - New

Suzuki S-Cross. Holland.
2017 INDIA AUTOMOTIVE PERFORMANCE, EXECUTION AND 2017 INDIA TRACTOR PRODUCT PERFORMANCE INDEX (PPI)
LAYOUT (APEAL) STUDY STUDY
• Most Appealing Entry Compact Car - Hyundai Eon • Highest Ranked Performance Below 31 HP - Eicher
• Most Appealing Compact Car - Maruti Suzuki Celerio
• Most Appealing Upper Compact Car - Hyundai Grand i10 Tractors
• Most Appealing Premium Compact Car - Hyundai Elite • Highest Ranked Performance 31-40 HP - New Holland
• Highest Ranked Performance 41-50 HP - New Holland
i20/ Active • Highest Ranked Performance Above 50 HP - Mahindra.
• Most Appealing Entry Midsize Car - Honda Amaze
• Most Appealing Midsize Car - Honda City As the trusted symbol of the Voice of the Customer, J D Power
• Most Appealing MUV/ MPV (13 consecutive years) - awards help companies enhance consumer consideration and
ensure their brands stand out from the crowd
Toyota Innova Crysta
• Most Appealing SUV—Mahindra XUV 500.

39 February 2018

bUSINESS MANAGEMENT

Increase Auto Dealership Sales
Performance

- Revolux Led Sulutions

In today’s recovering economy, car dealerships are faced with improve the ROI of your offering. Also, don’t offer a reward
unique sales challenges to engage potential buyers. Dealers that is too expensive or you will run the risk of making the
that want to grow their sales, even in a relatively slow market, incentive program cost-prohibitive.
can take several steps to achieve this goal. Check out these 4 4. Train Your Staff
ways to increase your auto dealership sales performance: Sales training can be an integral part of improving your auto
1. Focus On The Customer dealership sales performance. Training will help to enhance
It is easy to get distracted by what your competitors are doing your team’s communication skills, fine tune their sales
but don’t forget about one of the most important parts of the methodologies, and get everyone on the same track to
sales interaction: the customer. Collecting information success. Seasoned employees might have valuable tips for
before, during, and after customer interactions is a helpful new hires and you should consider incorporating them into
tool to improve focus on your customer needs and buying your training. Send out a survey to your top sales representatives
motivators. After receiving your client information start and get feedback on their inside sales techniques:
developing buyer personas: How do you develop repertoire with potential customers?
Who is your main buyer? What’s the best way to continue relationships with leads?
What are their needs and wants? Are there any resources you follow to improve your sales
What places are they looking for car information? techniques?
Answering these questions will help you to harness your Sharing the answers to these questions with new hires or
buying potential and close more sales. Craft marketing during training sessions will help to provide a well-rounded
messages directly speak to your buyer persona and watch understanding of the industry. You could even consider
your lead generation improve! implementing a one-on-one shadowing program for new
2. Use CRM Technology employees.
So you are collecting information and creating buyer With the right kind of approach and a commitment to
personas, now what? Customer relationship management, improvement, any auto dealership can improve sales. The
also known as CRM, is a tool that allows dealerships to keep key take away of this article is to better understand your
track of customer information and interactions. One of the customer. Creating a buyer persona is a great way to
biggest benefits of using a CRM is that it allows you track all comprehend who your customer is, where they are looking
customers throughout the buying funnel and to better for information, and what their needs are. Once you have
understand your sales analytics. Organize your contacts, completed this to-do, your facility can then fine-tune
sales benchmarks, and performance in one location. marketing & sales methods to match what the customer wants!
3. Offer Incentives customers. It also helps to forge a closer partnership between
As a way of boosting sales performance, auto dealerships credit and sales personnel. In addition, most credit
offer incentives to drive foot traffic to the lot. Before departments could begin sharing existing insights with sales
determining what type of incentive to offer, first outline your and marketing to provide customer insight. Credit could
strategy. Answer yourself the following questions: compile lists of customers that pay on time or are
What are the barriers of entry?
How will you follow up with these potential leads?
What is your overall end goal in giving an incentive?
How will you track your ROI?

