F A D A Journal - July 2018

President’s Message

Auto Sales Continues to Drive in Fast Lane on Account of
Low Base | CV Hits a New Peak of 8,56,000 Units

At F A D A, the mass movement has begun!

John K Paul, President pattern in sales, implying the trend was more broad-based
and industry-wide. India’s largest car maker, Maruti Suzuki,
Dear Dealer Colleagues, reported a 35% jump in sales in June at 1,43,181 units. Tata
According to a recent report from Deloitte, India’s low trade- Motors sold 62,019 vehicles last month, up 54%, YoY.
to-gross domestic product ratio, favorable demographics, I am excited to share that the mass movement at F A D A has
high commodity imports and pro-reform government will begun. After Vyapar Patna in June, we concluded Vyapar
shield it to a large extent should trade tensions escalate and Lucknow on July 18. It was heartening to see the dealer
lead to a global economic slowdown. The report also said participation for the event. This was a first of its kind event
that India has not reached its growth potential because the in the state of UP and I am sure that dealers who participated
working age population is still growing – relative to the reaped maximum benefits out of it as it allowed them to put
dependent population and the participation of women in the their concerns in front of the administration is a right way
labour force is low. The Nikkei India Purchasing managers’ and also gain knowledge on how the industry is progressing.
index for manufacturing — an indicator of industrial activity The 288th Council Meeting of F A D A was held during the day
— rose sharply to 53.1 in June, the strongest since December in the same venue. The Council deliberated on various issues
2017, supported by strong output and new orders in 2018. with special focus on the State of Uttar Pradesh.
The Indian household today is spending much more than Our next pit stop is Kolkata where we are organising Vyapar
what it used to spend a year back. Goods are moving out of Bengal – Rising East. It will happen on 20th Aug’18 at Hotel
retail outlets at a rapid speed. Companies are also borrowing The Lalit Great Eastern. I will request all our members from
more compared to a year back. After several months of rough East and North East to register for the event in large numbers
weather, the Indian economy appears poised to change gears and make the event a roaring success. I can guarantee that
after fully recovering from the twin jolts of demonetization there will be lots of sessions which will discuss how to
and GST. Auto showrooms have been reporting brisk activity, effectively manage one’s dealership may it be on financial
implying greater spending ability & growing income levels. side or on employee and customer side!
In June, passenger vehicle (PV) sales grew at its fastest pace F A D A recently took part in World Auto Forum’s 3rd India
in a decade, with domestic sales of 2,73,759 units, up 37.5 Vehicle Sales & Marketing Summit as an Industry Partner.
per cent over last year. Most auto brands reported similar Apart from giving an overview on the new Avatar of F A D A,
our speakers spoke on large number of issues including
Marketing & Selling Vehicles 20 years back and now, Challenges
& Opportunities in building Cult Brands and whether Auto
Brand is built or killed at dealership and best practices.
We continue to press for lowering the GST on used car
business and removing intra state E-Way bill for Auto Sector.
Apart from these two issues, as I write, F A D A is also in
process of taking up the issue on increase in permitted axle
load of heavy vehicles and tractor trailers allowing fleet
owners to carry more goods with the concerned ministry.
Please be rest assured that we will leave no stone unturned
for the benefit of our industry and our members at large.
With best wishes.
Yours sincerely,

John K Paul

fada.in | July 2018 F A D A Journal 5



Industry Track

Auto Market on Acceleration Mode

Vehicle sales continued to rebound powered by new offerings Commenting on the H1 Sales Rakesh Srivastava, Director -
and low base in the same month last year caused by the Sales and Mktg, HMIL said, ”Hyundai product portfolio is
Supreme Court mandating for adoption of BS IV vehicles and very young and youthful and is backed by industry No. 1
uncertainty over GST roll out. Customer Service, this has brought in strong acceptance of
The first quarter of 2018-19 ending with June, had auto sales Hyundai as modern premium brand with highest ever H1
across the board achieving double digit growth due to volume of 2,75,136 units, with a growth of 8.6% led by super
economic uptick led by improved industrial activity, robust performer brands Grand i10, new Elite i20, New 2018 Creta
demand in private consumption and government spending and Next Gen Verna.” HMIL’s exports too grew, notching up
on infrastructure. sales by 15.9% from 13,291 units in June 2017 to 15,408
Domestic sales including 2-wheelers, 3-wheelers, passenger units in June 2018.
vehicles and commercial vehicles grew by 25.23% to Passenger Vehicles Business Unit of Tata Motors recorded a
2,279,151 units in June 2018. Exports too were on a high- 56.8% jump in its total sales (including exports) of passenger
growth trajectory except for passenger vehicles that witnessed vehicles from 13,278 units in June 2017 to 20,823 units in
a tepid 9.12% slide in exports, which could be attributed to June 2018. Domestic sales of Tata passenger vehicles during
focus shifting on domestic market and also due to some issues June 2018 were 20,610 units, a 56.8% growth over 13,148
at some key international markets that curtailed shipments. units sold in the same month last year.
Passenger vehicles helped by buoyant sales of new offerings This was driven by continuous strong demand for Tiago, Tigor,
stayed on course with a robust growth of 37.54% in domestic Hexa and Nexon. June 2018 also saw the combined production
sales at 273,759 units. of Tiago and Tigor cross the important milestone of 200,000
Riding on low base and increased pace of economic activity units. Cumulative sales of PV in the domestic market for the
& freight movement, commercial vehicles continued their fiscal (April-June 2018) was at 52,937 units, a growth of 52%
good showing with domestic sales rising sharply by 41.72% compared to 34,858 units for the same period, last fiscal.
to 80,624 units from 56,890 units a year ago. The company’s exports at 213 vehicles in June 2018 registered
Two & Three-Wheelers too were in fast lane and maintained a 63.8% growth vis-a-vis 130 vehicles in June 2017.
their high-growth momentum. While 2-wheelers notched up Honda Cars India Ltd (HCIL) clocked a total domestic sale of
22.28% growth, 3-wheelers clocked a robust 55.89% increase 17,602 vehicles during June 2018 against 12,804 vehicles
y-o-y in domestic sales during June 2018. during the same month last year accruing 37.5% growth YoY.
Setting the pace, car market leader Maruti Suzuki India Ltd The recently launched All New Amaze saw a remarkable sale
(MSIL) sold a total of 143,181 vehicles in June 2018, including of 9,103 units in June’18, strongly contributing to company’s
9,145 units of export. This translated into a growth of 35.1% growth last month.
over the corresponding figure of 106,016 units in June 2017. The company registered a cumulative growth of 10.5% selling
Domestic sales of MSIL at 134,036 units in June 2018 were 42,609 units during the first quarter of FY18-19 (Apr-Jun’18),
also the highest ever-domestic sales in a month and grew by against 38,562 units in the corresponding period last year.
44% y-o-y. In the A- Compact segment, the sales grew by 76.7% HCIL also exported a total of 478 units in June 2018.
while in the A-Mini segment sales were 15.1% higher, as Rajesh Goel, SVP & Director, Mktg & Sales, HCIL, said, “The
compared to sales in June 2017. The B & C segment witnessed response to new Amaze has been excellent, giving boost to
a whopping 39.2% and 32.3% growth over June 2017. our June sales performance. We are thankful to our customers
Hyundai Motor India Ltd (HMIL), the country’s second largest for this response and continue to maximize Amaze production
car manufacturer and the largest passenger car exporter to meet the strong demand.”
continued to move up the growth curve. HMIL’s total sales Ford India’s combined domestic sales and exports in June
during June 2018 stood at 60,779 units as against 50,853 registered 18,830 vehicles, compared to 21,424 vehicles in
units in June 2017, reflecting a growth of 19.5%. HMIL’s June 2017 declining by 12.1%.
domestic sales, driven by the sustained demand for Grand The domestic operations in June recorded 25.2% increase
i10, New ELITE i20 and New 2018 Creta, surged by 20.8% to with 8,444 vehicles from 6,745 units in same month last year.
45,371 units during June 2018 from 37,562 units in the same The export, on the other hand, registered 10,386 vehicles
month last year. against 14,679 units in June 2017 drop by 29.2%.

fada.in | July 2018 F A D A Journal 7

Industry Track

“With one million domestic wholesale, Ford crossed a capital, in a market which operated on heavy discounting
significant milestone in June and proud to be the vehicle of and credit push.”
choice for One Million families,” said Anurag Mehrotra, VE Commercial Vehicles (VECV) also recorded positive growth
President and MD, Ford India. trajectory selling 5,496 units in the domestic market during
Toyota Kirloskar Motor (TKM) sold a total of 13,088 units in the month against 3,382 units sold in June 2017 securing
the domestic market during June 2018 against low base of 62.5% growth. The company also posted healthy sales
1,973 units during June 2017 owing to the uncertainty internationally recording 62.8% growth.
surrounding implementation of GST in July 2017. The Two-wheeler total sales at the end of the first quarter remained
company exported 1,034 units of the Etios series during the positive. The domestic sales in June 2018 at 1,867,884 units
month thus clocking a total of 14,122 units. The company surpassed June 2017 sales of 1,527,509 units rising by
registered 23% growth in the first half of 2018 from Jan –June 22.28%. Two-wheeler exports during the month also achieved
2018 as compared to the same period last year. 39.78% growth selling 280,160 units against 200,425 units
Commenting on the sales performance, N Raja, Deputy MD, sold a year ago.
TKM, said, “We have achieved triple digit growth this month Hero Motocorp, the world’s largest two-wheeler manufacturer,
as compared to June 2017 owing to last year’s GST scenario. yet again turned in a decent performance, posting an increase
The real scenario of June-July sales will be clear after July of 12.6% in domestic sales at 689,949 units in June 2018.
end compared to Jun –July 2017". The company’s exports at 16,293 units were also on course,
Mahindra and Mahindra (M&M) logged 14.7% growth in total rising by a healthy 41.5% from the year-ago figure of 11,516
sales in June 2018 which stood at 18,988 units against 16,554 units.
units sold in June 2017. The company achieved 18,092 units Bajaj Auto, having gained traction, was in top gear, the
of PV sales in domestic market, growing by 11.9% y-o-y during company’s domestic sales of two-wheelers leapfrogging by
June 2018. In the international market M&M sold 896 units 85.9% to 200,949 units and two-wheeler exports at 136,803
during June 2018, as against 384 units sold in June 2017. units witnessing a 41.7% surge during June 2018.
Nissan India and Renault India sales faltered by, 23.4% and Riding on high growth trajectory backed by expanding product
3% respectively in the domestic market. line-up, India Yamaha Motor posted a growth of 23.7%, selling
M&M’s domestic sales of commercial vehicles (LCVs) at 93,663 units in June 2018 as against 75,693 units in June
17,919 units and 3-wheeler sales at 4,323 units were very 2017. In domestic market, the company sold 68,377 units in
much on track, growing by 26.2% and 68.9% respectively. The June 2018 as compared to 60,462 units a year ago. The export
company also sold 1,310 units of M&HCVs in the domestic figure stood at 25,286 units in June 2018, while 15,231 units
market during the month, achieving 40.6% growth YoY. were exported in June 2017 which resulted in whopping 66%
Tata Motors’ sale of commercial vehicles in June 2018 in the growth YoY.
domestic market added up to 36,163 units, rising by 52.5% Chennai-based TVS Motor Company vroomed by 7.7% with
compared to 23,706 vehicles sold in June last year. LCV sales its domestic sales of 246,176 two-wheelers during June 2018
at 21,124 units clocked a growth of 48.9%, while M&HCV as against the domestic sales figure of 228,518 two-wheelers
sales aggregating 15,039 units, climbed up by 57.9% y-o-y. in June 2017. The company’s two-wheeler exports too
The company also sold 5,033 units in international market witnessed a quantum jump to 55,025 units in June 2018 from
achieving 49.2% growth over the same month last year. the export of 40,120 units recorded a year earlier.
Ashok Leyland domestic MHCV volumes grew by 21.6% selling Likewise, Honda Motorcycle & Scooter India (HMSI) and Suzuki
9,616 units against 7,909 units sold in June 2017. On the Motorcycle saw a healthy growth of 28.6% and 39.2%
export front too, the company clocked sales of 1,642 units respectively in domestic sales during the month of June 2018.
which resulted in 26.7% growth YoY. The LCV and Bus business Auto market has clocked healthy growth numbers in the first
of the company have also posted very good growth. CV Exports quarter of the current financial year. However, going forward,
also grew by 25.7%. the market outlook is very positive, thanks to the early arrival
Vinod K Dasari, MD, Ashok Leyland, said “The Total Industry of monsoon across India with prospects of abundant rains,
Volume registered 84% growth primarily driven by surge in should help rural wealth and augment spending bringing cheer
infrastructure spend resulting in higher sale of Tipper and to the auto industry over the next few months
MAVs. There was also the impact of base effect. We continued
our focus on profitable growth and tight control on working

