FADA Journal - April 2017

Office Bearers contents

President

JOHN K PAUL PRESIDENT’s MESSAGE 7 Confusion Abounds Post Supreme Court Order
Popular Vehicles & Services Pvt Ltd
Kuttukaran Centre, Mamangalam, Kochi - 682 025 INDUSTRY TRACK 8 A Chequered Year for Indian Auto Market
Tel: +91-484-234 1134 / 7872 / 5013
E-mail: [email protected]; PERSPECTIVE 11 Auto Industry Growth Strategy - Fasten Your Seatbelts
- Strategy&, PWC
[email protected]

Vice President

ASHISH KALE OPINION 14 • For Truck-Makers, BS-III Ban to Cost Rs. 2,500 crore
Provincial Automobile Co. Ltd - CRISIL Research
Kingsway, Near Railway Station, Nagpur - 440 001 SURVEYS & STUDIES • Auto Component Sector Balance Sheets Strongest in a Decade
Tel: +91-712-391 1129 / 1150 INSIGHT - CRISIL
E-mail: [email protected]; • Toll-Operate-Transfer Scheme May Net Rs. 40,000 Crore
NEW ON WHEELS - CRISIL Research
[email protected] UPGRADES & VARIANTS • Indian Tyre Industry Falls Off Peak as Input Costs Rise
- ICRA
Secretary General & Editor, FADA
Journal 20 Newly Launched 2-Wheeler Models Perform Better than
Carry-Over Models on APEAL Satisfaction - J D Power
GULSHAN AHUJA
Federation of Automobile Dealers Associations 22 US Dealers Fear Losing Control As Factory Incentives Burgeon
805, Surya Kiran, 19, K G Marg, New Delhi
Telefax: +91-11-6630 4852, 2332 0095 26 • Tata Motors Launches ‘StyleBack’ TIGOR
E-mail: [email protected] • Web: fada.in • Mercedes-Benz Drives in Flagship S-Class ‘Connoisseur’s Edition’

ADVERTISERS’ INDEX 56 28 • 2017 Audi A3 Launched In India
• Hyundai Rolls Out 2017 Elite i20 and Creta
Back Cover • Honda Introduces 2017 Edition of DIO
Magma Fincorp

Front Inside Cover NEWS BASKET 32 • Changes in Top Management of Honda 2-Wheelers
Tata Capital Financial Services 2 • Hyundai Motor India Announces Elevation of Senior Officials
• Datson GO and GO+ Special Anniversary Edition Launched
Back Inside Cover 55 • Tata Motors Bags Order for 500 Buses from Ivory Coast
Tata Motors • Suzuki Two-Wheelers Rolls Out Its Third Millionth Vehicle
• Toyota Bags the National Exporter Award for FY 2015-16
Inside Pages 3 FUEL WATCH
• Mahindra & Mahindra Financial Services 36 Oil Prices Gyrate Amid Geopolitical Concerns
- Steve Austin for OIL-PRICE.NET

• Bagga Link 4

• Exide Industries 6 CONSUMER CASE STUDIES 40 NCDRC : M&M Financial Services Ltd & Ors - Petitioners
• SKF Group 10 Versus
Ramesh Sawant - Respondent
• Shriram Transport Finance 25

• Sansera India 30 43 Competition Law Updates - G R Bhatia
• Marikar Group 31 COMPETITION LAW

• AMPL 34

• Prime Honda 39 SALES REPORTS 45 Vehicle and Tractor Sales & Exports and Y-o-Y Growth - Mar’17
• Maurya Motors 42

• Olympia Honda 44

• Force Motors 47 NADA MUSINGS 52 Major developments affecting Automobile Industry in US
• BikeDekho.com 50

• Carazoo Online Solutions 51

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



President’s Message Confusion Abounds Post
Supreme Court Order

Dear friends,
The Hon’ble Supreme Court’s order banning sale of BS III vehicles w.e.f.
1st April 2017 has come as the bolt from the blue for the automobile
dealer fraternity across the country. The letter and spirit of the
notifications issued by the Government is that the appointed date of
1st April 2017 is for the manufacture. In other words, the understanding
was that all vehicles manufactured on or after 1st April 2017 shall be BS
IV compliant and that the BS III vehicles manufactured up to 31st March
2017 would be allowed to be sold post 31st March 2017 in keeping with
the practice followed in the past when the country migrated to BS II
and BS III emission standards.
The sudden departure from the past practice put paid to all the
expectations within the automotive industry and retail trade, resulting
in humongous loss to the industry and my fellow dealers.
The apex court’s order is giving rise to various problems in that the different states are interpreting the order differently.
Besides, a number of automobile dealers from various States have reported technical problems in registration of vehicles
online on 30th & 31st March 2017 due to the Transport Departments’ servers slowing down and the systems collapsing, arising
from the huge rush for registration. As a result, the data of vehicles sold on 30th & 31st March could not be transmitted to those
RTOs online on the same day in such cases.
There is a peculiar problem in Delhi and, perhaps also at other places, where quite a few dealers are not online. These dealers
take vehicles and the necessary documents to their respective RTOs for registration of vehicles sold by them. The fees and
taxes are paid at the time of submission of registration documents. There is no provision or system whereby they can remit the
payments to the RTOs online on the same day. These dealers are left high and dry, as the Transport Department in Delhi is not
registering these vehicles on the basis of a circular issued by EPCA. Hopefully, the problem will be resolved soon.
It may be mentioned here that there is no system of temporary registration for private vehicles in Delhi. Even in the case of
commercial vehicles, there is no requirement of temporary registration, if the vehicle is registered within 30 days of sale,
except in cases where the chassis is sent outside Delhi for body building.
FADA, as a body of automobile dealers, has written to the Ministry of Road Transport & Highways for an early clarification to
obviate the confusion prevailing currently. While EPCA is playing a significant role in improving environment and road safety,
the alacrity and the overzealousness displayed by it is giving rise to a lot of confusion and disruption in the market.
We hope, the Central Government or, for that matter, EPCA will issue the clarifications at the earliest so that the vehicles sold
by 31st March can be registered without further delay.
Adverting to the auto market, while the sales numbers for March 2017 sound good, the auto market that was recovering
gradually after the shock of demonetisation, may be relapsing into the phase of uncertainty, owing to the blow inflicted by the
Supreme Court order. However, I am sanguine that the auto market will take this disruption in its stride and march forward on
a growth path, as it has done in the past.
Regarding the activities of FADA, by the time this issue of FADA Journal reaches you, we would have concluded the Council
Meeting, Regional Meeting and Awards presentation ceremony scheduled for 22nd April 2017 at Jaipur.
We are eagerly looking forward to the event, as two important sessions, namely, (i) Interaction with the Transport Minister,
Government of Rajasthan and (ii) Presentation on GST are integral part of the programme. We shall also have a session by the
senior officials of Facebook India on the role of social media in the current and emerging automobile business environment.
With best wishes,
Yours sincerely,

John K Paul

7 April 2017

Industry Track

A Chequered Year for Indian Auto Market

The Indian auto market started off on a promising note in FY the auto industry continues to see mixed reactions due to
16-17, encountering bumps on the way in the second half. The several external challenges and the more recent one being
total domestic sales, encompassing all the segments, posted the unexpected verdict on the sale of BS III vehicles that has
an unflattering single-digit growth of 6.8% during the FY’17. derailed many planned operations. Going forward, factors
The month of March saw a major disruption in the market such as the likely softening of interest rates, revision in fuel
with the Supreme Court ordering ban on sale of BS-III vehicles prices, GST implementation and the Union Budget’s focus on
from 1st April 2017. The vehicle sales in the Indian market rural are expected to bring back demand.”
during the month of March 2017 were flat, crawling up by
just 1.3% to 1,880,352 units from 1,855,623 units a year ago. Another home-grown player, namely, Tata Motors, however,
notched up a whopping 51.7% growth in domestic passenger
Passenger Vehicles maintain growth momentum vehicle sales, clocking 17,093 units in March 2017, compared