Consider offering an incentive to customers who take a test
drive or sign up to receive information about a specific kind
of car that you want to sell. Targeting specific activities will

February 2018 40

bUSINESS MANAGEMENT

underutilizing their credit limits, information that could Companies achieve significant benefits as they put these best
improve services and increase sales. Credit and sales could practices into place, such as shortening the sales cycle by up
also review limits together more often. to 12 days; increasing up-sell and cross-sell opportunities
Some companies have created committees to review accounts by 2% to 3%; and increasing pipeline close rate by up to 5%.
receivable and credit policies, thus formalizing the credit- CONCLUSION
sales partnership and ensuring enterprise- wide attention to The effective integration of enterprise data, systems and
customers and credit decisions. As a result, the decision- processes provides the foundation for an organization in
making processes always take into the consideration the which all component pieces work together to support the
perspectives of both credit and sales. These processes tend core business and promote growth. The credit department
to be flexible so decisions are based on the knowledge and can play an essential role in these integration efforts,
insight that credit and sales have regarding each customer. particularly by providing sales staff with valuable insights
This ensures consistent, predicatble outcomes that maximize into existing and prospective customers. The ability to
opportunities and minimize risks. integrate and analyze large databases of customer
Cooperation between credit and sales ultimately becomes a information can yield significant benefits, such as more
two-way street. Not only does credit assist sales, but sales accurate and efficient prescreening of customers, online
assists credit. Sales can act as an extension of collection credit screening and automated approval, reduction of credit
activities, using its understanding of customers to help holds, identification of up-sell opportunities among existing
resolve collection issues quickly and amicably. Each plays a customers and more precise targeting of new customers. The
mutually reinforcing role in providing insight into opportunities value of the credit department thus expands beyond its ability
and risks, identifying market trends, understanding customer to help the company avoid bad customers. Credit can help
behaviour, and delivering customer service. Once these efforts the company find good customers and deliver better service
begin, credit and sales will discover new ways to collaborate. to them

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]

41 February 2018

Auto expo 2018

Honda Opens Booking for X-Blade Motorcycle

Honda Motorcycle & Scooote India (HMSI) announced unprecedented response from Generation Z. We are happy to
Bookings Open for its brand new 160cc sporty motorcycle X- open the bookings for new Honda X-Blade with the aggressive
Blade. price of under 79,000 (Ex-showroom, Delhi). The X-Blade
Elaborating on the announcement of X-Blade bookings deliveries will start from the middle of March on first-come-
commencement, Y S Guleria, Sr VP - Sales and Mktg, HMSI first-serve basis.”
said, “Honda unveiled its 4th brand new model of 2018 – X- The stylish and aspirational all-new X-Blade cuts through
Blade at Auto Expo 2018. We are indeed very excited to receive the dark with its transformer-inspired futuristic LED headlight
- a segment first feature and sporty dual outlet port silencer.
Powered by 162.71 cc HET engine, X-Blade’s aggressive
and futuristic design is further accentuated by link type
gear shifter, unique spilt grab rails, stylish alloy wheels
with front disc brake, hugger fender and muscular
graphics.
The new digital instrumentation comes with a Service Due
Indicator and gear position indicator. The long 1,347mm
wheelbase and the wider 130 section tubeless rear tyre
enhance stability in bad roads and ensures comfort during
longer rides.
Marking its presence on the road, X-Blade comes in 5 sporty
colours – Matte Marvel Blue Metallic / Matte Frozen Silver
Metallic / Pearl Spartan Red / Pearl Igneous Black and Matte
Marshal Green Metallic.

Toyota Showcases New Land Cruiser Prado

Toyota Kirloskar Motor showcases the new land cruiser for ardent adventure lovers. One of the finest of SUVs, today
Prado at the Auto Expo 2018. One of the most celebrated off- Prado has been esteemed in around 190 countries, by 2.95
roader globally, the Prado in its renewed avatar comes with million customers.
robust exteriors, impressive and highly functional interiors, The New Land Cruiser Prado will be available in three new
while maintaining the legendary toughness and substance Exterior Colors- Blackish Ageha, Avant Garde Bronze and
of the SUV and is available in D-4D Diesel with engine offering Vintage Brown Pearl apart from its existing colors (White
a power of 127 kW @ 3400 rpm and a torque 410 Nm @ Pearl, Silver Metallic, Grey Metallic, Attitude Black Metallic
1600-2800 rpm. and Red Mica Metallic) and two New Interior Colors- Neutral
Commenting on the new offering, N Raja, Dy MD, Sales & Beige and Redwood apart from the existing Black color.
Service, TKM said, “We are delighted to showcase the renewed
version of our luxury SUV with go-anywhere capability – new
Prado in the Indian market. Over the years, we have continued
to hone the Prado to embody an SUV of indomitable repute
which has made it a head turner in any city and off-roader
that will leave others trailing behind. Encompassing the
enduring Land Cruiser DNA of a hard-core off-roader ready
to take on any hurdles coupled with advanced robustness
and functionality, the Prado’s heroic stance traces back to
years of off-roading adventure and dominance on city roads.
Also equipped with top-notch off-road features such as crawl
control and multi-terrain select, the Prado is an offering apt