8 F A D A Journal July 2018 | fada.in

India Economics

Core Inflation and CPI Rises,
WPI Inflation at 4.5 Years High

CPI inflation increases

CPI inflation for June was 5%, 10bps higher than May and at WPI witnessed a growth of 4.43 percent in May and 0.90
a 5-month high. A contained spike in vegetables led to softer percent in June 2017. Fuel and power inflation, which has a
than expected food inflation. The recent MSP hike in rice will weightage of 13.15%in WPI, grew at 16.18% in June from
lift food inflation, however international food prices, 11.22 percent in May. Petrol prices are up 17.45%in June
especially of oilseeds, corn, etc. are under pressure in the from 13.90 in May, while diesel prices grew 21.63% in June
wake of heightened tensions in global trade. What also as compared to 17.34% in May. A higher inflation for the
remains to be seen is whether the Central Government takes month of June keeps the chances alive of a further rate hike
specific measures to make MSP hikes effective in crops other in the month August, according to economists. The RBI
than rice. Historically, MSPs have been efficacious in case of governor headed Monetary Policy Committee will be meeting
rice and wheat only. later this month to review interest rate regime.

Core CPI rises Inflation likely to moderate

Core inflation rose for another month to 6.45%. By component, Headline inflation may start moderating over the next couple
health and education inflation picked up, mainly due to the of months owing to the base effect in both headline and core
base effect. The rise in core inflation in recent months does inflation. As regards the monetary policy, analysts believe
not look to be reflective of strong demand conditions and that domestic demand conditions do not suggest businesses
pricing power, but of a low base (temporary loss of pricing have pricing power as of now and therefore RBI would rather
power in the six-month period post-demonetisation) and
input price pass-through. Rural inflation (5.00%) has again
grown faster than urban inflation (4.85%).

June WPI inflation at 4.5 years high, grew 5.77% not hurry to raise rates further based on domestic
macroeconomic considerations. However, if the balance of
India's wholesale inflation grew 5.77 percent in June, a four payments continue to deteriorate and the pressure on INR
and half year high, driven by some food items and fuel prices. intensifies, the probability of rate hikes may increase.

fada.in | July 2018 F A D A Journal 9

India Economics

IIP Grew by 3.2% in May’18 growth of 4.3% while consumer non-durables exhibited
negative growth of 2.6%. Out of 23 industry groups in the
The Index of Industrial Production (IIP) grew by 3.2% in manufacturing sector, 13 have shown positive growth during
May’18, compared to a revised 4.8% in Apr’18. Low growth in May’18 as compared to the corresponding month of the
Manufacturing (2.8%) dragged the industrial performance. previous year.
Meanwhile, Mining and Electricity grew by 5.7% and 4.2% Auto components and two-wheelers have also decelerated,
respectively in May’18. As per use based classification, nevertheless they continue to grow in double digits. In the
capital goods grew by 7.6%, Primary goods by 5.7%, capital goods industries, commercial vehicles continue to
Intermediate goods by 0.9% and Infrastructure/ Construction show robust growth
goods by 4.9%. The Consumer durables have recorded a

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Dealership Profitability

Are You Ready When the Phone Rings?

If your team’s phone skills have faded in the Digital Age, you may be losing opportunities. Map out the road
to the appointment and make sure no sales call goes unanswered.

Tony Troussov, Director of Training for Automotive Development Group (ADG)

You arrive at your dealership. Your lot looks beautiful. The visitor picks up the phone, hoping for a direct answer. And by
inventory stands tall. Your brand-new facility is spectacular. the way, don’t think for the moment that, just because you
Your new responsive website is amazing. You paid top dollars installed a BDC, your problems will magically disappear.
for search engine optimization and a tangible digital Online shoppers are three times as likely to contact the
presence. You feel proud. dealership by phone than by email or chat. Phone calls are
outpacing e-leads by a staggering four-to-one margin!

We can’t be too surprised. After all, more car buyers are
doing research on their smartphones. It’s easy to click the
“Call” button. How your team handles phone conversations
will determine the success of your online presence, and a
large portion of your success hinges on your ability to deliver
a “high-touch” experience when an in-market shopper
contacts the store.

You walk into the building and hear a receptionist paging the If you can, you will certainly stand out from the competition.
sales department to answer a phone call. You look over at the A study by Marchex Institute came to the following rather
bullpen in hopes that your best salesperson answers, but, to alarming conclusions:
your disappointment, he asks the receptionist to take a • 20% of all calls to dealerships during business hours
message. Or maybe a green pea raises his hand. Or maybe,
even worse, the page is met with deafening silence. went unanswered,
Sales calls are a precious commodity and should be treated • 53% of answered calls were from shoppers with detailed
as such. If you and your team are not ready when the phone
rings, you will continue to miss real opportunities for inquiries who demonstrated an intent to buy,
appointments and sales. Let’s take a closer look at why the • 23% of phone calls were questions about inventory,
phone deserves your full attention — even in the Digital Age
— and how to improve the way your managers handle these hours and directions,
leads. • 19% of callers asked about vehicles not offered by the
Buyer Preferences
dealer and
• The remaining 4% were calls confirming appointments

and completed transactions.

It gets worse. Hundreds of secret-shopper calls by Best Mark
revealed the sad reality of dealership phone responses:

• 80% of sales people did not ask for caller’s name and
did not provide theirs,

Consumers are shopping online at a higher rate than ever • 89% of sales people did not set a solid appointment,
before. In addition, according to a Google/Polk study of recent • 91% of sales people attempted to sell a car over the
car buyers, their decision time is shrinking: 81% of
respondents decided to buy within three months of beginning phone rather than setting an appointment and
their online research. With 58% of those buyers buying within • A staggering 95% of sales people did not use a defined
one month, the competition and urgency have never been
greater. road to an appointment and simply winged it.
You have been focusing on building your online presence Combine all of the above with another Google study that
and all the technology that goes with it. It all sounds found only 20% of car buyers start by shopping the brand
wonderful, and it works — right up until the moment a Web they will ultimately buy. That means any dealer has a chance
of capturing the business.

fada.in | July 2018 F A D A Journal 13

Dealership Profitability

Strange Behaviour the phone, there’s a reason. To respond properly, be sure the
Understanding consumer behaviour is an important part of following pieces are in place:
designing your process. But let’s face it: consumer behaviour • An established phone call process and script,
can be tricky, and it constantly changes as their journey is • A clear, consistent road to the appointment,
interrupted by technology and other variables. All we know • The ability to record and monitor calls for quality
for sure is that the “high-touch” experience will always be a
positive, no matter how much technology evolves. control,
The first thing that must change is an understanding of the • The ability to track opportunities, appointments set,
desired outcome of an incoming phone call: an appointment.
When it comes to handling incoming phone calls, most appointments sold and units sold, both for eleads and
dealerships are in reactive mode. Very few callers intend, so phone leads and
set an appointment when they pick up the phone, and if they • An appointed “coach” to lead your training efforts.
aren’t asked to, they probably won’t. Dispensing with this When the phone rings, will you be ready? Will your people
passive mindset is your No. 1 priority. be ready? In a competitive environment, the collective phone
You know that shoppers are heavily cross-shopping brands skills of your team are critical to success. The good news is
and dealerships. They enter the competitive market with an that, unlike some new sales tools, everyone in your dealership
open mind. They take the time to compare vehicles, dealers has been using a phone their entire lives. They just need to
and prices in an ever-expanding radius. When they pick up get a little better at answering it.

Govt. Notification

Ministry of Road Transport and Highways

Notification dated 16th July, 2018

S.O. 3467(E).—In exercise of the powers conferred by sub-section (1) of section 58 of the Motor Vehicles Act, 1988 (59 of 1988), and in
supersession of the notification of the Government of India in the erstwhile Ministry of Surface Transport (Transport Wing), number S.O.
728(E) dated the 18th October, 1996, the Central Government hereby notifies the maximum safe axle weight of each axle type in relation
to the transport vehicles (other than motor cabs), having regard to the size, nature and number of tyres, as under :-

Sl. No. Axle Type Maximum Safe Axle Weight Maximum Safe
Axle Weight
1. Single Axle
1.1 Single Axle with single Tyre 3.0 tonnes
1.2 Single Axle with two Tyres 7.5 tonnes
1.3 Single Axle with four Tyres 11.5 tonnes*
2. Tandem Axles (Two axles) (where the distance between two axles is less than 1.8 Mtr.)
2.1 Tandem axle for rigid vehicles, trailers and semi-trailers 21 tonnes*
2.2 Tandem axle for Puller tractors for hydraulic and pneumatic trailers 28.5 tonnes
3. Tri–axles (Three axles) (where the distance between outer axles is less than 3 Mtr.)
3.1 Tri-axle for rigid vehicles, trailers and semi-trailers 27 tonnes*
4. Axle Row (two axles with four tyres each) in Modular Hydraulic trailers 18 tonnes

(9 tonnes load shall be permissible for single axle)
* Note: If the vehicle is fitted with pneumatic suspension, 1 tonne extra load is permitted for each axle.

2. The gross vehicle weight (GVW) shall not exceed the total permissible safe axle weight as above and in no case shall exceed- (i) 49 tonnes
in case of rigid vehicles; and (ii) 55 tonnes in case of semi-articulated trailers and truck-trailers except modular hydraulic trailers.

3. Modular hydraulic trailers can carry goods of indivisible nature of any load subject to the regulatory approvals as may be required.
Explanation - For the purposes of this notification, tolerance upto five per cent. in the gross vehicle weight shall be allowed for the purpose
of compliance to sub-section (3) of section 113 of the Motor Vehicles Act, 1988 (59 of 1988).
[F. No. RT-11028/11/2017-MVL]
ABHAY DAMLE, Jt. Secy.