Passenger vehicles stayed on course to end up with a growth to 11,268 units a year ago.
of 10.0% in domestic sales that stood at 282,519 units in Honda Cars India Ltd (HCIL) built up on the momentum of
March 2017 vis-à-vis 256,920 units in March 2016. Healthy the last two months to post domestic sales of 18,950 units
sales in March 2017 helped passenger vehicles cross 3- in March 2017, which translated into an 8.7% uptick vis-à-vis
million domestic sales-mark in a year for the first time. 17,430 units in March 2016. New models like the 2017 City

The year saw car market leader, Maruti Suzuki India (MSI), sedan and the WR-V crossover were major contributors to
achieve the 1.5 million sales landmark for the first time. The overall sales. While Honda City with 6,271 units topped the sales
company ended up with highest ever total sales of 1,568,603 for HCIL, WR-V with 3,833 units was the next best, followed
units and the highest ever domestic sales of 1,444,541 units by Jazz (3,527 units), Amaze (3,296 units), BR-V (1,436 units),
during FY’17. In March, the company’s domestic sales at Brio (540 units), Accord Hybrid (28 units) and CR-V (19 units).

127,695 units and exports at 11,590 units were up 7.4% and Yoichiro Ueno, President and CEO, HCIL, said, “Strong sales
10.9%, respectively, year-on-year. The consistent strong momentum for our latest offerings in the market, the new
demand for Vitara Brezza and Baleno boosted MSI’s sales tally. Honda City 2017 and Honda WR-V, helped us achieve a good

The second largest car manufacturer, Hyundai Motor India sales result during March 2017. We are confident of a strong
Ltd (HMIL) also witnessed record sales, crossing the milestone show in 2017-18 with a robust product-portfolio and good
of 5 million units in domestic sales for the first time in a fiscal demand from the market.”

with a tally of 509,707 units during FY 2016-17. The company Toyota Kirloskar Motor (TKM) sold 13,796 passenger vehicles
sold 44,757 units in March 2017, up 8.6% (March 2016: in the Indian market in March 2017, registering a spectacular
41,201). The company’s exports grew by 5.9% y-o-y to 10,857 80.6% growth (March 2016: 7,637 units). The company also
units during the month. reported 11.6% rise in total domestic sales during FY’17, which

Commenting on the sales, Rakesh Srivastava, Director (Sales added up to 143,364 units, as against 128,494 units in FY’16.
and Marketing), HMIL, said, ”The Grand i10, Elite i20 and Creta
achieved record sales of over 10,000 units each in a single Driving in fast lane, Ford India registered domestic sales of
month. Highest-ever sales of 509,707 units in a fiscal year, 8,700 units in March 2017, witnessing a 16.0% growth over
creates a strong momentum for the next year.” 7,499 units in March 2016. Cumulative domestic sales of Ford
India during the year 2016-17 aggregated 91,405 units - up
Mahindra & Mahindra (M&M), clocking 25,352 units of 14.9% y-o-y. Total exports at 158,469 units during the year
passenger vehicle sales in domestic market during March 2017, zoomed 42.9% y-o-y.
witnessed a 5.7% dip vis-à-vis 26,885 units
in March 2016. M&M’s total domestic sales Sales (Domestic + Exports) during March 2017 viz-a-viz March 2016

at 236,130 units in 2016-17 registered a flat
growth (2015-16: 236,307 units).

Rajan Wadhera, President, Automotive
Sector, M&M, said, “We are happy that our
new brands are gaining traction as together
KUV100 and TUV300 crossed the 100,000
sales milestone since their launch. However,

April 2017 8





Perspective

Auto Industry Growth Strategies - Fasten Your Seatbelts

Strategy&, PwC

The global auto industry is always in flux, as new models and These trends are just a snapshot of the imminent future for
designs alter the shape and performance of automobiles. the auto industry. Not included in this snapshot are the many
Nonetheless, few periods in automotive history match today’s day-to-day challenges inherent to the modern auto industry,
pace of change. Over the next five to 10 years, five trends will which we expect will only become more vexing as time goes
dominate, and each will carry with it specific challenges that on. Among them: required engineering improvements for the
auto industry executives will have to confront. traditional internal combustion engine, anticipation of
• Self-driving will accelerate. Companies will need to consumer design preferences, complexity management,
pricing management, and the threats posed by new
determine whether they can develop the technology to competitors moving into popular vehicle segments.
compete in this arena. If not, they may have to partner In this complex environment, auto companies can no longer
with a company that can better provide autonomous car hope to be everything to everyone. There are simply too many
technology. In addition, any companies hoping to be technical options, markets, and social and demographic
players in the self-driving market must consider the impact changes to address. And as the competitive landscape
on supplier relationships and manufacturing operations, intensifies, being average at many things will not be good
particularly what’s needed to make these cars available enough anymore; companies will need to pick their bets and
in blossoming global markets in emerging nations. become great at the things that truly matter for the customers
• Electric vehicles will take off. This may offer an they have chosen to serve. Each auto company must be very
opportunity for automakers to meet increasingly strict clear about how it plans to add value for its particular set of
CO2 emissions requirements and to provide an array of customers; in other words, it has to confidently choose its
new consumer and fleet products.

• Connectivity will expand. Connectivity, which is already
having an impact, will expand to include a much wider
range of features, such as car-to-X appliance
communications. For instance, your home air conditioning
system will automatically activate when you (and, more
precisely, your car) are 20 minutes away. Automakers will
have to build an ecosystem that includes partnerships
with technology companies to develop connectivity
features that stand out and attract consumers.

• Profit pools will shift through new services. Traditional
carmaker business models are commoditizing, and OEMs
need to re-examine their sweet spot in the value chain to
address shifting customer needs. This could involve
moving from car ownership to pay-per-use and ride-
sharing services. But before choosing to enter this market,
vehicle manufacturers will have to understand the full
costs of safety features, design innovations, and licensing
rules in different global markets, as well as car-sharing
overhead (parking, liability, and insurance) if they want
to provide the services themselves.

• Business models will become more local. Operating
globally has become significantly more challenging and
complex. Automakers must find ways to understand and
navigate the regulatory policies wherever they sell their
products and wherever they have manufacturing facilities
and suppliers.