February 2018 42

Auto expo 2018

Tata Motors Shaping India’s Future with ‘Smart Mobility, Smart Cities’

With a fresh new appearance, in the 150th year of the Group, it several notches higher, outlining our plans for the future of
Tata Motors brought alive the Government’s vision of smart India’s Smart Cities and its connected generation. Our ‘Smart
cities of the future with its ‘Smart Mobility, Smart Cities’ theme Mobility, Smart Cities’ pavilion has been designed keeping
at the ‘Auto Expo - The Motor Show 2018’. Showcasing mobility the future Smart Cities and emerging market trends in mind.
solutions for intelligently connected cities designed to offer Our exhibits are a clear indication of our capability to meet
convenience, safety, security, and efficiency to its customers, the growing aspirations of our customers. Our new future
Tata Motors demonstrated its capabilities shaping India’s ready and PV Architectures along with the H5X, 45X concepts
future of mobility. and the all-new LCV, Tata INTRA represent the changing face
In the Passenger Vehicles (PV) segment, two attractive of Tata Motors in our journey towards shaping the future of
innovations made their global debut at this motor show. mobility in the country.”
These were the ‘H5X concept’ from the – ‘Optimal Modular
Efficient Global Advanced’ Architecture – the 5-seater luxury
SUV, set to redefine the SUV benchmarks in the country and
the ‘45X concept’ – the premium hatchback based on the
versatile – ‘Agile Light Flexible Advanced’ Architecture
In the Commercial Vehicles (CV) segment, new Tata INTRA -
the stylish, feature loaded, compact truck that is set to re-
define the SCV segment was unveiled. Bollywood Superstar
and Tata Motors’ CV business brand ambassador, Akshay
Kumar made a grand entry unveiling the Tata INTRA in a
dramatic fashion. Also displayed were the SIGNA 4323, India’s
first 6-axle rigid truck with a 30-ton payload, the highest in
the market and the all-new Ultra T.7, an elegant LCV based on
the modular ULTRA platform and with a 1.9-meter, wide cabin.

The company also announced its new design language Providing smart solutions in an Urban high-density
‘IMPACT 2.0’ for PVs and for CVs, ‘Premium Tough’ - a design Residential Zone, Tata Motors revealed two innovations of
that reflects a sense of purpose coupled with strength and its best-selling compact SUV - Nexon Aero and the soon to be
quality. launched Nexon AMT.
Commenting on the occasion, Guenter Butschek, CEO & MD, In the Smart Energy Zone, Tata Motors displayed an extended
Tata Motors, said, “Tata Motors has a long-standing range of six EV products enabling personal and mass mobility.
relationship with Auto Expo, with special premieres of leading A special edition of the lifestyle SUV - Tata Hexa showcased
edge solutions from the company’s Passenger and in the Semi-Urban Zone for customers, who enjoy a power-
Commercial Vehicles portfolio. This Auto Expo, we have taken packed and adrenalin filled driving experience.
Leveraging the new modular Ultra platform, the Intracity
Zone highlighted the all-new Ultra T.7, an elegant LCV with a
1.9-meter wide cabin that will redefine goods transportation
in the 7-ton segment, delivering faster turnaround, best-in-
class fuel economy and lower total cost of ownership. In
addition, on display was the MAGNA Bus – India’s first bus
body code compliant two-axle OEM coach with world-class
design and engineering inputs from our partner Marcopolo,
which is set to transform intracity travel in India.
Completing the line-up is the Xenon Special Police Vehicle
showcasing Tata Motors Defence capabilities in the city
protection.

43 February 2018

Auto expo 2018

Mahindra Showcases ‘Future of Mobility’