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F A D A News

Vyapar Lucknow : Opportunities Unlimited

After immensely successful previous Vyapar’s in New Delhi; the twin-problem of deteriorating environment and road
Mumbai; and Patna, Lucknow was the fourth destination safety. She highlighted on the RTO related problems being
where this event was held, where we witnessed the expanse faced by the dealers in the State and called upon all
of established businessmen and women representing the stakeholders, including the Government, industry, trade,
State of Uttar Pradesh and from other parts of the country NGOs and experts, to join hands and lay down a clear roadmap
come together under one roof. The evening brought together to achieve the objectives of clean environment, safe motoring
entrepreneurs, who own and operate the Automotive Retail and ease in conducting business.
business for passenger vehicle, two-wheelers and commercial Speaking as Chief Guest on the occasion, Mr Swatantra Dev
vehicle manufacturers. Singh, Hon’ble Minister of State (Independent Charge),
Transport & Protocol, Govt of UP welcomed the suggestions
for improving and streamlining the licensing and registration
of vehicles by the Transport Department. He also welcomed
the offer from automobile dealers to carry out a campaign
on clean environment, traffic discipline and road safety and
to set up Driver Training Schools in the state, jointly with the
Government of Uttar Pradesh.

It was also for the first time that F A D A held this conference The Hon’ble Transport Minister instructed to be notified about
at such a large scale which was deeply focused for the State any out of pocket expenses to be paid at RTOs and requested
of Uttar Pradesh, in the city of Nawab’s! for cooperation of the Dealer fraternity to ensure corruption
To be a part of the change and brace the situation upfront free process.
was the message that came out loud and clear from the The entire Transport team from Principal Secretary to the
deliberations at Vyapar Lucknow organised by Federation of Transport Commissioner and the IT cell of DoT, UP graced
Automobile Dealers Associations (F A D A) on July 18, 2018 at the occasion. Their attitude was very positive and extremely
Hotel Fairfield by Marriot in Lucknow. sensitive to Dealership issues. Pain points raised by the
Ms Veena Agarwal, Chairperson, F A D A UP welcoming all to participants were discussed and immediate solutions were
Vyapar Lucknow emphasised on holistic approach to tackle proposed.
Echoing the views of the Hon’ble Minister, the Guest of Honour
– Ms Aradhana Shukla IAS, Principal Secretary, Department
of Transport, Govt of Uttar Pradesh, invited the team of
F A D A UP Chapter members for further discussions to draw
up collaborative efforts in improving environment, road safety
and driver training.

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F A D A News

Speaking earlier on the occasion, Mr John K Paul, which would help improve traffic discipline, environment &
President, F A D A said, “The challenges notwithstanding, road safety, and to simplify the vehicle registration and
the Indian automobile market offers a tremendous licensing procedures in the State of UP. It was also an
opportunity. I feel that there is no reason why we should opportunity for the State Government to get an insight into
not be able to surmount these challenges if a concerted the policies and practices followed in other States.
effort is made by all stakeholders, including the The Panel on Auto – Next Decade was moderated by Mr
Government, manufacturers, dealers, NGOs, R&D Mohit Arora, Partner at Mondriaan Group. The other
institutions and vehicle users. I would like to assure that panellists included Mr Arun Malhotra, Former MD, Nissan
F A D A remains committed to play its part. F A D A and its Motors; and Mr. Nikunj Sanghi, Past President, F A D A and
members are willing to work with the Government, President ASDC; and Mr Rajneesh Agarwal, Regional Director,
manufacturers and other stakeholders to improve F A D A UP (Central). The Panel discussed the way forward to
environment, road safety and to undertake drivers’ training the next generation.
as well as manpower training in the interest of sustained
growth of the economy and auto market.”
A galaxy of eminent speakers representing the Government,
industry, auto retail trade and academia participated at the
Vyapar Lucknow. The deliberations centred on the theme:
“Opportunities Unlimited”.

Around 100-120 automobile dealers, including Council The motivational session by Ms Arunima Sinha, first woman
Members of F A D A from other States attended the half a day amputee to have climbed Mt. Everest, was really inspiring
programme. Besides automobile dealers, the State and encouraging. She shared that her determination,
authorities, representing various departments, graced the commitment and perseverance not only enabled her to achieve
occasion. The representatives of OEMs, allied businesses her goal but had given her a mission to use her success to
and media were also present in good numbers. encourage the person in front of her.
The highlights of the programme of Vyapar Lucknow were the In view of the growing presence and influence of digitisation,
two Panel Discussions: One Panel was on State RTO & Auto Mr Kshitij Saxena, Co-Founder & CEO, Autoninja made a
Retail- Jugalbandi and the other panel was on Auto – Next presentation on running a data driven dealership & improving
Decade. the efficiency and bottomlines in dealership management.
The Panel on ‘State RTO & Auto Retail - Jugalbandi’ interacted
with Mr P Guru Prasad IAS, Transport Commissioner, DoT, UP.
Mr Manish Raj Singhania, Hony. Treasurer, F A D A moderated
the session. Other panellists included Ms Veena Agarwal;
and Mr Harsh Mohan, Director, Prayag Udgyog. The objective
of the interaction was to bring forth suggestions and ideas,

fada.in | July 2018 F A D A Journal 17

F A D A News

The conference also gave an opportunity to F A D A UP Chapter department would be taking with regard to road safety and
to recognise and honour F A D A Council Members attending registration of vehicles in the State.
Vyapar Lucknow. The Hon’ble Transport Minister (Ind. Charge), The half a day programme concluding with cocktails and
UP presented the plaques to Mr R C Rodrigues, Mr Bharat dinner was not only exciting but also enriching experience
Chordia, Mr Vinay Nevatia, Mr Amit Manaktala, Mr Rajendra for the automobile dealers and others connected with
Prasad Agarwal and Mr Anil Jhunjhunwala for their singular automotive business.
contribution to the growth and development of auto retail
business. 288th Council Meeting of F A D A
All the esteemed sponsors viz. YES Bank, ICICI Lombard
General Insurance Co., Autoninja, Castrol India, Mahindra Dovetailed with Vyapar Lucknow, F A D A held its 288th Council
Insurance Brokers and Motor & General Sales at Vyapar Meeting in the same venue in the morning of July 18, 2018.
Lucknow were felicited for their support in making Vyapar While the Council deliberated on various issues related to
a huge sucess in the city of Nawabs. F A D A UP Council the auto retail industry, special focus was on the issues
members were felicitated for their contribution in getting: affecting the dealerships in the State of Uttar Pradesh.
The month of July 2018 witnessed the highest life membership
applications for joining F A D A since January 2018 and Vyapar
Lucknow saw paid registrations, which was by far the highest
in comparison to Vyapar’s held in Delhi, Mumbai and Patna.
This was thanks to all out support provided by F A D A UP
Chapter.

1) Highest Membership: Mr Sanskar Gupta Council was also informed about the initiative F A D A was
2) Highest Sponsorship: Mr Ankit Raj Gupta taking keeping the interest of dealer community in mind. These
3) Highest Registration: Mr Rajneesh Agarwal. included F A D A Mobile App being developed which included
revamp of F A D A website, F A D A Academy Courses, Regional
The program started with Press briefing by Mr Vinkesh Gulati, Summit and F A D A Awards; and on CSR activities.
Hony. Secretary, F A D A and Ms Veena Agarwal, Chairperson, F A D A was not only addressing the twin issue of reducing GST
F A D A UP. Followed by Hon’ble Transport Minister replying on Used Car and exeption of automobile sector from Intra-
to the questions raised by the Media on actions his State E-Way Bill generation at the Centre but also was persuing
the same at the State level through F A D A State Chapters,
Council was informed.
Council was advised that the F A D A’s 54th Annual General
Meeting and Annual Session to be held in Nagpur, the
planning for the same was in progress and the programme
and other details would be shared once the same was
finalised

18 F A D A Journal July 2018 | fada.in











Know Our Member

Maverick Motors, Madurai

Maverick Motors, Madurai a new life member of F A D A was This has been the reason behind the growth of the organisation
established in 2017 by K Siva Ramanan. Maverick Motors in such a short span and soon the dealership plans to open
located at 200/1 A3, Airport Road, Near Burma Colony, two new showroom touch points within FY19 for convenience
Madurai is an exclusive Skoda dealership engaged in the of its customers.
sale, service, repair, and genuine spares and accessories of
Skoda cars.

The journey began in the year 2012 when Siva Ramanan &
his brother Arun Kumar opened their first dealership - Aura
Motors, a 3 S dealership of Skoda Motors in Tirunelveli &
in 2017 Maverick Motors was opened in Madurai.

The dealerships provide their customers 24-hour service and K Siva Ramanan is the man steering Maverick Motors. After
provide parts status for the parts ordered for their vehicles, completing his masters in Software Engineering from Tamil
through SMS/WhatsApp on alternate days. While Maverick Nadu & International Management from Oxford, he held
Motors being only 6 months old sold ~150 cars; Auro Motors management position at M&S Money & Argos, UK. Though
sold ~2000 cars and around 3600 cars were serviced by each new to automobile retail field, he with his dedication and
outlet. The dealership has a turnover of Rs. 580 lakh and perseverance took up the challenges head on and with the
expects to double it in near future. Both the dealerships support of experienced and capable team has been able to
together have a dedicated workforce of approximately 130 carve out a niche for himself and his dealership in the
employees. industry. Through their combined efforts, of providing reliable
Maverick Motors is an ideal choice for those looking for and high quality service, Maverick Motors has become a
reliable Skoda dealership. The dealership offers a wide range trusted destination for its customers.
of services all of which are backed with good quality work F A D A wishes K Siva Ramanan, Arun Kumar and their Team
and friendly & efficient service. The dealerships motto is All the Very Best in all their Endeavours!
customer service and satisfaction.
It offers 5 car displays at its world-class showroom, a cosy
ambience to its customers and provides facilities, utilities,
and culture that drive customer satisfaction. The showroom
and the workshop are equipped with the state-of-the-art
gadgets, fixtures, machinery and tools and separate lounge
keeping customer satisfaction & comfort in mind.