11 April 2017

Perspective

way to play. And auto companies must determine which emerging, those that are fuelled by recent technological or
distinctive capabilities — that is, which unique processes, tools, regulatory developments and changing customer behaviour.
knowledge, skills, and organization — will allow them to
deliver on this value proposition better than anyone else and Traditional models
create a clear right to win.
Armed with a coherent system in which distinctive Experience providers. These companies build enjoyment,
capabilities, a strong way to play, and suitable products and engagement, and emotional attachment through strong
services are aligned, automakers can generate sustained brands or experiences. Required capabilities include managing
profitable growth. Such a coherent system is hard to copy, strong differentiated brands; managing a consistent brand
provides real value to customers, and differentiates experience across all models, geographies, and channels; and
companies from competitors. recruiting dedicated and enthusiastic employees.
Across all industries, coherent companies are three times as Premium players. These companies offer high-end, high-
likely as firms that are incoherent to grow faster than the prestige products or services from design through sales and
industry average, and they are 2.5 times more likely to after-sales services. Required capabilities include having the
generate higher profitability than the industry average. That highest-quality research, development, and production
is because coherent companies, by focusing on their few activities and being able to take advantage of the latest
distinctive capabilities, continually improve in the parts of the breakthroughs in materials, technology, and performance.
business that matter most to their customers, and limit Value players. These companies rely on efficient, scalable, and
spending in areas that are non-differentiating, such as sustainable operations to provide low-priced vehicles and
unnecessary “lights on” or tables stakes capabilities. services often viewed by consumers as the best value for their
money. Required capabilities include knowing how to prioritize
Moreover, companies demonstrating that they are passionate cost optimization in R&D and procurement and leveraging
about their differentiating capabilities have more engaged scale and efficiencies in marketing, sales, and overhead.
employees and are able to recruit the best and brightest talent Fast followers. These companies rely on the innovation of
in the areas that matter most to them. other auto companies to quickly introduce competing vehicles.
Selecting the coherent system that will give your company a In doing so, they often are able to provide greater value and
distinctive advantage requires a thorough assessment of your sell to a broader base of consumers than the companies
company’s current strengths and the capabilities it can responsible for the design and manufacturing advances.
realistically develop, as well as penetrating insights into where Required capabilities include having efficient and fast-paced
the market is heading and what customers will increasingly product development and production functions, leading fast
demand. In our view, for automakers, there are currently nine followers to a shorter time-to-market than other automakers
archetypal ways to play, each of which has its own set of have. These companies also excel in market and competitor
required capabilities. (More may develop in the future.) These analysis.
archetypes can be categorized as either traditional, those that Reputation players. These companies are viewed by
have been a part of the auto industry historically, and consumers as trustworthy manufacturers and can charge a
premium because of their good name in the marketplace.
Required capabilities include displaying a strong commitment
throughout the organization to maintaining and strengthening
their reputation.

Emerging models

Regulations navigators. These companies find creative
solutions for operating within regulatory boundaries and are
able to offer customers in any region access to dependable,
well-designed, and high-quality products. Required capabilities
include making reliable predictions of regulatory trends and
integrating those predictions into the R&D process.
Innovators. These companies consistently introduce new and
creative products, such as electric or autonomous cars, or

April 2017 12

Perspective

mobility and connectivity services. Required capabilities fundamental question: “Who do we want to be?” In other
include accurately identifying new customer needs and market words, “How should we be different to create value?”
trends and finding ways to rapidly transform innovation into Automakers need to determine which skills, systems,
salable products and services. An open-minded corporate processes, tools, and culture they can leverage or build to
culture is often critical as well. establish a differentiated way to play and implement a strategy
Solutions providers. These companies offer bundled products that works.
and services that address an unmet need in the market and
adeptly focus on customer-oriented solutions instead of single How automakers can adopt a strategy that works
products or services. Required capabilities include responding
quickly to customer demands for innovation by bringing Achieving and maintaining a coherent strategy takes
potential users into the development process and integrating discipline and a willingness to chart an unorthodox path. A
disparate technologies and practices. company needs to undertake five unconventional acts of
Platform providers. These companies operate and oversee leadership:
shared resources. Required capabilities include having superior 1. Commit to an identity. Coherent companies don’t get
infrastructure with high availability and excellent user
interfaces, defining and establishing standards, and building trapped on a growth treadmill, chasing multiple market
relationships with consumers on new channels. opportunities, many of which they have no hope of
It’s important to note that choosing one of these ways to play gaining an advantage in. Instead, they are clear-minded
and building the corresponding capabilities system does not about what they do best, developing a solid value
guarantee sustained sector leadership. Automakers must proposition and building distinctive capabilities that will
constantly recharge their capabilities system to address last for the long term.
changing trends and to further improve their value to 2. Translate the strategic into the everyday. Many managers
customers, which in turn allows them to protect and enhance assume they should adopt the best practices of their
their competitive advantage. Depending on which model you industry and treat external benchmarking as the
choose to pursue, new trends will have a different impact on established path to success. But coherent companies view
your capabilities system. things differently. They translate the strategic into the
For example, when addressing the connectivity trend, a value everyday. They design and build their own bespoke
player must focus on the best economic equation to maintain capabilities that set them apart from other companies.
its niche as the provider of inexpensive, high-quality vehicles. Then they bring those capabilities to scale in their own
In the calculus, the value player may share R&D costs and distinctive ways.
products with third-party companies, leverage off-the-shelf 3. Put your culture to work. A standard business practice
or non-custom technology, and are selective about advancing for solving execution problems is structural change:
features. By contrast, an innovator should be agile and aim reworking the organizational chart and rethinking
to lead in new connectivity developments; this type of incentives. The culture of the enterprise, if considered at
company should control the potential breakthroughs in this all, is seen as a hindrance. But coherent companies resist
area as well as influence the legal framework for disruptive reorganizations and instead put their current
implementing these features. Possibly, an innovator could culture to work. They tap the power of the ingrained
also consider new markets to tap — such as mobility-as-a- thinking and behaviour that already exists below the
service — that grow out of its connectivity designs. surface in their company, using culture, not structure, to
For automakers, the future is full of challenges but also drive change.
tremendous opportunities. In this era, the industry is grappling 4. Cut costs to grow stronger. A conventional company
with enormous and unprecedented shifts in powertrain design might try to reduce costs across the board by going lean
and vehicle technology. One thing is certain: In 10 years, the everywhere. But the most successful companies cut costs
mix of new vehicles that hit the road will not at all resemble to grow stronger. They marshal their resources
what we see today; on every thoroughfare there will be an strategically, doubling down on the few capabilities that
amalgam of drivetrains, models, features, networks, vehicle- matter most and pruning back everything else.
to-X communications, and artificial intelligence. To succeed 5. Shape your future. Coherent companies are not trying
in this landscape, automakers will need to ask themselves a to simply become agile. They don’t respond to external
change as rapidly as possible. Instead, they shape their
future by creating the change they want to see

13 April 2017







Opinion

Indian Tyre Industry Falls Off Peak as Input Costs Rise: ICRA

Q3FY2017 - Revenue growth affected due to TBR imports: Chinese tyres get an ADD/CVD reprieve from
demonetization; margins fall with input costs moving
north United States International Trade Commission; tyre
imports to India likely to fall

The Indian tyre industry revenues grew at a moderate 3.4% The demonetisation drive November 2016 affected
YoY during Q3FY2017, impacted by the Nov ‘16 imported Chinese tyres which were being fed to the
demonetisation and subdued realisations owing to weak replacement segment through cash-driven unorganized
pricing power. Interestingly, demonetisation benefited the channels. Despite this, overall tyre imports are still expected
Truck & Bus radial (TBR) segment as the currency crunch to grow by 10%-12% (value) in FY2017.
brought down the un-organised segment import of Chinese
TBR tyres. But its adverse effect was witnessed in the rural- In a major reprieve to Chinese tyre exporters, in February
demand dependant two wheeler (2W) and tractor 2017, the United States International Trade Commission
segments, where purchases were deferred. Further, price (USITC) pronounced that tyre exports from China did not
cuts taken in the initial part of Q3 affected the overall impact the US tyre industry; accordingly no ADD was
realizations even as some players started hiking prices imposed on Chinese tyres. During the period of dumping
towards the end of Q3 to compensate for the inching up in probe, export of Chinese tyres to USA had significantly
raw material (RM) prices. reduced; US imports of T&B tyres from China which was
worth $1.5 billion in 2015, but fell to over $1 billion in the
With the spike in RM prices and falling realisations, industry first 11 months of 2016. Part of this decline in US demand
margins contracted sharply during Q3 FY2017; the for Chinese tyres was re-routed by China to other countries,
operating and net margins stood at 16.5% (down 317 bps) including India. With the USITC’s ruling, China’s tyre exports
and 9.0% (down 127 bps) respectively. For 9M FY2017, the to USA is expected to revive and this will bring down
industry revenues were largely flat (up 1.7% YoY) with imports to India; demand and margins in the USA tyre
operating and net margins declining by 110 bps and 35 bps industry is relatively higher than other markets. On the
respectively. pricing front too, with global NR ruling at premium to
domestic NR prices, the price deferential between Indian-
Tyre Exports: Demand rebound in the current year, made and imported tyres has reduced. Accordingly, import
realizations to improve as higher RM prices gets passed momentum into India is expected to drop in the medium
on in Q4 term.