Mahindra & Mahindra Ltd unveiled its plans to shape the It is powered by Mahindra’s new electric Powertrain, which
‘Future of Mobility’ at the Auto Expo 2018. features batteries that can be swapped to extend the vehicle’s
Apart from its wide range of electric vehicles, Mahindra also range, allowing it to operate uninterrupted for long hours.
showcased its futuristic range of products. This included The ATOM offers indigenously-built, last-mile urban mobility
SsangYong Motor’s new G4 Rexton and TUV Stinger. solution. It is also equipped with an intelligent connectivity
Anand Mahindra, Executive Chairman, Mahindra Group, said, system, making bookings and payments seamless and easy.
“As India aspires to global leadership on climate action, the e-KUV100 - As India’s first electric SUV, e-KUV100 heralds a
time is right to develop sustainable mobility solutions for new generation of EVs. e-KUV100 combines the benefits of an
the future. Mahindra’s electric pavilion at the Auto Expo SUV with the unique advantage of an electric vehicle. At the
showcases our vision of the Future of Mobility - one that core of this eco-friendly vehicle lies a city-friendly motor. It
offers Clean, Connected and Convenient vehicles to our boasts a range of over 140 km, and optional fast charging
consumers in India and around the world.” which can extend its range by 80% in less than an hour.
Treo - Mahindra’s first low maintenance Li-thium ion battery
Mahindra – Pioneering Clean Electric Mobility powered three-wheeler is aptly named Treo. This vehicle aims
As the pioneers of electric mobility and powertrain solutions to promote mass adoption of electric vehicles in the country.
in India, Mahindra has the right technology and products to Mahindra’s Existing Range of Electric Vehicles
set up a robust EV ecosystem in the country. With a slew of Mahindra has been a true pioneer in the EV space, leading
technologically advanced concept products, systems and transformation with its EV range comprising the e2o, e2oPlus,
solutions and the existing range of electric vehicles, Mahindra e-Verito and e-Supro.
is all poised to take electric mobility to the next level. e2oPlus - An all-electric flagship hatchback from Mahindra
All New Concepts & Solutions Electric stable which is an environment friendly car and
UDO - UDO is a compact two-seater Concept Electric mobility boasts of a host of technologically advanced features in
pod, which has been conceptualized to address the issues addition to being emission-free. It is the perfect family car
that plague urban mobility, including traffic congestion and for intra-city use and is an embodiment of green and cost-
pollution. UDO is targeted at the tech savvy urban citizen effective vehicle technology.
and offers an enclosed architecture with micro climate e-Verito - An all-electric, zero emission sedan and features
control, lighting, touch-screen infotainment and blue-tooth an innovative combination of advancements in automotive,
enabled audio systems, insulating the urban commuter from electronics and information technology paired with minimal
the harshness of the urban environment. running costs and zero tailpipe emissions.
ATOM - A futuristic and new age urban mobility concept for a e-Supro - India’s first zero emission, all-electric range of cargo
smart India, ATOM is a unique object of mobility designed to and passenger vans, the e-Supro ushered in a whole new
cater to varied passenger needs with the perfect blend of concept in cargo transportation and people movement. The
‘Convenience, Comfort and Intelligence’. platform caters mainly to the B2B segment.
Creating Platforms for Connected & Convenient Experiences
+NEMO (NExt-Gen Mobility) is India’s first cloud-enabled
mobility platform, developed by Mahindra Electric
exclusively for electric vehicles. This connected platform
provides contextual information about battery and vehicle
performance which is unique to EVs.
Mahindra’s Dealership of Future - New format conceived by
Pininfarina to redefine customer experience. The company
chose Pininfarina’s 88 years of experience in envisioning the
future to shape a breakthrough brand and customer
experience and presented a new concept in the Dealership of
Future.

February 2018 44

Auto expo 2018

Ashok Leyland Unveils an Electric Bus - Circuit-S

The global partnership between the Hinduja group flagship, In a move that is transformational for the mass transportation
Ashok Leyland and SUN Mobility, announced in July 2017, system in India, Circuit- S, India’s first swap battery bus,
took wings at the Auto Expo 2018 with Ashok Leyland unveiling which is designed for Indian conditions with seating capacity
its first electric bus – Circuit-S – powered by SUN Mobility’s ranging from 25 - 35 seats, runs on easily swappable, smart
swappable Smart BatteryTM. batteries that are small and 1/4th the weight of a regular Li-
ion battery. In a first of its kind demonstration, Ashok Leyland
and SUN Mobility showcased the “refueling/swapping” of its
electric bus in under 4 minutes, which is faster than
conventional refueling along with the swapping of bus drivers
and conductors at a depot.
“Our vision is to transform public transportation by
designing, developing, and marketing a breakthrough, India-
specific solution that makes our city buses emission-free,
cost-effective and scalable,” said Vinod K Dasari, MD, Ashok
Leyland. “We have been able to bring this unique, world-
class solution to market within seven months of partnership
with SUN Mobility. The Circuit-S bus will cost lesser, would
require minimal maintenance owing to lesser moving parts,
will be lighter owing to smaller battery pack and most
importantly, it will have zero tailpipe emissions.”