24 F A D A Journal July 2018 | fada.in

Membership

We Welcome Our New Members

Annual Members

No. Dealer Principal Name Dealership Name City State Franchise

1 Mr Manreet Singh Libra Libra Automotives Pvt Ltd New Delhi Delhi BMW India

2 Mr Abdu Rahiman Peringhat Motors Aluva Kerala Yamaha

3 Mr Joshy A Chemparathy Josh Motors Alappuzha Kerala Force Motors

4 Mr U Vishal Kumar Lodha Motors Chennai Ta m i l n a d u HMSI

5 Mr Kulbir Singh Kohli Tirlok Singh & Co. Lucknow Uttar Pradesh TVS Motors

Life Members

6 Mr Y Chandra Sekhar Sri Ranga Motors V izianagaram Andhra Pradesh Mahindra Tractor

7 Mr Srinivas Thatavarty Varahi Motors Te n a l i Andhra Pradesh Bajaj Auto

8 Mr Avinash Kumar APR Automobiles Pvt Ltd Gaya Bihar M&M

9 Mr Abhishek Shandilya Hari Om Sri Automobiles Pvt Ltd Sitamarhi Bihar TVS Motor

10 Mr Vipin Mirani Rainbow Automotive Pvt Ltd Raipur Chhattisgarh TVS Motor

11 Ms Devki Nanda Cargo Motors Pvt Ltd Gandhidham Gujarat HMSI

12 CA Pranav Shah Innovative Motors Pvt Ltd Ahmedabad Gujarat HMSI

13 Mr Pradumansinh Jadeja President Motors Surat Gujarat M&M

14 Mr Akshay Malik Malik Automotives Pvt Ltd Hissar Haryana Toyota

15 Mr Pankaj Sehgal Sehgal Automobiles Faridabad Haryana Hero

16 Mr V ishal Anand Anand Autocare Pvt Ltd Solan Himachal Pradesh Toyota

17 Mr Rajeev Kataruka Basudeb Engg Enterprises Ltd Ranchi Jharkhand Honda Cars

18 Mr Karna Parikh Fairdeal Automobiles Pvt Ltd Jamshedpur Jharkhand Hyundai

19 Mr Kunal Himatsingka Himatsingka Next LLP Dhanbad Jharkhand Ashok Leyland

20 Mr N P Singh Kwality Tractors & Automobiles Ranchi Jharkhand Piaggio Vehicles

21 Mr Kishan N Parikh Pebco Motors Jamshedpur Jharkhand Maruti Suzuki

22 Mr Mohit Poddar Premsons & Poddars Trucking Co LLP Ranchi Jharkhand Ashok Leyland

23 MR Rajesh Kr Choudhary Rama Auto Dealers Pvt Ltd Ranchi Jharkhand Hyundai

24 Mr Rajesh Kr Choudhary Shyama Automobiles Ranchi Jharkhand Hero

25 Mr Aroor Arjun Rao Supreme Auto Dealers P Ltd Mangaluru Karnataka Bajaj

26 Mr Francis K Paul Popular Vehicles & Services P Ltd Cochin Kerala Maruti Suzuki

27 Mr Ashok Harry Pothen Pothen Motors Pvt Ltd Trivandrum Kerala Hyundai

28 Mr Sibi Mathai V ista Driveline Motors (P) Ltd Alappuzha Kerala Volvo T&B

29 Mr Rohit Khatwani Khatwani Sales & Services P Ltd Jabalpur Madhya Pradesh HMSI

fada.in | July 2018 F A D A Journal 25

Membership

No. Dealer Principal Name Dealership Name City State Franchise

30 Mr Ashish Pande Om Auto & Sons Bhopal Madhya Pradesh HMSI

31 Mr Harshil Choksey Autobahn Enterprises P Ltd Mumbai Maharashtra Skoda

32 Mr Abhinandan Bhansali Bhansali Enterprises Ahmednagar Maharashtra TVS Motors

33 Ms Pooja Choudhary Infinity Cars Pvt Ltd Mumbai Maharashtra BMW India

34 Mr Gaurav Ghatge KGP Auto Ltd Pune Maharashtra BharatBenz Trucks

35 Mr Satish V Ghatge Mohan Auto Industries Pvt Ltd Kolhapur Maharashtra Hyundai

36 Mr P Radhakrishnan J Kay Aautomobile Puducherry Puducherry TVS Motor

37 Mr Devender Singh Rana Pathankot Vehicleades P Ltd Pathankot Punjab Maruti Suzuki

38 Mr Bharat Saneja Surya Motors Abohar Punjab Hero

39 Mr Subhash C Gehlot Audi Motors Ltd Bikaner Rajasthan Maruti Suzuki

40 Mr V ikas Shrimali Daksh Auto (India) Pvt Ltd Udaipur Rajasthan Mahindra T&B

41 Mr Yogesh Moondra Shakun Motors Pvt Ltd Jodhpur Rajasthan Volkswagen

42 Mr Pramod Dalmia Sikkim Motors Gangtok Sikkim M&M

43 Mr Satish Kumar Mehta JMB Motors Chennai Ta m i l n a d u India Kawasaki

44 Mr K Siva Ramanan Maverick Motors Madurai Ta m i l n a d u Skoda Auto

45 Mr Vinoth Kumar Jain Mutha Motors Sunguvarchatram Tamilnadu TVS Motor

46 Mr P Sathish Kumar R P Motors Chennai Ta m i l n a d u TVS Motor

47 Mr R Karuppan Chetty Rathanagiri Tractors Thiruvallur Ta m i l n a d u John Deere Tractor

48 Mr M Vignesh Rockfort Motohub Pvt Ltd Trichy Ta m i l n a d u HMSI

49 Mr Ajith Kumar G Vardhaman Motors Guduvanchery Tamilnadu Ya m a h a

50 Mr Alete Srinivas Reddy Headway Motors Hyderabad Te l a n g a n a Royal Enfield

51 Mr Anand Kumar Singh Ananad Wheelers Pvt Ltd Barabanki Uttar Pradesh HMSI

52 Mr Ram Mohan Kapoor Manoram Autos Agra Uttar Pradesh Bajaj Auto 3W

53 Mr Rajeshwar Singh Shivani Motors Allahabad Uttar Pradesh Hero

54 Mr Ravi Bhadra Singh Jai Automobiles Ambedkarnagar Uttar Pradesh Hero

55 Mr Arun Gupta Commercial Motor Sales P Ltd Bareilly Uttar Pradesh Toyota

56 Mr Prem Agarwal Sushil Automobiles Basti Uttar Pradesh Hero

57 Mr Rohit Chhaparia Ganpati Automobiles Deoria Uttar Pradesh Hero

58 Mr Amar K Sood Rishi Auto Sales Pvt Ltd Faizabad Uttar Pradesh Ashok Leyland

59 Mr Gaurav Singh Shree Dev Wheels Pvt Ltd Gonda Uttar Pradesh Tata Motors Ltd

60 Mr Ashish Agarwal MAK Bikes LLP Gorakhpur Uttar Pradesh Royal Enfield

61 Mr Rupesh Matanhelia Navya Motors Gorakhpur Uttar Pradesh Hero

62 Mr Vikrum Saraf Smartwheels Pvt Ltd Gorakhpur Uttar Pradesh Maruti Suzuki

26 F A D A Journal July 2018 | fada.in

Membership

No. Dealer Principal Name Dealership Name City State Franchise
63 Mr Mahendra K Agrawal KTL Pvt Limited Kanpur Uttar Pradesh Maruti Suzuki
64 Mr Aditya Garg Icon Cars Pvt Ltd Lucknow Uttar Pradesh Honda Cars
65 Mr Aditya Agarwal JP Motors Pvt Ltd Lucknow Uttar Pradesh HMSI
66 Mr Mudit Narain K N Motors Pvt Ltd Lucknow Uttar Pradesh Ford
67 Mr Gunjan Jain Lucknow Diesels & Electricals Lucknow Uttar Pradesh Royal Enfield
68 Mr Ashish Agarwal M G Chariots Pvt Ltd Lucknow Uttar Pradesh Renault
69 Mr Rohit Gupta R S Automobiles Lucknow Uttar Pradesh Hero
70 Mr Piyush Agarwal SRM Motors Pvt Ltd Lucknow Uttar Pradesh Tata Motors
71 Mr Mohit Bakshi P 5 Motors Lucknow Uttar Pradesh Hero
72 Mr Pratik Jain Jain Motorcycle Company Mathura Uttar Pradesh Hero
73 Mr Shailendra Mishra JP Automobiles Mau Uttar Pradesh Hero
74 Mr Gopal Kapoor Jawahar Motors Moradabad Uttar Pradesh Hero
75 Mr Ashish Gupta Raayna Enterprises Pvt Ltd Muzaffarnagar Uttar Pradesh HMSI
76 Mr Ajay Kumar Gupta Gupta Automobiles Padrauna Uttar Pradesh Hero
77 Mr Manoj Kumar Singh Janta Trading Company Pratapgarh Uttar Pradesh Hero
78 Mr Ashutosh Yadav Naresh Automobiles Raibarielly Uttar Pradesh Hero
79 Mr V ishal Singh Vishal Motors Unnao Uttar Pradesh Hero
80 Mr Rahul Goenka Goenka Motors Pvt Ltd Varanasi Uttar Pradesh Toyoto
81 Mr Prabhash Mishra Puneet Automobiles Pvt Ltd Varanasi Uttar Pradesh Tata Motors
82 Mr Sumit Goyal Anand Automobiles Jalpaiguri West Bengal Hero
83 Mr Narendra C Garg Beekay Auto Corp Pvt Ltd Siliguri West Bengal Hero
84 Mr S M Kumbhat Darjeeling Automobile (P) Ltd Siliguri West Bengal Hero
85 Mr Vinod Kumar Dugar Dugar Automotives Pvt Ltd Kolkata West Bengal HMSI
86 Mr Paban K Agarwala Gita Motors Balurghat West Bengal HMSI
87 Mr J P Kedia K B Motors Pvt Ltd Kolkata West Bengal Tata Motors
88 Mr Pradip K Agarwal Kaysons Automotive Pvt Ltd Siliguri West Bengal HMSI
89 Mr V ikram Sharma Mehi Motors Pvt Ltd Malda West Bengal HMSI
90 Mr Pradip Singhal Narayani Auto Centre Pvt Ltd Malda West Bengal HMSI
91 Mr Ronak Kejriwal Nordustra Motorsports LLP Siliguri West Bengal Suzuki Motorcycle
92 Mr Rajib K Sah S P Automobile Purulia West Bengal HMSI
93 Mr Nikunj Sanwaria Sanwaria Automobiles P Ltd Kolkata West Bengal Volvo Cars
94 Mr Rakesh Bansal Shanti Motors Siliguri West Bengal HMSI
95 Mr Aman Bansal Shree Automobiles Siliguri West Bengal Piaggio Vehicle

fada.in | July 2018 F A D A Journal 27

GST Updates

Important Recommendations Proposed by GST Council

In terms of the Press Release issued by the Government of employer to provide to its employees, under any
India ahead of the GST Council meeting held on the 21st July, law for the time being in force.
please find below a brief note on the important 1.9. GST Credit reversal when payment not made to the
recommendations made by the Council: vendor within 180 days to be done without payment of
interest.
I. MAJOR RECOMMENDATIONS 1.10. Consolidate credit note/debit note may be issued for
1.1. Turnover limit for opting composition scheme is invoices issued in a Financial Year.
1.11. Commissioner empowered to increase the time limit
proposed to be increased to 1.5 crore from Rs 1 crore. for return of inputs and capital sent on job work, upto
1.2. Composition dealers can supply services for a value a period of one year and two years, respectively.
1.12. Supply of services to qualify as exports, even if
not exceeding 10% of the turnover in the preceding payment is received in Indian Rupees, where permitted
financial year or Rs. 5 lakh whichever is higher. by the RBI.
1.3. Reverse charge applicable on registered person for 1.13. Place of supply in case of job work of any treatment or
supplies received from unregistered vendors to be process done on goods temporarily imported into India
applicable only for specified goods and in case of and then exported without putting them to any other
certain notified classes. use in India, to be outside India.
1.4. The threshold exemption limit for registration in the 1.14. Rationalization of cross utilization of input tax credit.
States of Assam, Arunachal Pradesh, Himachal
Pradesh, Meghalaya, Sikkim and Uttarakhand to be II. RETURNS
increased to Rs. 20 Lakh from Rs. 10 Lakh. 1.1. The GST council has approved a simple return with
1.5. Mandatory registration required only for E-commerce
operators collecting tax at source. two main tables. One for reporting outward supplies
1.6. Registration to remain temporarily suspended while and one for availing input tax credit based on invoices
cancellation of registration is under process, so that uploaded by the supplier. Invoices can be uploaded
the taxpayer is relieved of continued compliance under continuously by the seller and can be continuously
the law. viewed and locked by the buyer for availing input tax
1.7. The following supplies to be added in Schedule-III credit. Accordingly the system of matching still
prescribing transactions which are neither supply of remains, however the same is simplified to make it
goods nor supply of service. user-friendly for the tax payers.
a. Supply of goods from a place in the non-taxable 1.2. The Council approved quarterly filing of return for the
small taxpayers having turnover below Rs. 5 Cr as an
territory to another place in the non-taxable optional facility.However,monthlypayments shall continue.
territory without such goods entering into India; 1.3. NIL return filers (no purchase and no sale) shall be
b. Supply of warehoused goods to any person before given facility to file return by sending SMS.
clearance for home consumption; and 1.4. Further, the council has also proposed an amendment
c. Supply of goods in case of high sea sales. return with an option of payment of tax so that the
1.8. Benefit of input tax credit to be extended to the interest liability of the tax payers is saved.
following: Further the changes recommended are with a view to
(a) Activities prescribed in Schedule III prescribing provide benefits to the important sectors of the
transactions which are neither supply of goods economy viz. Agriculture, Education, Social Security etc.
nor services. 1. Agriculture and Food Processing
(b) Motor vehicles used for transportation of
passengers having seating capacity of more than Exemption is proposed to be extended to the
13 including the driver. following:
(c) Motor vehicle used for transportation of money 1.1. Warehousing of minor forest produce in line with
by banking company or financial inst. exemption granted to agricultural produce.
(d) Goods or services which are obligatory for an