Driven by strong growth across product segments, overall Cash surplus industry continues to commission projects
export volumes grew by ~29% during 9MFY2017. However
with realisations falling by ~14% YoY; tyre exports (in value) During FY2014-17, the industry commissioned Rs. 11,500
grew by ~15%. Agri / construction segment, which crore worth of projects. The next four years FY2017-20 is
represents over half of the tyre exports (in value) from India, expected to witness commissioning of another Rs. 21,000
grew at a strong 14% YoY during 9M FY2017. Export of Truck crore worth of projects, of which project closer to
& Bus (T&B) and 2W tyres have also been on a rise with completion are the Rs. 2,500 crore Maxxis Sanad 2W and
value growth of 5% and 21% respectively during 9M FY2017 PCR project (FY2018), the Rs. 650 crore Halol CEAT plant
while PV exports continued to de-grow (2%) for the second for PCR and TBR (FY2018), the Rs. 800 crore Butobori CEAT
straight year. 2W project (FY2018), the Rs. 2,800 crore PCR/TBR
Bridgestone project (FY2018) and the Rs. 800 crore Balasore
In Q4FY2017, growth in tyre exports is expected to PCR Kesoram project (FY2018).
remain healthy as the pent up replacement demand in
Agri / construction segment will be complemented by ICRA RM price index expected to spike by 15%-18% QoQ
the expected rise in realizations, as exporters have during Q4FY2017
started passing on the increase in input costs. Over the
next three years, exports are projected to grow at 6%- Domestic Natural rubber (NR) is currently (March 28, 2017)
8% led by stable demand and increased acceptance of trading at Rs. 147/kg after breaking out from the three-year
Indian tyres in overseas markets, both in terms of quality high of Rs. 160/kg in February 2017. Short-supplies from
and pricing. Thailand due to heavy rains and floods amidst increasing

17 April 2017

Opinion

consumption from China and USA; and higher crude oil demand, both domestic and exports, and likely
prices, resulted in a sharp ~30% and 50% jump in domestic improvement in realisation. ICRA research expects revenue
and global NR prices respectively between November 2016 growth for the industry of ~12%-13% (CAGR) during FY2017-
and January 2017. However, NR prices have corrected since 20. However the industry profit margins, which have been
the last week of February 2017 with rising production, at elevated levels in the last two years, is expected to
falling crude oil prices and the Government of Thailand’s contract with hardening of raw material prices. Industry
decision to liquidate its large NR stockpile to cash in on the wide operating and net margins are expected to stabile over
elevated NR prices. the next two years at ~14%-16% and 7%-9% respectively,
in the absence of any un-natural price disruptions for crude
Prices of crude linked derivates have spiked sharply in Q4 and NR. With the resumption of debt funded capital
FY2017 although some moderation was witnessed in March expenditure plans (towards capacity additions), the
2017. WTI crude oil prices which surged by ~20% during capitalization and coverage indicators are likely to moderate
Nov ’16 -Jan ‘17 corrected in March’17 due to continued marginally. Despite this, the industry credit profile will
increase in US production and higher rig counts, and despite remain strong with net gearing of 1.0-1.3x and net debt to
the cut in OPEC production. Breaking away from the muted operating profit of 0.3x-0.4x.
growth in the last few quarters, the ICRA RM price index
reflects a sharp 15%-18% estimated growth on a QoQ basis Steep contraction in Q3FY2017 profit margins with
for Q4FY2017. While there has been some moderation in sharp spike in RM prices; revenue growth remains
the prices in recent weeks, the blended cost for Q4FY2017 muted
is expected to be significantly higher than the past ten
quarters. • Demonetization in November 2016 had an adverse
impact on the tyre industry, especially the rural-
Outlook: Stable demand dependant two wheelers (2W) industry. MRF
and TVS Srichakra, which collectively meet over 60%
The outlook for the domestic tyre industry over the near of the 2W tyre demand, reported a 0.8% and 4.5% YoY
to medium term is stable supported by favourable tyre de-growth respectively during Q3 FY2017 while others
recorded a moderate 2%-5% growth. However, Truck
& Bus radial (TBR) segment benefited from
demonetization as the currency crunch brought down
the un-organised segment import of Chinese TBR tyres,
which are fed to the replacement market. Falling TBR
tyre imports is expected to be temporary and should
pick up in FY2018. That said, with the United States
International Trade Commission deciding not to impose
anti-dumping duty on Chinese TBR tyres, and China
restarting exports to USA, aggressive dumping into
India is likely to be under control.

• The industry revenue growth was also affected by lower
realisations on the back of weak pricing power despite
rising RM prices since December 2016. Limited price
hikes coupled with fall in 2W tyre volumes (which
represents ~50% and 15% of tyre industry, in volume
and value terms) had resulted in a moderate revenue
growth of 3.4% YoY during Q3 FY2017.

• Company wise, revenue growth of BKT (+26.3%), CEAT
(+4.9%), JK Tyres (+4.7%), Apollo (+2.0%) and Goodyear
(+3.7%) were positive during Q3 FY2017. BKT’s revenue
growth was the highest across players for the second
straight quarter supported by strong replacement
demand from agriculture / construction segments in

April 2017 18

USA and Europe. Healthy export demand supported prices increasing sharply during the period Dec-16 to
BKT’s growth while strong TBR volumes (with falling Feb-17, operating and net margins are likely to contract
imports) aided the revenue growth of Apollo and JK by ~200-300 bps and 100-200 bps respectively.
Tyres.
Automotive demand scenario: Demonetisation hits
• Industry wide operating margins have been contracting demand in Q3FY 17
in the last two quarters with increasing RM prices.
Following a 100 bps contraction in Q2FY2017, the profit • Compared to the 10.9% YTD August-16 growth,
margins witnessed further correction during Q3FY2017 automotive industry sales (domestic + exports) growth

(down 350bps YoY). With falling operating margins, contracted during Q3FY17 across most segments.

interest coverage ratio moderated to 8.9x in Q3FY2017 Demonetisation led to a systemic cash crunch leading

from the peak levels of 12.1x in Q3FY2017. to deferment of replacements and discretionary

• ICRA’s RM tyre price index grew by 2% YoY in Q3FY2017 purchases. Rural demand was hit hard as the currency
as prices of both NR and crude derivatives inched up. economy collapsed briefly.

Domestic NR prices averaged at Rs. 153 per kg in Q4 • ICRA research’s estimate for automotive sales
FY2017 against Rs. 130 per kg in 9MFY2017. With RM (Domestic + Exports) stands at 6-7% for FY2017

19 April 2017

Surveys & Studies

Newly Launched 2-Wheeler Models Perform Better than Carry-
Over Models on APEAL Satisfaction: J D Power

Honda Receives Three Model-Level Awards; Bajaj, Hero, TVS Each Receive One Model-Level Award