45 February 2018

Surveys & Studies

Young Two-Wheeler Owners Continue to Experience Higher
Instances of Initial Quality Problems, J D Power Finds

Although initial product quality of two-wheelers in India has respectively), purchase reasons also differ between the two
steadily improved over the years, young vehicle owners, who groups—19% of younger buyers say looks and styling is the
account for the majority of buyers, continue to experience main purchase reason compared with 12% of older buyers.
higher instances of initial quality problems, according to
the J D Power 2018 India Two-Wheeler Initial Quality StudySM Following are some of the key findings of the study:
(2WIQS), released on January 30, 2018.
The study finds that younger owners—30 years and younger • Overall two-wheeler quality influences loyalty: Owners
(58%)—experience higher levels of initial quality problems who experience fewer problems than expected are over
than owners who are 31 years or older (144 PP100 vs. 113 two times more likely to recommend their two-wheeler
PP100, respectively). This difference (31 PP100) in problems model to family and friends compared with those owners
experienced can be primarily attributed to younger buyers who experience more problems than expected (53% vs.
experiencing a higher number of manufacturing defects/ 7%, respectively).
malfunctions problems in three categories measured in the
study: ride and handling; fit and finish; and engine. All • Initial quality improves in both scooter and motorcycle
problems are summarized as the number of problems per segments: Overall initial quality averages 121 PP100
100 vehicles (PP100), with a lower PP100 score indicating a for scooters and 136 PP100 for motorcycles, an
lower rate of problem incidence and therefore higher initial improvement of 8 PP100 and 14 PP100, respectively,
quality. from last year. Among vehicle systems, the greatest year-
“While the industry has made over-year improvement is in the brake category.
significant strides in improving
product quality over the years, the
challenge lies in aligning vehicle
design and execution with
requirements from a very diverse
set of customers who not only
purchase differently but also have
contrasting after-sales behavior,”
said Kaustav Roy, Director at J D
Power, Singapore. “With a vast
young population being labelled
as the driving force behind the
Indian economy in years to come,
OEMs that are able to better
understand and incorporate the
requirements of customers in this
age bracket are likely to gain a
competitive advantage.”
The study also measures key
aspects surrounding the purchase
process, and findings indicate
notable differences between these
two groups. While more younger
buyers indicate using the internet
to shop for a new two-wheeler than
older buyers (19% vs. 11%,

February 2018 46

Surveys & Studies

• Salesperson explanations during vehicle delivery In the motorcycle segment, Honda Dream Yuga and TVS Star
influences problem instances: More than three-fourths City Plus (114 PP100) rank highest in a tie among economy
(77%) of owners were advised by the salesperson about models, and Hero Super Splendor (121 PP100) ranks highest
the vehicle do’s and don’ts during vehicle delivery. These among executive models. Suzuki Gixxer/ Gixxer SF (93 PP100)
owners experienced significantly fewer instances of ranks highest among upper executive models, and Bajaj
initial quality problems than those who were not advised Avenger 220 (100 PP100) ranks highest among premium
of the same (101 PP100 vs. 229 PP100, respectively). models.
The 2018 India Two-Wheeler Initial Quality Study (2WIQS) is
• First-time buyers cite fewer initial quality problems: More based on evaluations from 10,102 owners who purchased a
than three-fourths (82%) of two-wheeler owners are first- new two-wheeler vehicle between March 2017 and October
time buyers, and they cite fewer problems than those 2017. The study includes 88 two-wheeler models from 10
with previous ownership experience (121 PP100 vs. 175 makes. The study was fielded from September 2017 to
PP100, respectively). The difference is largely influenced December 2017 in 45 cities across India.
by problems experienced in the engine category. The study measures problems owners experienced with their
new two-wheeler during the first two to six months of
Study Rankings ownership. It examines 138 problem symptoms covering
seven categories (listed in order of frequency of reported
Award recipient segments include scooters (executive) and problems): engine; brakes; gauges and controls; fit and
motorcycles (economy, executive, upper executive and finish; lights/ electricals; ride and handling; and
premium). transmission
In the scooter segment, Honda Activa 125 (90 PP100) ranks
highest among executive models.