28 F A D A Journal July 2018 | fada.in

GST Updates

1.2. Works of installation and commissioning 4. Other Recommendations
undertaken by DISCOMS/electricity distribution 4.1. Exemption to services supplied by an
companies for extending electricity distribution
network upto the tubewell of the farmer/ establishment in India to any establishment of
agriculturist for agricultural produce. that person outside India which is a distinct
person under the law. The exemption is granted
2. Education provided the place of supply is outside India.
2.1. GST on E-books reduced to 5% from 18%. 4.2. GST rate of 12% with full ITC under forward charge
2.2. Supply of services by State & Central educational for composite supply of multimodal
transportation.
boards to students for conduct of examination to 4.3. Rationalization of rates on a composite
be clarified to be exempt. supply of food and drinks in a restaurant,
3. Social Security and Senior Citizens mess or eating joint on a contractual basis
3.1. Exemption proposed to be provided to GST on and also clarifying that scope of outdoor
administrative fee collected by National Pension catering is restricted to supplies in case of
System Trust. outdoor/indoor functions that are event
3.2. Exemption is proposed to be provided by an based and occasional.
unincorporated body or a non-profit entity registered 4.4. The term “renting of immovable property” to be
under any law engaged in the activity relating to defined.
welfare of industrial, agricultural labour or farmer 4.5. Exemption granted on outward transportation of
or for promotion of trade, commerce, industry, all goods by air and sea to be extended for another
agriculture, art, science, culture etc. to own members year i.e. upto 30.09.2019 for the benefit of
against consideration in the form of membership exporters.
fee upto Rs 1000/- per member per year.

Note: It should be noted that the above are the major changes proposed by the GST council.

Attention: Members

Engagement of GST Consultant

A GST consultant – Ms Puloma Dalal, FCA based in Mumbai, has been engaged by F A D A on
retainership to help members deal with the complexities of GST law and procedures. She will, on
reference made by FADA, guide and give legal opinion on various issues relating to GST as applicable
to automobile dealers.

F A D A will forward the queries raised by members to Ms Puloma Dalal for her opinion.

While Ms Puloma Dalal will, essentially, give legal position and clarification, supported by case law,
on various GST issues raised by F A D A members, those wanting to engage her as counsel to fight
their cases in litigation, will have to pay separately as per terms that may be mutually agreed to.

Members seeking clarification or legal position relating to GST as relevant to automobile dealers,
may send their queries to Federation of Automobile Dealers Associations (F A D A), 804-805, Surya
Kiran Building, 19, K G Marg, New Delhi - 110 001 (E-mail ID: [email protected])

fada.in | July 2018 F A D A Journal 29









Perspective

Three Surprising Resource Implications McKinsey & Co.
from the Rise of Electric Vehicles

The economic consequences for energy, raw materials, and vehicles on the road is expected to reduce oil demand only
land may not be what you’d expect. modestly over the next 10 to 15 years. To the extent that there
Demand for electric vehicles (EVs) is primed for the passing is downward pressure on oil demand, it will come in large
lane. While EVs accounted for only about 1 percent of global measure from improvements in ICE efficiency and from
annual vehicle sales in 2016 and just 0.2 percent of vehicles making vehicles more lightweight. Those efficiencies have
on the road, McKinsey estimates that by 2030 EVs (including already increased at about 2 percent per annum since 2005
battery electric vehicles and plug-in hybrids) could rise to (raising miles per gallon for an average ICE vehicle in the
almost 20 percent of annual global sales (and almost 35 United States from 26 in 2005 to 32 today). We anticipate
percent of sales in Europe). These rates could rise even faster they will continue to rise at more than 2.5 percent a year
under aggressive scenarios. Already, demography is proving through 2025.
to be destiny. Recent surveys suggest that 30 percent of car- Yet even as internal-combustion-powered vehicles become
buying individuals and nearly 50 percent of millennials will more efficient and less predominant, global crude-oil
consider purchasing an EV for their next car instead of one demand will continue to grow, all while EVs experience a
powered by a traditional internal-combustion engine (ICE). significant increase as a proportion of vehicles on the road.
Increased EV adoption will affect more and different natural Increased oil demand will come from a variety of sources,
resources, as well as multiple industries, different including industries such as chemicals and aviation; growing
geographies, and levels of carbon emissions. Indeed, regions, notably China and other emerging markets; and the
ecological concerns figure strongly in most consumers’ sale of more automobiles globally, including more ICE-
decisions to purchase an EV. Wanting to help the environment powered automobiles, and hence more vehicle miles traveled
was the number-one given reason (by a substantial margin) worldwide.
that American buyers chose an EV in a 2017 CarMax survey. EV adoption will, however, significantly affect demand for a
A study by AAA that same year also found environmental different fossil fuel: natural gas. More EVs mean that more
concerns to be EV purchasers’ leading consideration—at a electricity will have to be produced. While coal will be part
staggering 87 percent rate. Yet our research reveals that of the equation, approximately 80 percent of the forecast
several common assumptions about EVs and the Earth’s growth in US electricity demand is expected to be met with
resources are misplaced. And in some cases, the common natural gas. If half of the automobiles on American roads
wisdom is almost entirely wrong. were EVs, daily US natural-gas demand would be expected to
Fossil fuels: EVs do not spell peak oil increase by more than 20 percent.
Start with crude oil. More EVs will dramatically depress oil Land: An unexpected squeeze?
demand—right? Actually, no; having more electric and hybrid There are currently more than 400,000 public charging points

34 F A D A Journal July 2018 | fada.in

Perspective

that support the more than three million EVs now in use indeed have an impact. In fact, peak demand from a single EV
globally. This number will have to rise significantly to meet using a top-of-the-range fast charger is 80 times higher than
the global EV-adoption increases forecast by 2030 (Exhibit the expected peak demand of a single typical household.
1). Simply replacing gas stations with charging points or These potential constraints will likely have to be addressed
adding more charging points that are the size of gas stations through a variety of approaches, from innovation to top-
won’t be sufficient to service the expected number of EVs. It down mandates. China has set a target of 4.8 million charging
will take multiple rapid 120-kilowatt charging stations with stations by 2020; McKinsey expects that the country’s
eight outlets to dispense a similar amount of range per hour governmental record of centralized policies and compulsory
as the standard-size gas station of today.
The possibility of a land squeeze implementation will ensure the country
will be much greater in Europe meets its mark. Funding outside of
and China than in the United China, however, will be more
States. Only 40 percent of challenging. California utilities, for
European and 30 percent of example, look to increase publicly
Chinese EV owners have access funded investments, with regulated
to private parking and wall returns. Private funding, on the other
charging, versus 75 percent of hand, could come from companies such
US EV owners. Nor is the as retailers. Several retail leaders are
challenge merely a question of already beginning to consider how to
where to plug in or power up; turn the charging experience to their
generation and distribution are advantage by giving customers the
also factors. Today ’s power opportunity to purchase while powering
facilities can accommodate up. Just as shopping malls have long
tomorrow’s significant rise in conjured images of leading retailers
the number of EVs, as long as anchoring the buying experience, large
the vehicles are charged off retail-driven charging stations may
peak. Faster charging during come to mark the commercial landscape.
peak demand, however, will Ores and metals: Between a cliff and a
hard place
It’s not surprising that more EVs on the
road will result in greater price pressure

fada.in | July 2018 F A D A Journal 35

Perspective

for their constituent parts. The cost of an EV can be broken unfold; the costs of cobalt and lithium have more than
down largely into the cost of its battery (40 to 50 percent), doubled since 2015, an effect that has resulted in a net
electric power train (about 20 percent), and other elements increase in EV production costs over that time (Exhibit 2).
of the vehicle itself (30 to 40 percent). Of these, battery costs Will the availability of these materials constrain greater
will be the most important in the medium term. And pricing EV penetration? Optimistically, no. Even with the predicted
dynamics will reflect more than just demand. Currently, rise in input costs, batteries can still come close enough
battery costs are about $200 to $225 per kilowatt hour. We to the $75 to $100 per kilowatt threshold needed to
estimate that a battery cost of $100 per kilowatt hour will be approach broad ICE price parity. While concerns such as
required to achieve cost parity with ICE vehicles for most C- a “cobalt cliff” exist and demand implications could
segment and D-segment vehicles and $75 per kilowatt hour present a temporary speedbump, the constraints and
for larger ones, unless government subsidies are continued— uncertainties should be addressable. Shifting to other
an unlikely proposition, as subsidies worldwide are already battery chemistries can mitigate risks of shortage. Mining
being phased out. If EV sales are to meet forecast levels, more of the raw materials will also be needed, which, we
battery-manufacturing capacity will need to increase too— estimate, will require investments of $100 billion to $150
by our analyses, threefold by 2020. Technological billion. As well, mining’s hard realities will still apply,
improvements must also continue apace. including lead times of up to several years and ecological
Higher EV sales will help reduce battery costs, with major and social concerns in regions within Africa and South
battery manufacturers racing to expand capacity. At the same America where much of these raw materials are found.
time, EV growth will put pressure on the costs of crucial Even as a green solution, in other words, EVs will have
battery inputs, including cobalt and lithium, for which costs as well as benefits for society, our environment, and
demand will rise sharply. That dynamic has already begun to the resources we consume.

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]

36 F A D A Journal July 2018 | fada.in



Chart of the Month



Dealership Profitability

Does Call Center Performance Affect Service Load?

TLDR: There is a direct correlation between call center performance and service load at a dealership

All the best general managers of service at Indian dealerships However, a better scientific method of quantifying the effect
have this intuition – whenever the workshop doesn’t have is to measure the correlation score. This is a mathematical
adequate service load, they push the telecallers to tighten measure that compares two different sets of data and
the service reminder process. scores their inter-dependence between -1 and 1. When it
is 1, it indicates that
Exhibit A: Paid Service Load vs Number of Service Reminder Calls made by the Call Center in a month two sets of data are
fully dependent on each
other – when one
increases the other
increases in tandem (eg.
age and height for
adolescents). When the
correlation is -1, it
means that the two data
sets are fully dependent
in a negative way – when
one increases, the other
decreases in tandem
(eg. demand and price
for many goods). When
correlation is 0, it
means that both sets of
data do not depend on
each other.