Buyers of newly launched two-wheeler models have higher • Initial quality has a strong influence: Satisfaction among
satisfaction than buyers of carry-over models, according to owners who have not experienced any initial quality
the J D Power 2017 India Two-Wheeler Automotive problem (62%) with their two-wheeler during ownership
Performance, Execution and Layout (2WAPEAL) Study, released is 66 points higher than among owners who report a
on March 30. However, satisfaction declines if buyers face problem (852 vs 786, respectively).
problems with vehicle quality during the initial ownership
period. • Explanation of features and benefits improves APEAL
The study is a key industry benchmark that measures owners’ satisfaction: Overall satisfaction among owners who
emotional attachment and level of excitement for new two- received an explanation about vehicle features and
wheelers during the first two to six months of ownership. The benefits during the delivery process (78%) averages 51
study examines 34 attributes across six performance categories points higher than among those who did not receive such
(in alphabetical order): control switches/ locks; engine and information (841 vs 790, respectively).
transmission performance; fuel economy; looks and styling;
ride and handling; and seats. Overall APEAL performance is • Greater satisfaction with looks and styling of newly
reported as an index score based on a 1,000-point scale, with launched two-wheelers: Satisfaction with the looks and
a higher score indicating higher satisfaction. styling of their vehicle is higher among owners of newly
In the motorcycle category, the newly launched models not launched two-wheelers compared to that of buyers of
only generate higher APEAL satisfaction than carry-over two-wheeler models that were carried over from last year
models from last year (831 vs 826, respectively), but also (846 vs 837, respectively).
perform better in terms of initial quality problems1
experienced by buyers (139 PP1002 vs 152 PP100, “Because visual appeal—looks and styling—is the main
respectively). purchase reason most often cited by buyers of newly launched
Among scooters, satisfaction with the newly launched models two-wheelers, a more regular cycle of product styling updates
is 12 points lower than for carry-over models (817 vs 829, by manufacturers would resonate well with consumers,” said
respectively). The reason is that newly launched scooter Rajat Agarwal, two-wheeler industry expert at J D Power,
models fare worse than carry-over models with initial quality Singapore.
problems (146 PP100 vs 126 PP100, respectively).

“Two-wheeler manufacturers launch multiple new models
each year that offer contemporary looks, styling and increased
feature contenting,” said Kaustav Roy, Director at J D Power,
Singapore. “However, the quality of execution is pivotal to
satisfaction. Buyers in India have a wide range of two-wheelers
to choose from, thus it would be prudent for OEMs to ensure
that their new products are of improved quality to benefit
from sustained acceptance by customers.”

Following are some key findings of this year’s study:

• Satisfaction leads to advocacy: Among highly satisfied
owners (overall satisfaction of 904 points and above),
more than two-thirds (70%) say they “definitely would”
recommend their two-wheeler to a friend or relative,
compared with just 37% of highly dissatisfied owners
(overall satisfaction below 772) who would offer a similar
recommendation.

April 2017 20

Surveys & Studies

Results by Segment Following are some key findings of this year’s study:
• Overall OE tyre customer satisfaction averages 873 points
Award recipient segments include scooters (executive) and
motorcycles (economy, executive, upper executive and (on a 1,000-point scale), with no change from 2016.
premium). • Tyre satisfaction varies with vehicle segment. The van

In the scooter segment, Honda Activa I (844) ranks highest segment (883) leads the market this year, while SUV scores
among executive models. lowest (848).
• Tyre quality improves with a very low problem incidence
In the motorcycle segment, debutant Honda Livo and TVS rate of 4% compared with 8% last year.
Sport rank highest in a tie (842 each) among economy models, • The study finds that 84% of owners who are highly
and Hero Super Splendor (836) ranks highest among executive satisfied (overall satisfaction of 962 and above) with their
models. Bajaj Avenger 150 (846), a debutant model, ranks original tires say they "definitely would" recommend their
highest among upper executive models while another tire brand. Among customers who are less satisfied (820
debutant model, Honda CB Hornet 160R (858), ranks highest and below), only 35% say they "definitely would"
among premium models. recommend their tire brand.
Study Rankings
The 2017 India Two-Wheeler Automotive Performance, Ceat ranks highest in overall customer satisfaction (893) and
Execution and Layout (2WAPEAL) Study is based on performs well in the appearance factor. MRF ranks second
evaluations from 9,406 owners who purchased a new (878).
vehicle between March 2016 and October 2016. The study The 2017 India Original Equipment Tyre Customer Satisfaction
includes 87 two-wheeler models from 10 makes, and was Index (TCSI) Study is based on 3,346 responses from new-
fielded from September-December 2016 in 45 cities across vehicle owners who purchased their vehicle between May
India. 2014 and August 2015. The study was fielded between May
and August 2016
Ceat Ranks Highest in India for Original
Equipment Tyre Customer Satisfaction

Another study by J D Power i.e. 2017 India Original
Equipment Tyre Customer Satisfaction Index (TCSI) released
on March 28, reveals that lower visibility of tyre brands
among customer affects their relationship and confidence
with those brands.

The study, now in its 17th year, measures satisfaction among
original equipment tyre owners during the first 12 to 24
months of ownership across four factors: appearance; ride;
durability; and traction/handling.

The study finds that 34% of customers cannot recall their tire
brand. Further, only 58% of these customers say they
“definitely would” repurchase the original brand, as compared
to 65% of those customers who could identify their brand. In
addition, the preference for OE-fitted tyre brand replacement
has declined in the past five years to 46% in 2017 from 54% in
2013.

“Since tyre brand perception is a key driver when considering
replacement tires, it may be prudent for the tire
manufacturers to better engage with customers during the
early stages of vehicle ownership,” said Kaustav Roy, Director,
J D Power. “A positive product experience, coupled with
sustained customer engagement, is likely to help drive the
replacement demand.”

21 April 2017





Insight

hard to work with our dealers to listen to them. So between factory plans. He was once a factory guy running BMW’s
that and focusing on the customer and not the quotas, it is captive finance arm. Now, as a retailer, Robinson avoids
the right way to go.” chasing automaker quotas for incentives because “I will have
Several other automakers declined comment or did not return to restructure my whole business.”
calls about the topic. Robinson’s group has eight dealerships that sell 15 brands,
mostly luxury. He wants to boost new-car sales but doesn’t
Not an option? want to heavily discount the cars to hit quotas. He needs
profitability per unit sold, he said.
Land Rover dealer profits closely tied to targets “It is a juggling act, but the long-term effect of relying
For some brands, participation in incentive programs is not completely on manufacturer bonuses will put the company
optional if a dealer wants to stay in the black. out of business,” Robinson said. “If you can’t make money in
“I know for a fact, if you’re not image-compliant, you’re not the new-car department, how are you going to keep
profitable with Land Rover, period,” said buy-sell adviser employees? I have to make a payroll every month.”
Johnson, after having seen many Land Rover dealers’ financial Earlier this year, Robinson froze the number of vehicles allowed
statements. in the company’s service loaner fleet to dissuade managers
He said Jaguar Land Rover’s Business Builder program is a from buying vehicles in pursuit of volume, then putting them
moneymaker for those dealers whose store meets the factory’s in the loaner fleets. He expects that move to trim his annual
image requirements. The tiered plan pays an incentive to floorplan costs by 15 to 20 per cent, he said.
dealers who meet image standards while also meeting targets Ciccolo and Robinson, like many dealers, resent automakers
such as customer satisfaction and sales volume. offering salespeople spiffs for hitting factory-set targets.
A dealer could earn at least $4,500 from the factory on the “Where’s the loyalty — to the dealership group, or to the
sale of a $100,000 vehicle, Johnson said. But program terms manufacturer?” Robinson said. “If the manufacturer wants
are strict, and a dealer might lose thousands of dollars due to to start paying our employees, then they can take on our health
the fine print, he said. For example, in some cases, if a dealer care expenses, too.”
sells a vehicle to a customer who lives in another JLR dealer’s
assigned territory, the selling JLR dealer may not qualify for Wary acceptance
the factory incentive on that sale.
The program does allow for a dealer to sell a certain factory- Some brands’ programs change stores’ car prices
set percentage of vehicles to customers from an unassigned Some dealers discard a brand that overemphasizes factory
territory, a JLR spokeswoman said. “As a result, almost 100% incentive programs. The Flemington group’s Kalafer sold his
of the network currently achieves their targets,” she said. Nissan store, Flemington Nissan, in May 2016.
The store, which he’d had for 36 years, was historically
Different strategies profitable. But he no longer wanted to chase factory
incentives. The programs had reached a “level of irrationality,”
Penske values factory perks; smaller group opts out that was destroying the brand value for customers and retailer.
For dealers with strong fixed operations and big scale, such as “A consumer could walk into three different Nissan dealerships
Penske Automotive Group, factory incentives are valued perks. in their market within one hour and get a price on a $36,000
“We rely on bonuses, but they’re not the reason we’re vehicle that might vary by $7,000 to $10,000,” Kalafer
profitable or not profitable,” said CEO Roger Penske. “It’s said. However, he still owns an Infiniti store because that
certainly a portion of our bottom line. There’s no question brand’s value remains strong.
about that.” Many dealers have a love-hate relationship with factory
Penske said factory incentive programs are now a part of the programs, said Appleton, of the New Jersey dealer coalition.
“DNA of the industry.” For example, Penske Automotive Most warily accept that it’s the way of selling cars today.
bought a store last year and, as part of the deal, it agreed to “There are some dealers who see this as an existential crisis
the manufacturer’s request to upgrade the facility. The to the point that they don’t see a future in the car business.
manufacturer is “holding back 2% of my margin until we’re They are a small minority,” Appleton said. “The rest of the
complete,” Penske said. “They accrue it, so we’ll ultimately dealers have concern, but they have confidence that whatever
get it, but those are the things the manufacturers are doing the rules of the game are, they’ll learn them and they’ll learn
to be sure that you meet many of the requirements.” how to win. I hope they’re right.”
Ed Robinson, CEO of Midwestern Auto Group, is familiar with