2018 India Dealer Satisfaction Study

Dear Automobile Dealers,
We wish to inform that, for an eighth consecutive year, J D Power Singapore Pte Ltd is conducting the Dealer Satisfaction
with Manufacturers of Passenger Vehicles, Two-Wheelers and Commercial Vehicle study among dealers in India in
association with the Federation of Automobile Dealers Associations of India (FADA).
We kindly invite you to participate in this study in the interest of the retail and dealer fraternity.
As dealers, you have to work within a dynamic marketplace, where you may need the support and direction of your
OEMs. The primary objective of the study is to measure your satisfaction with the OEM that you represent so as to
increase the quality of service and level of support that the OEMs can provide to you. In addition, the study also
examines your views on a variety of issues relevant to the automotive industry and the retail distribution system which
are of importance to both manufacturers and dealers. Hence your frank opinion is very valuable to this study.
The study is an opportunity for you to share your opinions with automobile manufacturers’ top management, dealer
councils and board of directors. By participating in the survey, you will be taking a role in ensuring that manufacturers
hear the voice of the dealer.
This survey will be conducted through a telephonic interview and should take approximately 45 minutes to complete.
For questions requiring operational knowledge, you may consult with the appropriate staff members before answering
or pass on their name and contact details to the interviewers who will contact them separately.
We would like to assure you that all information collected will be reported at an aggregate level. Individual dealer
information will be kept confidential and will NOT be released without prior approval.
The survey is being conducted by Kadence International on behalf of J D Power Singapore Pte Ltd. If you have any
questions, please send an email to: Jacqueline Teo at [email protected] or Anita Rao at [email protected].
Please note that the survey will be conducted in the months of January to March 2018 Your participation during this
period is greatly appreciated.

47 February 2018

Consumer case studies

National Consumer Disputes Redressal Commission, New Delhi

Dr B C Gupta, President Member and S M Kantikar, Member

Sunil Dattatray Gaurav - Petitioner

Versus

Manager, United India Insurance Co. Ltd & Ors - Respondents

Revision Petition No. 2108 of 2017 Decided on: 01.11.2017

(Against the Order dated 09/03/2017 in Appeal No. 1876/2006 of the State Commission Maharashtra)

Consumer Protection Act, 1986 - Sections 15, 17, 19 and 21 - Motor Vehicles Act, 1988 - section 157 - Insurance - damage to
vehicle in accident - non settlement of claim by insurance company - on the date of incident, insurance policy was not in the
name of complainant rather policy, which was going to expire just a few days after accident, was never transferred in his name
- Complainant has not made any averment anywhere that he made any attempt to get policy transferred in his name - No
illegality, irregularity or jurisdictional error in order passed by State Commission - Revision petition dismissed.

Important Point

Insurance company is not liable to pay claim to complainant when insurance policy in the name of previous owner was
never transferred in favour of complainant.

Order

1. Dr B C Gupta, Presiding Member - This revision petition sale of the said vehicle and for transferring the policy in
the name of the complainant. The said vehicle met with
has been filed under section 21(b) of the CPA, 1986 an accident on the Pune-Mumbai Express Highway on

against the order dated 09.03.2017, passed by the 14.08.2003, i.e., within the currency of the insurance
policy. The complainant filed claim before the Insurance
Maharashtra State Consumer Disputes Redressal Company, but on their failure to pay the claim, the
Commission (hereinafter referred to as 'the State consumer complaint in question was filed, seeking
Commission') in First Appeal No. FA/06/1876, "United compensation of Rs. 5 lakhs for damage to the car
India Insurance Co. Ltd versus Sunil Dattatray Gurav", alongwith interest @12% p.a. and also further
vide which, while allowing the said appeal, the order compensation on various counts.
dated 22.03.2006, passed by the District Forum, Sangli,

in consumer complaint No. 58/2005, filed by the present

petitioner, allowing the said complaint, was set aside 3. The complaint was resisted by the insurance company
by filing a written reply before the District Forum in which
and the consumer complaint was ordered to be dismissed. they stated that the complainant had no insurable
interest in the matter, as the policy was not in his name
2. The brief facts of the case are that the petitioner/ at the time of the accident. The complainant had himself
complainant Sunil Dattatray Gurav purchased a vehicle, admitted that the vehicle stood transferred in his name
bearing registration No. MH-25A 1404 from the OP-3 on 21.12.2003 only, whereas the insurance policy had
Sayyed Iqbal Hanif. The said vehicle had been insured lapsed about four months before that, i.e., on 25.08.2003.
for a sum of Rs. 6 lakh for the period from 26.08.2002 to The Insurance Company denied that any intimation about
25.08.2003 in the name of the original owner, i.e., the the transfer of vehicle was given to them, either by the
OP-3. The respondent No. 1/OP-1 United India Insurance complainant or the original owner, i.e., OP-3. The insurance
Co. is the insurer of the vehicle and respondent No. 2/ company further stated that as stated in the complaint,
OP-2, Murgharajendra Co-op Bank Ltd, had advanced the OP-3 ceased to be the owner, much before the accident
loan to OP-3 for the said vehicle. It is stated in the had taken place.
consumer complaint that the said vehicle was transferred
in the name of the complainant on 24.12.2003. It is also
stated in the consumer complainant that the OP-3 had 4. The District Forum after considering the averments of
sent intimation to OP-1 Insurance Company about the the parties allowed the consumer complaint and directed