The correlation for the
data in Exhibit A is 0.92!
This is as close to 1 as
However, we have encountered a counterview as well, any real-world data ever gets. This strongly tells us that
sometimes from dealer principals and sometimes from service reminder calling directly impacts paid service
managers at OEMs – that service is a captive business, load.
customers do not have any other option and
hence, service reminder calling is just a courtesy Exhibit B: Correlation between Number of Service Reminder Calls in a Month
that does not impact service load. and Paid Service Load that Month

To begin, in Exhibit A, we have plotted the monthly
paid service load at a Maruti Suzuki dealership
in East India along with the number of service
reminder calls made in the same month by the 6-
people in service marketing call center of this
dealership. The number of calls made in a month
varies as the telecaller monitoring efforts at the
dealership vary.

Seen casually, a graph like Exhibit A seems to
strongly suggest that the intuition of the service
GMs is indeed correct – paid service load seems
to ebb and flow exactly with the number of service
reminder calls made at this dealership.

40 F A D A Journal July 2018 | fada.in

Dealership Profitability

But this was just one case. What does the correlation number before turning up at the workshop. So, these are the customers
look like across all dealerships and across a wide selection who have been successfully reminded that their service is
of OEMs? The answer is in Exhibit B. due and then have turned up at the workshop within 15 days
The correlation score is consistently above 0.7, for 4-wheeler of the reminder.
as well as 2-wheeler dealerships across a breadth of OEMs. This shows that for a massive majority of the customers,
Remember that the metric we have chosen to compare against across OEMs, call center reminders are absolutely critical
paid service load – number of service reminder calls in the in their decision to turn up for service at a workshop.
month, is a very simple metric. It is incredible that we have Conclusion
such a strong result with such a simple metric. After all, this The intuition of the top General Managers of Service at Indian
metric does not measure the quality of the call at the call dealerships that workshop load is directly dependent on call
center or even whether the customers are being called at the center performance is absolutely correct. In fact, it is this
right time or the wrong time. intuition that got Autoninja started – our first CRM product
Most strong results in science have this nature – the results was for managing service marketing; we added our Insurance
are strong even with very simple metrics. marketing and Sales Automation products only later.
Finally, in Exhibit C, we are also reporting our across-OEM We advise Dealer Principals to invest in call center processes
benchmarks for a metric we call “Call Center Contribution” for service reminder calls. These are absolutely critical in
for the top 10% dealerships in India for each OEM. We define maintaining and improving workshop load. Given that paid
Call Center Contribution as: of all the customers who did a service load contributes to as much as 1/3rd of a dealer’s
service with the dealership, how many had answered a service PAT, service reminder processes can make or break a
reminder call from the call center within at most 15 days dealership.

Exhibit C: Call Center Contribution at the top 10% dealerships across OEMs

The article was contributed by Nikhil Sharma and Kshitij Saxena from Autoninja. Autoninja is India’s largest Auto CRM.
It is used by Dealers for Service Marketing, Insurance Marketing and Sales Automation.

fada.in | July 2018 F A D A Journal 41



Competition Law Updates

Ola-Uber case: CCI decides on whether common Although Valeo has denied the allegations, it has
investors will curtail competition agreed to settle the litigation by proposing a
settlement of $9,500,000 and promising to assist with
Recently, on 20th June litigation against the remaining defendants.
2018 the Competition The United States District Court, Michigan has
Commission of India (CCI) scheduled a hearing on 26 September 2018 to
passed an order clearing consider whether to approve this proposed
Ola and Uber of charges settlement.
of anti-competitive Supreme Court stays Competition Appellate Tribunal’s
conduct, specifically, (COMPAT) order that imposed penalty on 3 car
predatory pricing and companies
entering into The COMPAT by its order dated 9th December 2016
anti-competitive concurred with the findings of the CCI and directed
agreements. Ford, Toyota and Nissan, to remove all restrictions
imposed through agreements on auto parts suppliers
G R Bhatia, Partner & Head, The complaint, following so as to open up market for spare parts and remove all
Competition Law Practice Group, which investigation was restrictions on supply by original equipment suppliers
conducted by the CCI, to authorized dealers.
Luthra & Luthra Law Office was filed by Meru. The On appeal, the Hon’ble Supreme Court has stayed the
operation of the COMPAT’s order and the matter, last
CCI acquitted both parties and finally held that the listed on 19th April 2018, will now be taken up on 18th
two parties were not in a position of dominance in the July 2018.
relevant market- ‘radio taxi services in Hyderabad, Carfax wins suit against auto dealers following five
Mumbai and Chennai’, as well as the market for ‘radio year long litigation
taxi and yellow taxi services in Kolkata’. Five years after a federation of used car dealers
alleged antitrust violations against Carfax, an
However, an important issue which was raised during American vehicle information company has received
the proceedings was: whether the two parties could a favorable order from the US Court of Appeals, which
be considered as a ‘group’, owing to their common has dismissed the lawsuit filed by Maxon Hyundai
shareholders. In this regard, the CCI noted that Mazda along with approximately 470 other used car
common ownership may lead to softening of dealers.
competition. However, in the absence of evidence on The allegations in the suit pertained to antitrust
the anti-competitive harms of common ownership to violations against Carfax claiming that Carfax had
markets and stakeholders, it was noted that the exclusive arrangements with 37 out of 40 used car
specific circumstances of this case did not attract the certification programs and charged more from the
provisions of the Competition Act, 2002. dealers for its services.
Following the victory, Carfax has stated that it has
Valeo agrees to pay a settlement in American auto never wavered from its commitment to help dealers
spare parts litigation increase the success of their business and would
continue to do so
In a case where Valeo Inc. along with various other
auto parts manufacturers such as Denso International
America, Mitsubishi Heavy Industries America Inc.,
Sanden. and Panasonic Corporation have been alleged
to have engaged in price fixing and limiting the supply
of motor parts, Valeo has proposed a settlement
relating solely to air-conditioning systems purchased
directly from it.

fada.in | July 2018 F A D A Journal 43

Consumer Case Study

National Consumer Disputes Redressal Commission, New Delhi

Justice V K Jain, Presiding Member

C G Power and Industrial Solutions Ltd and Ors. - Complainants

Versus

Mercedes-Benz India Pvt Ltd - Opposite Parties

Revision Petition No. 51 of 2006 Decided on 11.09.2017

Consumer Protection Act, 1986 - Section 2(1)(r) - Automobile - Manufacturing defect- Faulty Airbags - Airbags on side will not
trigger in event of frontal accident unless airbags system is such as to trigger every airbag irrespective of side on which impact
occurs in accident - Similarly, window bags, which are independent of front airbags also trigger on side on which impact occurs
- Window airbags would not have triggered in this case since there was no impact on sides on which window bags were
provided in vehicle - If front airbags were not to deploy in every accident resulting in front end impact, opposite parties ought
to have disclosed to buyers as to what predetermined level necessary to trigger front passenger airbag were - In absence of
such a disclosure in Owner’s Manual -, as far as functioning of front passenger airbags are concerned would be deficient, on
account of its not providing requisite information to buyer - Frontal airbags of vehicle were defective and that was reason
they did not deploy even in a frontal collision between car and a container truck which had resulted in severe damages to front
portion of car - OPs indulged into acts of unfair trade practice by not giving complete material information to buyers with
respect to functioning and triggering of front airbags provided in car - Total compensation of Rs. 10 lakh and cost of Rs. 10,000
awarded. (Paras 9, 10, 16 and 19)

Important Point

Automobile manufacturers must provide complete information to customers about safety measurers incorporated in their vehicles.

Order

1. Justice V K Jain, Presiding Member - Complainant No.2 "Technically speaking, an airbag consists of three parts:(i)
before this Commission, namely, Sudhir M. Trehan was the bag itself: which is made of a thin nylon fabric, which
the Managing Director of Complainant No.1 - Crompton is folded into the steering wheel or dashboard or, more
Greaves Ltd. Complainant No.1 purchased a Mercedes recently, the seat or door; (ii) the senor : which is the
Benz E240 Car on 27.11.2002 for a consideration of device that tells the bag to inflate. Inflation happens
Rs.45,38,123/- from OP-3, an authorized dealer/agent when there is a collision force equal to running into a
of OP-1 Daimler Chrysler India Pvt. Ltd., for the use of its brick wall at 10 to 15 miles per hour (16 to 24 km per
Managing Director. According to the Complainants, while hour). A mechanical switch is flipped when there is a
launching the aforesaid model in October 2002, the mass shift that closes an electrical contact, telling the
Opposite Parties elaborated its safety system which sensors that a crash has occurred. The sensors receive
incorporated front air bags, side air bags and window information from an accelerometer built into a
bags with crash sensors. According to the Complainants, microchip; and (iii) the air bag's inflation system : which
the OPs guaranteed correct operation of the air bags reacts sodium azide (NaN3) with potassium nitrate
interalia (i) if no stickers or badges were attached and/ (KNO3) to produce nitrogen gas. Hot blasts of the nitrogen
or (ii) the restraint systems (air bags, seat belts, belts inflate the air bag. The air bag system ignites a solid
tensioners, child seat and child seat recognition) had propellant, which burns extremely rapidly to create a
not been modified. It is also stated that driver's air bag large volume of gas to inflate the bag. The bag then
is triggered if a front-end impact occurs and if the force literally bursts from its storage site at up to 200 mph
of the collision exceeds a predetermined level and that (322 kph). A second later, the gas quickly dissipates
is independent of the side bags and window bags. The through tiny holes in the bag, thus deflating the bag. This
features of the air bags are described as under in para 8 whole process does not take more than one twenty-fifth
of the complaint:- of a second."

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Consumer Case Study

This is also the case of the Complainants that Mercedes defects and misrepresentation of the safety features
Benz E class was proclaimed by the OPs to be the safest in the impugned car by the Opposite Parties.
place on the road.
(5) To pay to the Complainants a further sum of Rs.10
2. The vehicle purchased by the Complainants came to be crores each towards punitive damages in the above
involved in a road accident on 17.1.2006 while
Complainant No.2 was returning from Nasik to Mumbai mentioned circumstances.
where he had gone on an official trip. The vehicle, at that
time was being driven by one Madhukar Ganpat Shinde 5. (6) To pay interest @ 18% per annum on the above
an employee of Complainant No.1. According to the amounts pendent lite until the date of actual
Complainants, on NH-3, a goods carrier coming from the remittance."

The complaint has been resisted by all the three Opposite
Parties. The OPs while taking a preliminary objection
opposite side, collided head-on with the car, and the that the Complainant is not a consumer in terms of the
impact of the collision was so high that its entire front
portion was smashed. The driver allegedly suffered minor Consumer Protection Act having purchased the vehicle
for commercial purpose have claimed that the vehicle in
injuries while Complainant No.2 claims to have suffered question was involved in a minor frontal under-ride
grievous injuries in the aforesaid accident and had to against a container truck. It is alleged that damage was
remain hospitalized for more than six weeks. This is also only to the softer parts of the upper front section of the
the case of the Complainants that despite collision, none vehicle which has the effect of further reducing the impact
of the air bags of the vehicle opened and that, had the air shock acting on the occupants. It is alleged that such
bags opened in time, Complainant No.2 might have impact was not of sufficient strength to require the
suffered less injuries or probably no injury at all. triggering of the ETR of the driver's seat belt and, there
was no need for the front air bag to deploy in this
3. It is alleged in the complaint that the representation accident since such deployment would not have provided
with respect to the correct operation of the air bags any additional protection to the driver who was not even
provided in the vehicle are false and were made with a injured having been sufficiently restrained by the seat
malafide intention of luring the customers into buying belt. It is further alleged that as there was no side impact
the vehicle.