April 2017 24



New on Wheels

Tata Motors Launches ‘StyleBack’ TIGOR

Tata Motors announced on March 29, the commercial launch unexpected, setting new trends. It expresses a youthful
of its ‘StyleBack’, Tata TIGOR, at a starting price of Rs. 4.70 mixture of design, style and attitude. It is designed to offer
lakh for the Revotron 1.2L (Petrol) and Rs. 5.60 lakh, for the high performance and connects modern India and its global
Revotorq 1.05L (Diesel) variant, Ex-Showroom, Delhi. citizens.”
With its stunning, break-free and revolutionary design, Tata With a renewed focus on design, Tata Motors is recapturing
TIGOR is set to build on Tata Motors’ existing passenger vehicle the consumer mind space, which is helping the company to
portfolio and address needs of the ever evolving customer. strengthen its brand proposition. Creating an immediate and
Guenter Butschek, CEO & MD, Tata Motors, said, “With our lasting impact, Tata Motors has worked intricately on the
passion to shape the mobility of tomorrow, we have constantly styling of the TIGOR, the 3rd vehicle based on the IMPACT
pushed the boundaries of automotive engineering by creating Design philosophy. The TIGOR is smartly designed on the
new category vehicles. This pursuit of something different led outside with ‘Expressive’, ‘Exciting’, and ‘Extraordinary’
us to what we call ‘STYLEBACK’ – as our re-definition of the exterior features. Its lively and dynamic stance exudes the
compact sedan category. TIGOR is not just a new product; it is feeling of youthfulness. On the inside, the TIGOR makes
a true reflection of our legacy of creating something ‘INtelligent’ use of space and has ‘INviting’ interiors and
connectivity features that will make owners feel ‘INtouch’ with
• India’s 1st StyleBack: Stunning , break-free and the world inside and outside.
revolutionary design with a lively and dynamic stance. The car is intelligently engineered with superior legroom and
24 utility spaces to provide ample storage to carry one’s world
• Signature split LED tail lamp ,trendy crystal-like, smoked along. The stylish design is complemented by enhanced
projector headlamps & stylishly integrated high performance and driving dynamics.
mounted LED stop lamp. Understanding the constantly evolving needs of customers,
connectivity forms the core of Tata Motors’ infotainment
• Inviting cockpit with a layered design theme and fine experience. The company has worked closely with HARMAN
textures. to design and engineer an acoustic audio and infotainment
system, certified by the globally renowned Golden Ears and
• Exquisite dual-tone interiors with premium finish. tuned by seasoned Harman audio experts.
Luxurious patterned seats with bolsters. Available in 8 variants (with 2 optional variants) XE 1.2 P, XT
1.2 P, XZ 1.2 P, XZ (O) 1.2 P, XE 1.05 D, XT 1.05 D, X Z 1.05 D and
• Connectnext Touchscreen Infotainment system – 8 XZ (O) 1.05 D, TIGOR will come in six exciting colour options -
speakers, voice command recognition for the automatic Copper Dazzle, Espresso Brown, Pearlescent White, Platinum
climate control, phone and media controls. Silver, Striker Blue and Berry Red. TIGOR will come with a
standard warranty of 2 years or 75,000 kms, whichever is
• Dual airbags, ABS & EBD with CSC (Corner stability earlier, with an option to further extend.
control) & reverse park assist with camera.

• Next-gen 1.2L Revotron Petrol and 1.05L Revotorq Diesel
engines with multi drive modes.

• Dual path front & rear suspension for perfect balance
between a comfortable ride & superior handling.

• Efficiently designed boot with wide & clear opening
A• priUulsn2inm0g1ait7ncnhoevdatcivoem4fobratr mwietchh2af6unlislymaauntdom41a9tLedof space.
climate
control, superior legroom & 24 intelligent utility spaces.









Upgrades & Variants

Honda Introduces 2017 Edition of DIO

Honda Motorcycle & Scooter India Pvt Ltd (HMSI) introduced Upping the sporty looks of NEW Dio are the exciting bigger
the 2017 edition of its youthful moto-scooter DIO with new graphics on the front and side panels. New sharpness comes
style, colours, convenience and BS-IV and AHO compliance. from the attractive dual-tone coloured body in 4 metallic
Honda’s Dio is not only India’s 3rd largest selling scooter but colour options of new Dio with the matt colour option
also the No. 1 exported scooter from India and also the No. 1 remaining classy as ever.
export model for HMSI. Technologically ahead of time
Y S Guleria, Sr VP - Sales & Mktg, HMSI said, “The 2017 edition Powered by Honda’s trusted 109 cc Honda Eco Technology
of DIO gets a complete style makeover with its new LED (HET) engine, 2017 DIO is equipped with Combi Brake System
position lamp, contrasting dual-tone colour body, bolder (CBS) with Equalizer technology.
sportier graphics and 2 new colours. With more convenience Colours, Variants & Price
of mobile charging socket and compliance with both BS-IV The 2017 edition of Dio comes in 5 colours. This includes 2
emission norms and AHO; the new edition of Dio is fresher new attractive colours - Vibrant Orange & Pearl Sports Yellow
than ever before and the perfect partner for trend setting in addition to the existing 3 colours (Sports Red, Candy Jazzy
youngsters of today.” Blue and Matte Axis Gray Metallic).
New look and new features The 2017 Dio is available for sale at Rs. 49,132 (Ex-Showroom,
Adding to the uber-trendiness of new Honda Dio are host of Delhi).
features.