February 2018 48

Consumer case studies

the insurance company to pay a sum of Rs. 5 lakh case of third party risks only. It is clear, therefore, that
alongwith interest @9% p.a. from 29.09.2004 after in the instant case, which relates to own-damage to the
deducting the value of the salvage. The District Forum vehicle, the said section shall not have any application.
brought out that although the vehicle was transferred in The judgment of the Hon'ble Apex Court in "MD, KSRTC vs
the name of the complainant on 24.12.2003, but the New India Assurance Co." (supra) does not help the
original owner had handed over the possession of the complainant in any way, as it deals with deemed transfer
same to the complainant as per some agreement dated of the vehicle under section 157 of the MVA.
14.10.2002 and hence, the complainant was liable to be
paid the claim in question. Being aggrieved against the 8. Further, in the order quoted above, i.e., "Future Generali
order of the District Forum, the insurance company Insurance Co. Ltd vs. Sombir" (supra), the provisions of
challenged the same by way of an appeal before the State GR-17 of the India Motor Tariff Regulations, have also
Commission, which was allowed vide impugned order. been discussed in detail and it has been brought out
While passing their order, the State Commission, relying that for claims relating to own damage, a specific request
upon an order passed by the Hon'ble Supreme Court of has to be made with the insurance company within 14
India in "Complete Insulations (P) Ltd vs New India days of the purchase of the vehicle for effecting transfer
Assurance Co. Ltd" [C.A. No. 2131 of 1994 decided on of the insurance policy in his name. It has been stated in
21.11.1995], observed that section 157 of the MVA was the order as follows:-

applicable to third party risks only and hence, not "12. A perusal of the GR-17 of the India Motor Tariff
Regulation shows that the Liability Only Cover is
applicable in the present case. Being aggrieved against deemed to have been transferred from the date of
the order of the State Commission, the complainant has
filed the instant revision petition before this Commission. such transfer to a transferee, whereas for transfer of
Own Damage Section of an insurance policy, a specific
5. The learned counsel for the petitioner has been heard in request has to be made by the transferee alongwith
detail. The only point stressed during arguments by the consent of transfer and a fresh proposal form has to
said counsel says that under section 157 of the Motor be submitted with evidence of sale. It is evident that
Vehicles Act, 1988, the policy stood transferred there is no deemed transfer in such cases but a duty
automatically in the name of the complainant after the has been cast upon the transferee to make appropriate
purchase of the vehicle. The order passed by the District application for the transfer of policy in his name. The
Forum was, therefore, based on a correct appreciation natural implication of this provision is that a transferee
of the law and facts of the case and hence, the claim has to apply to the insurance company within a period
should have been allowed. The learned counsel has of 14 days of the transfer having been completed,
placed reliance on an order passed by the Hon'ble failing which, he shall not be liable for payment of
Supreme Court in "MD, Karnataka State Road Transport claim in the eventuality of such claim arising on
Corporation (KSRTC) vs New India Assurance Company account of any untoward incident."
Ltd", in support of his arguments.

6. We have examined the entire material on record and 9. In the instant case, it is quite evident that on the date of
given a thoughtful consideration to the arguments the incident, the insurance policy was not in the name of
advanced before us. the complainant rather the policy which was going to
7. The basic issue involved in the matter is whether the expire just a few days after the accident, was never
Insurance Company is liable to pay the claim to the transferred in his name. The complainant has not made
complainant, although the insurance policy in the name any averment anywhere that he made any attempt to get
of the previous owner was never transferred in favour of the policy transferred in his name. As stated in the order
the complainant. In view of the order passed by this of the District Forum also, the possession of the vehicle
Commission in "Future Generali Insurance Co. Ltd vs. was delivered to the complainant on 14.10.02, but still
Sombir" [RP No. 3216/2015 decided on 16.08.2016], the he has nowhere stated that he made attempts to have the
matter is no more 'res-integra'. It has been adequately vehicle transferred in his name.

brought out in the order passed by this Commission, 10. Based on these facts, we do not find any illegality,
after relying upon the order of the Hon'ble Supreme Court irregularity or jurisdictional error in the order passed by
the State Commission and the same is upheld. This revision
in "Complete Insulations (P) Ltd vs New India Assurance petition being without any merit, is ordered to be
Co. Ltd", that section 157 of the MVA, 1988 which is a
part of Chapter XI of the said Act is applicable in the dismissed in limini. There shall be no order as to costs.