It is also alleged in the complaint that OP-2 has been force acting on the vehicle, none of the side bags or
ordered to pay huge compensation on account of the
failure of the air bags of the car to deploy in cases of window bags was deployed. Thus, it is admitted in the
written version of the OPs that neither the front air bags
accidents, in other countries. It is also alleged that the nor the side and / or window bags had deployed due to
air bags in the vehicle appear to suffer from an inherent
defect in the design and in all probability the crash the aforesaid accident. It is also claimed that as per the
technical report, there was no defect whatsoever and
sensors of the vehicle failed to register the impact, which, the safety features/system of the vehicle had functioned
in turn failed to inflate the bags. as designed. It is also stated in the written version filed

4. The Complainants are before this Commission seeking by the Opposite Party that as per the technical report,
the injuries sustained by the rear occupant could have
the following directions to the OPs:- been avoided by wearing the seat belt. Thus according to
the OPs, Complainant No.2 was not wearing the seat belt
"(1) To forthwith replace the vehicle with a new one of at the time the vehicle met with an accident. It is also
similar description which shall be free from any stated in the written version that based upon the contact
defect. marks found at the left B-pillar and deformation of the
back rest to the front passenger's seat, the rear occupant
(2) To return the sum of Rs.45,38,123/- being the cost of must have been seated in the rear left seat. It is also
the defective car together with interest 12% from stated that even if the front air bags had inflated that
27.11.2002 till date of realization. could not in any way have protected the passenger sitting
in the back seat. It is claimed by the OPs that there is no
(3) To pay a sum of Rs.50 crores towards compensation question of deployment of side air bags in a frontal
for loss of business and business opportunities of
the Complainant No.1 due to the non-attendance of
business by Complainant No.2.

(4) To pay a sum of Rs.20 crores towards compensation collision. It is emphasized in the written version filed by
for the pain, injuries, mental trauma, agony,
harassment, inconvenience and hardship suffered the OPs that an air bag inflates only when impact force/
energy exceeds the threshold limit, whereas in this case,
by the Complainant No.2 and his family due to the the impact force was only minor which was largely

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Consumer Case Study

absorbed as deformation energy and soft parts in the company or at dealership. The Complainants however,
front, such as bonnet of the car. have filed a coloured copy of an Owner's Manual in
respect of the E-class Mercedes Benz car. The aforesaid
6. As noted earlier, it is an admitted case that neither the manual purports to be printed in January, 2002 and
front airbags nor the side airbags of the car had deployed therefore could be the manual being made available to
as a result of the accident involving the said car. The the car purchasers in Nov’02, though the pictures of the
case of the Opposite Parties in nutshell is that the front car as given in the manual show steering wheel on the
airbags did not deploy because the impact was not such left side of the vehicle whereas the steering wheel is
strong / forceful as would have triggered the ATR of the provided on the right side in the cars sold in India.
driver's seat belt and did not exceed the pre-determined
threshold limit. As regards the side airbags, the case of 8. The following are the features of the airbags given in the
the Opposite Parties is that the same could not have owner's manual filed by the Complainants:

deployed in the absence a collision impacting the side Front airbags - The driver's and front-passenger airbags
of the car. are triggered- If a front-end impact occurs, If the force of

7. As noted vide order dated 24.8.2017, neither party had the collision exceeds a predetermined level, Independently
placed on record, by that time, the Manual which was of the side bags and window bags, The air bags will not
made available to the Complainants at the time the vehicle trigger in a minor frontal collision. The seat belts will
in question was purchased. The Complainant No.1 had provide the necessary protection in this case.

not at all filed the said Manual, whereas the Opposite Side bags - The side bags are triggered in an accident In
Parties had filed only the photocopies of a few pages of which there is high lateral acceleration, e.g. a lateral
a document printed after 26.4.2004, which was more impact. Onthe sideon which an impact occursIndependently
than 1 ½ year after this vehicle was purchased by of the front air bags. The side bags will not be triggered
Complainant No.1 and therefore could not have been the in a minor side impact. The rear side bag and the driver's
Manual being made available to the car owners at the side bag are triggered on the driver's side.
time of purchase in November, 2002, when the vehicle in Window bags - The window bags are triggered in an
question was purchased by Complainant No.1. The accident In which there is high lateral acceleration, e.g.
following directions were therefore issued to the parties a lateral impact On the side on which an impact occurs
on 24.8.2017: If the vehicle overturns, provided this offers the

"(i) The Complainants shall place on record, within one occupants additional protection Independently of the
week from today, the 'Owner's Manual' if any
provided to them at the time of vehicle in question front air bags. The window bags inflate near pillars A to
C (arrowed).
was purchased. If no such manual was provided to
them or though it was provided but neither the 9. It is evident from a perusal of the above referred extract
manual provided to them nor its authentic copy is from the Manual that the side airbags are triggered only
available with them they shall state so on an on the side on which an impact occurs in an accident
affidavit of the MD of Complainant No.1. and that the said airbags are independent of the front
airbags. Since, admittedly, there was no impact on the
(ii) The Opposite Parties shall also place on record the side of the car in which Complainant No.2 was sitting at
'Owner's Manual', if any, which they were providing the time of the accident, the side airbag would obviously
to the purchasers of Mercedes E-class cars in not have triggered. Even otherwise the airbags on the
November, 2002 on the date vehicle was purchased side will not trigger in the event of frontal accident unless
by Complainant No.1 from them, within one week the airbags system is such as to trigger every airbag
from today. The documents will be supported by an irrespective of the side on which the impact occurs in an
affidavit of the authorized signatory of OP-1 Daimler accident. Similarly, window bags which are independent
Chrysler India Pvt Ltd." of the front airbags also trigger on the side on which the
impact occurs. Therefore, the window airbags would
The Opposite Party No.1 has not filed any Manual / not have triggered in this case since there was no impact
Owner's Manual in terms of the direction dated on the sides on which the window bags were provided in
24.8.2017. It has rather filed an affidavit, stating therein the vehicle.
that it was difficult to find a copy of the Owner's Manual
produced atleast fifteen years ago and they have not 10. As far as the front airbags are concerned, it is stated in
succeeded in getting the precise version either in the the Manual that they are triggered if (i) a front end impact

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Consumer Case Study

occurs (ii) if collision happens at a force exceeding a overlap of approximately 80%. This can be seen from
'predetermined level'. The Manual however, does not the fact that the rigid frame structure of the MB vehicle
disclose as to what the said predetermined level was. If was mainly intact, probably because it slid underneath
the front airbags were not to deploy in every accident the higher chassis of the container truck. As a result, the
resulting in front end impact, the Opposite Parties, in damage to the MB vehicle affected mainly the soft, easily
my view, ought to have disclosed to the buyers as to deformable sheet metal which acts as a crumple zone in
what the predetermined level necessary to trigger the order to reduce impact forces that would otherwise affect
front passenger airbag were. In the absence of such a the occupants. The front cross member of the MB vehicle
disclosure in the Owner's Manual, as far as the was pushed downwards and breaking off at the screw
functioning of the front passenger airbags are concerned connection. Even though the cross member was pushed
would be deficient, on account of its not providing the downwards, the cross member was still attached to the
requisite information to the buyer. MB vehicle and does not show any deformation in the
Section 2(1) (r) of the Consumer Protection Act, 1986 to longitudinal direction and the shock absorbers are still
the extent it is relevant provides that unfair trade practice intact. The radiator and condenser of the MB vehicle
means a trade practice which for the purpose of were substantially intact and not squeezed or broken.
promoting the sale, use or supply of any goods adopts This confirms that the MB vehicle was involved in an
any unfair method or unfair or deceptive practice under-ride accident with only minor longitudinal forces
including that the goods are of a particular standard acting on the MB vehicle. None of the rigid chassis
and quality. It is alleged in the complaint that the members of the MB vehicle were directly impacted in the
Opposite Parties at the time of launching E-Class Model accident. The damage was focused mainly on areas
highlighted its safety system, including airbags while consisting of the softer materials, which has the effect
proclaiming the vehicle to be the safest place on the of further reducing the impactshock acting on the occupants.
road. Obviously, the Opposite Parties were seeking to The front and rear end of the MB vehicle are designed to
encash upon the safety features of the vehicle, including crumple, thus converting impact energy into deformation
the airbags provided therein, for the purpose of selling energy. This has the effect of reducing the deceleration
the vehicle. Therefore, it would be necessary for them to force of the MB vehicle as the crumple zone acts as a
disclose to the buyers as to what the predetermined buffer for the benefit of the occupants in the MB vehicle.
levels, necessary for triggering the front airbags of the In this accident, only the very soft area of the upper
vehicle were. Highlighting the safety features including section of the front's crumple zone was impacted.
the airbags for selling the vehicle, without such a The engine hood of the MB vehicle was pushed back. The
disclosure, in my opinion, constituted an unfair and font right fender was pushed down in the under-ride and
deceptive trade practice. It is only the Opposite Parties partially ripped open on top. However, there was no
which knew what would be the level which would trigger evidence of any frontal impact forces acting on the front
the frontal airbags in the event of an accident. Therefore, right fender. As a further result of the under-ride, parts
the aforesaid material information ought not to have of the engine were broken or dented and the brake
been withheld while selling the vehicle. The Opposite hydraulic unit was pushed back, which in turn caused
Parties therefore, indulged in unfair trade practice or damage to the wheelhouse that is being deformed and
the purpose of promoting the sale of their vehicle. ripped open.
11. The vehicle in question was inspected by one Mr. Lothar The accident caused no damage to the passenger
Ralf Schusdzarra, whose technical qualifications compartment and the integrity of the passenger
comprises Master Craftsman Diploma in Automobiles compartment remains unaffected. Based on the
Mechanics from Germany and he has been an Apprentice information available, we believe that this underride
in Automobiles. He is a senior engineer with Daimler AG must have happened at a very low speed or that one of
and claims to have investigated about 700 accidents. the vehicles was actually more or less in a standstill
He inspected the vehicle in the premises of the authorized position while the other vehicle impacted at low speed".
dealer M/s Auto Hangar. The report co-authored along 12. As regards the airbag system of the vehicle, the report
with Mr Rolf Stadelmann, to the extent it seems to be reads as under:
relevant, reads as under: "Electronic sensors constantly measure the deceleration
"From the damage pattern it appears that the MB vehicle acting on the MB vehicle. Computerized integration and
had under ride into the opposite vehicle with a frontal