MARIKAR GROUP OF CONCERNS

DSK Benelli Motowheels Pvt Ltd - Benelli Motorcycles; Eicher Motors Ltd - Royal Enfield Motorcycles; Honda Motorcycle & Scooter
India Pvt Ltd - Honda Motorcycle & Scooters; Mahindra First Choice Wheels Ltd - Pre-Owned Cars; Nissan Motor India Pvt Ltd - Nissan
Cars and Datsun Cars; Skoda Auto India Pvt Ltd - Skoda Cars; Canon India Pvt Ltd - Canon Products; Gabriel India Ltd; NXT Automart
(India) Ltd - Drivol, Duracell, FIAMM, Bluechem; PETRONAS Lubricants (India) Pvt Ltd; R&R Textile - Ramraj, Ramyyam; TIDC India Ltd;

and Whirlpool of India Ltd - Home Appliances.
Branches: Alappuzha, Aluva, Attingal, Chavakkad, Cochin, Irinjalakuda, Kalamassery, Kollam, Kozhikode, Kulasekharam, Marthandam,

Nagercoil, Nedumangad, Pathanamthitta, Thrissur, Trivandrum and Varkala.
Phone: 0471 - 2477420, 2471814, 2465882 | Hotlines: 9961 88 9000 | Fax: 0471 2462630 | e-mail: [email protected]

31 April 2017

News Basket

Changes in Top Management of Honda Motorcycle & Scooter India

Honda Motor Co. Ltd announced a top management change a Superbrand and Most Trusted Brand (Gold Award for two-
in Honda Motorcycle & Scooter India Pvt Ltd (HMSI) with the wheeler category) and is now among Top 50 Most trusted
appointment of Minoru Kato as new President & CEO, HMSI Brands (Economic Times Brand Equity survey 2016).
with effect from 1st April 2017.
After spearheading Honda’s Indian two-wheeler operations Introduction of Minoru Kato
for six years, Keita Muramatsu, the current President & CEO, Minoru Kato will assume charge as the
HMSI will move on to assume a new role as Executive Vice new President & CEO of HMSI from
President – American Honda Co. Inc. 1st April 2017, replacing Keita
Highlights of Keita Muramatsu’s career in India Muramatsu.
Born in 1965, Minoru Kato started his
During Muramatsu’s 6-year tenure in career in Honda Japan from 1988 in
India, HMSI rapidly grew to become the production control division of
# 1 contributor to Honda’s two-wheeler automobile operations at Saitama
sales globally for the first time ever in plant. From 1994 to 1998, he moved
2016. to motorcycle operations at Japan
Under his vision, HMSI aggressively headquarters, where he was involved
invested in “Make in India” and expanded in planning & subsequently in
from single manufacturing plant in domestic sales.
2010-11 to 4 plants by 2016-17. In 2001, Minaru Kato held the position of Manager at Honda
By strategically meeting customer Thailand. Four years later, he gained more experience of Asia
demand with supply, HMSI’s sales sky- Oceania region by taking over the same responsibility in Honda
rocketed 200% from 16.56 lakh units Indonesia. In 2007, he returned to Japan in business planning
(FY’11) to planned 50 lakh units (FY’17). division of motorcycle operations.
Under his leadership, HMSI successfully doubled its market Later in October 2011, he shifted base to UK as the CEO of
share from 13% to 27% and rose from 4th position to become Honda Motor Europe Co. Ltd.
2nd largest two-wheeler company in India in just 6 years. And most recently, Minoru Kato held position as the CEO of
During his stewardship of HMSI, Keita Muramatsu was Honda Vietnam Co. Ltd from April 1, 2014.
recognized as the ‘Best CEO Multi-National Company’ by In his 29 years of experience within Honda, Kato brings with
Forbes India and brand Honda 2-Wheelers was recognized as him domain expertise from production control to motorcycle
planning, sales across Europe and Japan, and South East Asia.

Hyundai Motor India Announces Elevation of Senior Officials

Hyundai Motor India Ltd (HMIL), the country’s second Rakesh Srivastava, Sr Vice President – Sales & Mktg has
largest car manufacturer and the largest passenger car been elevated as Director – Sales & Mktg division, while
exporter announced on April 12, the elevations in its senior Ganesh Mani S, Vice President – Production division has
leadership team. been promoted as Sr Vice President – Production. Vikas
Jain, Sr General Manager – Sales division, has been elevated
Rakesh Srivastava Ganesh Mani S Vikas Jain as Assistant Vice President – Sales. The promotions are
effective April 1, 2017.
Congratulating the promotees, Y K Koo, CEO & MD, HMIL
exhorted them to intensify their excellent work by providing
leadership to their teams to work towards HMIL’s long term
vision of achieving market leadership, being the most
beloved & trusted brand, providing a modern premium
brand and in due process HMIL evolving as a great place to
work.

April 2017 32

News Basket

Datson GO and GO+ Special
Anniversary Edition Launched

Celebrating three years of fulfilling the dream of owning Jerome Saigot, Vice President, Datsun Business Unit said, “This
accessible mobility and building trust with its valued year Datsun marks its third anniversary in India. To say “thank
customers, Datsun announced on April 10, the launch of you” to entice new fans of the brand to choose Datsun, we
special anniversary limited editions of Datsun GO, priced at are planning a series of customer benefit schemes to draw in
Rs. 4.19 Lakh and Datsun GO+ at Rs. 4.9 Lakh (Ex-Showroom, more people to discover what Datsun has to offer.”
Delhi) As part of the celebration marking its three great years of
Commenting on the launch of the Datsun anniversary editions, existence in India, Datsun India will run a social media
Arun Malhotra, MD, Nissan Motor India, said, “The Datsun campaign that invites existing customers to share their
brand is winning over more and more customers, who are interesting stories of family times involving their Datsun
seeking accessible mobility. We are celebrating our three vehicles under the #UnitedByDatsun theme.
successful years with the launch of special anniversary editions Datsun GO and GO+ are loaded with features like follow-me-
of GO and GO+ and activities around our Datsun model range. home headlamps, speed sensitive electric power steering,
Congratulations to the Datsun team for this milestone and powerful air conditioning, front power windows, universal
special thanks to all our customers across India.” mobile phone holder, auxiliary-in and USB charger ports, and
The anniversary editions of GO and GO+ come with a first- central locking and full wheel covers. Both models come with
in-segment Ambient Lighting app for mobile phones with a two year/unlimited kilometres warranty with Free Road Side
which a customer can choose the mood lighting of the car’s Assistance. The warranty can be extended up to an industry-
cabin to suit his or her taste. Coupled with eye-catching body leading five-year/unlimited kilometres with Free Road Side
graphics, a unique Anniversary Edition badge, and a sporty Assistance, making Datsun the first manufacturer to provide
black rear spoiler on the exterior, the interior features vivid unlimited mileage coverage under the extended warranty.
blue inlays on the passenger seats that match the blue trim
around the centre console. Additionally, anniversary floor
mats, art leather seats, a keyless entry system, Bluetooth
connectivity, rear parking sensor, radio and USB connection
features all culminate to add flair and convenience to the
interior space.

Tata Motors Bags Order for 500 Buses from Ivory Coast

After having bagged an order for 500 new next-generation Built on Tata Motors next-generation HCV (Heavy Commercial
low-floor Urban city buses from the Ivory Coast, Tata Motors Vehicle) bus platform, Tata LPO 1924 RESLF Abidjan’s next-
handed over the first lot of 117 buses to SOTRA in Côte generation bus has been developed with inputs from SOTRA,
d’Ivoire’s economic capital, Abidjan on April 5. The buses are with a high degree of customization based on feedback
being financed under the EXIM Bank of India for operation by gathered through city trails, over the last couple of months.
SOTRA – Abidjan Transport Company.
Rudrarup Maitra, Head International Business – CV, Tata
Motors, said,"We are extremely proud to have received this
order from SOTRA and has worked very closely with them to
give Abidjan, a truly world-class solution, through a tried and
tested partnership meant to bring about change in the
transport system in Cote D’Ivoire. With a dedicated team of
Tata Motors engineers, having worked with SOTRA on-ground
over the last 12 months, we have probably achieved one of
the highest levels of customization in public transportation in
the region, to deliver more passenger comfort, safety and
efficiency to Abidjan’s bus service."

33 April 2017



News Basket

Suzuki Two-Wheelers Rolls Out Its Third Millionth Vehicle

Suzuki Motorcycle India Pvt Ltd (SMIPL)achieved a significant continued customer confidence and support & dedication
production milestone by making in India its third millionth of our employees, dealers and suppliers. Our vehicles have
vehicle at its plant in Gurgaon, Haryana on April 17.