49 February 2018

NADA Musings

Auto Sales Expected to Fall, But Industry Keeps Cool

The auto industry’s party isn’t over, but some of the guests automakers built vehicles no one particularly wanted, pushed
are leaving. them on the market and on dealers who didn’t ask for them
Last year’s sales came in at 17.1 million, the third straight and had to resort to selling them through deep discounting.
year volume exceeded 17 million, a run that set an industry That practice not only whacked front-end grosses, it did a
record. number on back-end residual values.
This year, WardsAuto predicts sales of 16.4 million, largely Today, when automakers put profits before sheer sales
because pent-up demand that had built up during the volumes, they not only behave wisely, they also do what Wall
recessionary years has pretty much abated. Street wants and expects. Volume over profit is so yesterday.
So, US dealers are expected to sell about 700,000 fewer Here’s another reason no one particularly is freaking out at
vehicles this year compared to last. That’s not great news. the prospects of selling fewer vehicles this year: The last
But there was a time when the auto industry would have recession and its horrible effect on auto sales made the
considered that catastrophic. industry realize it could endure a lot. Winston Churchill said,
Back then, when prospective annual sales were off by a few “If you are walking through hell, keep walking.” And the
hundred thousand units – let alone 700,000 – headlines would recession years were hellish for new-vehicle sales.
scream, analysts would predict the end of civilization as we In 2005, they were nearly 17 million, though largely propped
know it and automakers would knee-jerk so hard they required up by slathering on those incentives. Two years later, they
arthroscopic surgery. were down to 16.2 million.
It is different now for a couple of reasons. Then the real trouble started. They dropped to 13.4 million in
One is that automakers – the big ones anyway – focus more 2008 and hit a fiendish 10.6 million in 2009. That 6-million-
today on profits rather than on soaring sales volumes. Sure, unit drop in two short years represented a revenue loss of
everyone wants to sell a lot of vehicles, but not at losses. about $150 billion.
And although consumers likely will purchase fewer vehicles At the NADA’s annual convention in 2009, much talk centered
this year, they are buying “more vehicle”, Cox Automotive on sheer survival. That year, a convention speaker, former
Chief Economist Jonathan Smoke says. They’re opting for President Bill Clinton told dealers, “Hang in there.” Most of
higher-profit utility vehicles, upscale trim levels and assorted them managed to do that, as well as to stay relatively
options. That beefs up transaction prices. (The average vehicle optimistic. “It’s just the way we are,” Florida dealer Alan
transaction price now is nearly $35,000). Starling told me during the thick of it.
The push market of over production, heavy incentives and Back then, Mike Maroone, who was president of dealership
deep discounting in the late 1990s and early 2000s led to chain AutoNation, spoke of a better future when sales would
mounting losses despite high sales. That business model recover and eventually reach a “sweet 16 million.”
made about as much sense as fishing in man-made lakes in The adjective was important, because he wasn’t referring to
the desert. jacking up the numbers by whatever means necessary. Rather,
Today, major automakers show greater discipline, although he was talking about attaining a profitable 16 million. He
they overbuilt a bit in the first half of last year. “Incentive said that would be sweet, and it was when it came about.
levels as a result of (mounting inventories) had to go up The recovering industry nearly hit 16 million in 2013 when
quicker than they should,” Hyundai Motor America Chief sales reached 15.9 million units. The next year, deliveries
Operating Officer Brian Smith tells WardsAuto. He notes not only surpassed 16 million, they came within about
incentives help move slow-moving products, such as today’s 150,000 units of hitting 17 million.
sedans opposed to utility vehicles, “but it’s not the best The industry has been on a roll ever since, and although, yes,
solution long-term.” it will slow down this year, no one is building a bomb shelter.
So concerns loom as to how the industry will act and react to The annual NADA convention convenes in March. In addition
forecasted ebbing sales this year. to the usual business at hand, plenty of Las Vegas parties are
But the industry learned hard lessons from the times when planned. And there should be. There remains much to
celebrate.

February 2018 50