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Consumer Case Study

evaluation of the measured vehicle deceleration the said accident. Though, according to the expert of the
determines the change of velocity occurring in the Opposite Parties, it was a underride accident that, in my
respective direction. If the calculated change of velocity opinion, would be irrelevant since under-riding
exceeds certain thresholds, the ETRs and / or the airbags happened on account of the chassis of the container
will be triggered. Whether the threshold for the activation truck being at a higher level. Though, according to the
of the individual SRS components is reached depends, expert, the damage was mainly on the softer components
among other factors, on the deformation characteristics whereas the radiator and condenser remained
of the vehicle (s) involved or the object of impact and substantially intact, the photographs leave no
obstacles involved, and most crucially on the resultant reasonable doubt regarding intensity of the accident. In
direction of forces. his affidavit by way of evidence Madhukar Ganpat
During an accident, the general movement tendency of Shinde, driver of the car in question inter-alia stated
an occupant is always opposite to the impact forces. that he was driving the car at the speed of about 80 km/
Accordingly, such kind of head impact, for a belted front hour when it was suddenly hit head on by the trailer
seat occupants is only expected during a collision with truck coming down a slope from the front side in the
very high frontal impact forces. Therefore front airbags wrong direction and that it was a very serious head on
are only triggered in severe frontal collisions. In collision. He further stated that the bonnet and the
situation with lesser frontal impact forces, or where machine part of the car were totally damaged.
forces are not acting in the vehicle's longitudinal Complainant No.2 Mohan Trehan has in his affidavit
direction, like underrides, roll-overs, rear or side impacts, inter-alia stated that the front portion of the vehicle got
the front airbags are not activated, as in these cases, the smashed when it was hit by the truck and the collision of
front airbags would not be providing the occupants with the car with the truck was quite impactful. The
any additional protection. photographs fully corroborate the deposition of
Analogous to the front airbags, the side- and window- Madhukar Ganpat Shinde, driver and Complainant No.2
airbags are triggered, depending on the side of the impact, Mr. Mohan Trehan and therefore, it is difficult to accept
when a certain threshold is reached. The primary task that the accident involving the car was not a major
of the side bag is to reduce injuries in the region of the accident. Though it is stated by the expert of the Opposite
thorax in a side-on collision. The window bag helps to Parties that the front airbags are triggered in severe
reduce head injuries in a side impact. frontal collision, the deposition of Madhukar Ganpat
As described hereinabove, the MB vehicle was involved Shinde, driver and Complainant No.2 Mohan Trehan
in a minor frontal under-ride against a container truck. coupled with the photographs clearly shows that the
The damage was only to the softer parts of the MB accident involving vehicle in question was a severe
vehicle's upper front section, which has the effect of frontal collision and therefore a major accident.
further reducing the impact shock acting on the 14. It is stated in the report of the expert of the Opposite
occupants. Such impact was not of sufficient strength to Parties that the underride must have happened at a very
require the triggering of the ETR, not to mention the low speed or that one of the vehicles would be more or
driver's airbag. This is corroborated by the fact that the less in the stand still position while the other would be
driver was not injured and was sufficiently restrained at a low speed at the time of the impact. The aforesaid
by the seatbelt. There is no need for the front airbag to statement is based upon the information made available
deploy in this accident as the airbag would not have to the expert but, there is no evidence to prove that at the
provided any additional protection to the driver. As there time of the impact, one of the vehicles was at a very low
was no side impact force acting on the vehicle, none of speed and the other vehicle was in a standstill position
the side airbags or window bags was deployed". or even that both the vehicles were at a low speed at the
13. A perusal of the photographs forming part of the report time the impact happened. On the other hand, the
of the expert appointed by the Opposite Party No.1 would deposition of Madhukar Ganpat Shinde, driver and
show that the vehicle in question had a frontal accidental Complainant No.2 Mohan Trehan clearly shows that the
with another vehicle stated to be a container truck which car was moving at a speed of about 80 km/hour at the
had a higher chassis. The photographs clearly show time the impact took place. Even otherwise, the car was
that the accident, which resulted in damage to the front going from Pune to Mumbai at about 6.00 a.m. There
portion of the vehicle was a severe accident and the could be no reason for the car driver to be driving at a
front portion of the car got badly damaged as a result of slow speed in the early hours of the morning while driving
on a highway.

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Consumer Case Study

15. It is stated in the report of the expert that where the The learned counsel has referred to the decision of the
frontal impact forces are not acting in the longitudinal Hon'ble SC in Amar Singh Vs. Union of India WPC No. 39
direction of the vehicle like underrides or roll-overs the of 2006 decided on 11.5.2011, where the Hon'ble SC inter-
frontal airbags are not activated. However, no such alia reiterated the settled legal proposition that the
information is disclosed to the buyer in the owner's Courts frown upon the litigants who with intent to deceive
manual. If the functioning of the airbags was limited to and mislead the Court initiate proceedings, without full
the aforesaid extent and they were not be activated in disclosure of facts and therefore, do not come with clean
the above referred conditions, the Opposite Parties ought hands. However, there is no material on record to prove
to have disclosed the same to the buyers while selling that the Complainants have withheld material facts from
the vehicles and failure to disclose the said information this Commission or otherwise not come with clean hands.
to the buyers would constitute unfair trade practice The aforesaid judgment therefore, does not help the
within the meaning of Section 2(r) of the CPA. Opposite Parties in any manner.
19. The next question which arises for consideration as to
16. For the reasons stated hereinabove, I hold that the frontal what compensation the Complainants are entitled from
airbags of the vehicle were defective and that was the the Opposite Parties. As noted earlier, since there was
reason they did not deploy even in a frontal collision no impact on the side on which Complainant No.2 was
between the car and a container truck which had resulted sitting, the side airbags and window airbags would not
in severe damages to the front portion of the car. I also have deployed. The material on record also shows that
hold that the Opposite Parties indulged into acts of unfair even if the front airbags had triggered / deployed, that
trade practice by not giving complete material would not have afforded any additional protection to
information to the buyers with respect to the functioning Complainant No.2. Therefore, he, in my opinion, is not
and triggering of the front airbags provided in the car. entitled to any compensation. However, being owner of
the vehicle at the relevant time Complainant No.1 is
17. Relying upon the decision of the Hon'ble Supreme Court entitled to compensation on account of deficiency in the
in The Chairman, Thiruvalluvar Transport Corporation services rendered to it by Opposite Parties. Complainant
Vs. The Consumer Protection Council, I (1995) CPJ 3 (SC), No.1 is also entitled to compensation on account of the
it was contended by the learned counsel for the Opposite opposite party having indulged into unfair trade practice
Parties that this Commission does not have the by not making full and complete disclosure with respect
jurisdiction to entertain the complaint involving a motor to the functioning of the airbags. Considering all the
accident since the said jurisdiction vests exclusively in facts and circumstances, the complaint is disposed of
the Motor Accidents Claim Tribunal. with the following directions:
(i) The Opposite Parties No.1 & 2 shall pay a sum of
18. It was also contended by the learned counsel for the OPs
that since the vehicle in question has been disposed of Rs.5.00 lacs to Complainant No.1 for the deficiency
by the Complainant without seeking permission of this in the services rendered to it on account of the
Commission, the complaint is liable to be dismissed on airbags of the car having not deployed / triggered;
this ground alone. In support of his contention, he (ii) The Opposite Parties No. 1 & 2 shall pay a sum of
relied upon the decisions of this Commission in Tata Rs.5.00 lacs as compensation to Complainant No.1
Motors Ltd. & Anr. Vs. Hazoor Maharaj Baba Des Raj & for the unfair trade practice indulged into by them;
Anr., RP No. 2562 of 2012 dated 25.9.2013, Honda Cars (iii) The Opposite Parties No. 1 & 2 shall, in the Owner's
India Ltd. Vs. Jatinder Singh Madan & Anr. RP No. 2622 of Manual to be provided to the buyers of their E-Class
2012 dated 11.10.2013 and Tata Motors Ltd. & Anr. Vs. Cars, as well as on their website, provide adequate
Manoj Gadi & Anr. RP No. 2321 of 2008 dated 08.5.2014. information with respect to the deployment /
I have perused the decisions relied upon by the learned triggering of the airbags of the vehicle, in
counsel. The aforesaid decisions, in my opinion are consultation with AAUI.
clearly distinguishable on facts since in the present case, (iv) The OP Nos. 1 & 2 shall pay a sum of Rs.25,000 as
no prejudice has been caused to the OPs on account of the cost of litigation to Complainant No.1.
the Complainant having sold the vehicle in question. (v) The payment in terms of this order shall be made
Admittedly, the said vehicle had already been inspected and the directions contained herein will be complied
by the expert of the OPs, even before the complaint was within three months from today
filed. Therefore, the sale of the vehicle did not prejudicial
affect the interests of the Opposite Parties and the
defence available to them in this complaint.

fada.in | July 2018 F A D A Journal 49

New Unveils

Suzuki Burgman Street – The Special One, Launched in India

Suzuki Motorcycle India Pvt Ltd (SMIPL) launched compromising on either power or performance. The CBS
Burgman Street - a 125cc scooter and the descendant on new Burgman Street enables operation of both brakes
from its legendary Burgman portfolio on July 19. With a from the left brake lever, helping in maintaining a good
blend of luxurious design drawn from the European balance between front and rear brake forces.
scooter design language, and packed with advanced A head-turner like no other, Burgman Streets luxurious
technology; the new Burgman Street from Suzuki’s stable design follows the Suzuki European style design that gives
represents the ultimate joy of riding. Burgman Street its premium looks. A bright LED headlight,
Speaking at the launch of Burgman Street, Satoshi Uchida, position lamp and tail lamp set-up further reflects its
MD, SMIPL said, “The Burgman Street creates a new premium aspect, while its integral and cutting edge design
category of scooters in India, focussing on the concept improves the functionality by enhancing the visibility at
of advanced luxury riding. We are committed to offering night. The chrome accent on front and rear body parts
premium, innovative and world-class products to reflect the premium aspect of the scooter which not only
customers. By bringing in the unique exposure of Suzuki’s compliments the overall design but also gives it a striking
international Burgman heritage, we believe that the visual presence.
Burgman Street will be a ‘Special One’ in this segment Burgman Street is built for comfortable riding with the
that will herald a new era of luxury scooter riding in flexible foot-position to reduce fatigue and offer best in
India.” class riding experience. It is loaded with a multifunction,
Sajeev Rajasekharan, EVP, SMIPL said, “The 125cc segment fully-digital instrument panel with a Digital Clock, Fuel
in scooters is a very exciting place currently where we Gauge, O il Change Indicator and a Dual Trip meter. The
also enjoy a strong leadership position. Equipped with body mounted windscreen adopted from the design of
exciting features, Burgman Street redefines luxury and international Burgman Series, reduces the wind blast by
comfort in scooter segment in the country. The new improving the aerodynamics. The Burgman Street uses a
Burgman Street will not only help us strengthen our long and comfortable seat, to give a sense of stability
portfolio in this segment, but will also help us cater to a and comfort while long distances. The Burgman Street
new dimension of scooter customers, who seek luxury also scores high on utility aspects, with a convenient
and the joy of riding.” and secured lid equipped front pocket with standard
The new Burgman Street packs in a 125cc, 4-stroke air- fitment of DC socket & USB charger as accessory; and an
cooled engine with SOHC 2 valve single-cylinder BS-IV under-seat storage capacity of 21.5L.
Engine (8.7PS@7000rpm, 10.2Nm@5000 rpm); and is The new Burgman Street is available in Metallic Mat
powered by the cutting edge SEP (Suzuki Eco Performance) Fibroin Gray, Glass sparkle black and Pearl Mirage White,
technology, that offers an optimal fuel-efficiency without and is priced at INR 68,000 (Ex-Showroom, Delhi)

50 F A D A Journal July 2018 | fada.in