The success of Gixxer series and the New Access 125 along gained immense popularity by fulfilling our commitment
with the other models in scooter and big bike segments to quality across markets. We have witnessed a rapid
have paved the way for this milestone. Coupled with that, growth since the past few years and we are confident about
innovative technology & quality and product further reinforcing our position in the market.”
advancements have enabled the company’s progress
towards the 3-million mark. Suzuki Motorcycles India also
extended its market presence through increased customer
outreach and inauguration of new dealerships in India as
well as by exporting vehicles to the overseas market.
Currently operating at a manufacturing capacity of
540,000 units per annum, Suzuki Motorcycles India aims
to further increase its production volume to raise its
operational benchmarks.

Speaking about this auspicious milestone, Satoshi Uchida,
MD, SMIPL, said, “We are delighted to have achieved this
remarkable feat which stands as a testament to the

Toyota Bags the National Exporter Award for FY 2015-16

Recognised as Top Exporter for over 7 years consecutively representing at National Level

Toyota Kirloskar Motor (TKM) was conferred the Top C K Srikantha, Deputy General Manager (Indirect Taxation
Exporter Award for the year 2015-16, at the 48th and Impex), Toyota Kirloskar Motor received the award
Engineering Export Promotion Council of India (EEPC) from P Benjamin, Minister of Rural Industries & MSME,
National Awards for Engineering Export Excellence. The Government of Tamil Nadu at an award ceremony held in
company was honoured as “Star Performers under Product Chennai on April 17. Toyota carries the distinction of
Group-Automobile Component” for its outstanding bagging the Export Excellence award (by EEPC) for 10 years
contribution towards exports. at the Southern Region level, and 7 years at the National
level, reiterating its contribution to the Indian economy,
by exporting globally competitive and best-in-class auto
parts & vehicles.

Raju B Ketkale, Sr Vice President, TKM, said, “We are
delighted to receive this prestigious award. It is a boost to
our efforts in designing & developing the best-in-class cars
of the highest standards in India. As a company that is
strongly committed to the ‘Make in India’ campaign, we
will continue to build focus on our manufacturing abilities
in India and also maintain global standards through all
processes.”

EEPC India is the premier trade and investment promotion
organization in India, sponsored by the Ministry of
Commerce & Industry, Government of India, catering to the
Indian engineering sector

35 April 2017





Fuel Watch

with OPEC laughs all the way to the bank. Then, finally, the As we have explained, crude oil prices now trade as any
day dawned when OPEC struggled to get 50% compliance from other commodity, based on supply and demand. For 4
members regarding supply cuts- except Saudi Arabia and decades, OPEC has managed to control the supply and
Kuwait, that is. Then quietly on the sidelines, Russia, which prices but this is now over. OPEC is the proverbial boy
isn't a part of OPEC, overtook Saudi Arabia as the world's who cried wolf and today no-one pays attention any
number 1 oil producer. OPEC members inner trust irreversibly longer.
fell on the wayside. President Trump makes due on energy promises
Now, did the egos fall and crash too? OPEC was aware of losing For the US to grasp the much sought after freedom from
ground and hastened to cut deals. This year, OPEC and few imported oil, it needs to increase domestic oil and gas
non-OPEC producers settled to reduce production by 1.8 production even more. The other way is to enable a drastic
million barrels per day. In particular, OPEC sitting to bargain and sudden increase in oil prices so that the oil companies
with Russia was a sweet sight for sore eyes. We know how earn profits and drill more. Still, more production also means
hard Russians are at bargaining. What did OPEC give in return? more supply and lower prices. Then the oil companies will
Probably the Moon. run on loss and stop drilling, which will ultimately reduce
OPEC, to put it kindly, is in dire straits. Ironically, OPEC has production. Which bring us to the question, which way will,
only itself to blame. When the shale wave hit the US, OPEC the man of the moment, President Trump go? We know that
faced serious insecurities. Easier way would have been to he is a friend of fossil fuels.
eat a pot of ice cream and concentrate on their business. With regard to energy, he had promised to cut taxes and ease
But we are talking about OPEC. Vigorous oil production in environmental regulations so that the US would enjoy an
the US is OPEC's worst fear. OPEC planned to carpet bomb energy boom. Some argue that regulation costs are bit too
the shale oil boom in the US by flooding the world market small for oil companies to make any visible changes.
with cheap oil, causing oil prices to drop to a level impractical Considering how the previous administration was adamant
for shale producers. Of course, there were reverberations on cutting drilling on Federal lands with strict policies on fossil
on the US shore. From job cuts to bankruptcies, US saw it fuels, the present administration is a contrast in study. Already,
all. Oil went below the $30 mark and oil production slowed President Trump has signed executive orders paving way for
down too. What OPEC didn't count on was the rebound and completion of Dakota Access and Keystone XL oil pipeline.
stabilization that happened faster than expected. Many oil Similarly, there are other pipelines that would see the light of
companies hibernated through the storm and weatherd it. the day, thanks to Trump. Thus, much needed infrastructure
Others acquired struggling producers and got just bigger and is coming into place. The job plan of Trump to bolster
stronger. Also, shale extraction got - relatively - cheaper with infrastructure has made a definite start, so. Also, pipelines
advances in automation technology. For the record, drilling are more environmentally friendly and safe than truck or
has picked up, the rig count has increased and the US is shipping than current rail.
building Keystone XL. So, going forward the US will depend US still imports about 7.9 million barrels of crude a day. As
even less on OPEC. Furthermore, crude production in the you can see, energy independence is still some time away.
US is all set to grow by 360,000 bpd in 2017 and increase to Far yet so near. And, when the oil boom is unleashed, as
1 million bpd in 2018. That must have dropped a few jaws Trump has promised, we'll see another spike in oil and gas
OPEC-side. drilling. Of course, the rig count and oil production has
Irreversibly OPEC is losing its hook on how oil prices behave. risen.
When it announced production cut for the first six months of Recently the President also signed the Energy Independence
2017, oil would have breached the $80 mark under 2014 executive order that, apart from providing solid support to
market circumstances - but under 2017 market circumstances, the coal industry, seeks to undo many of the Obama-era
oil prices barely reacted. climate change regulations. Goodbye regulation, hello
Unsurprisingly - if not out of sight - the most hurt has been progress. So, the ban on coal leasing on federal lands is gone.
OPEC countries more than western economies. All OPEC Rules governing methane emissions from oil and gas
nations are in dire need of funds to balance budget and avert production have been relaxed. The Clean Power Plan that
the unrest of populations dependent on state welfare fuelled requires states to cut carbon emission is out the window too.
by high oil prices. The initial cuts in early 2017 are losing The immediate implications? Job creation in the coal sector is
steam and support. Financial markets see that and this is definitely debatable simply because natural gas is more easily
priced in.

April 2017 38

Fuel Watch

available and is cheaper - in short natural gas has already by leap and bounds. As we mentioned earlier, by 2018 US
supplanted coal, is here to stay, and Federal regulation cannot crude production will hit a million bpd. The recent attack on
change that. the airbase in Syria by the US does raise eyebrows as Syria
On course, lower oil prices and energy security. lies just next to Iraq, OPEC's second largest oil producer. That
Gasoline on the horizon said, the strike was on a single airbase and Syria role in oil
This summer, a robust demand was expected for gasoline production is nil. So, the spike is shorter. The same goes for
because of more drivers on the road. However, the anticipated Libya's Sharara oilfield that was shut down for reasons yet
seasonal spike in gas prices didn't happen in March. In fact, unknown. On a world stage, the shutdown isn't big enough
for the first time since 2009, the average price of gasoline was to cause visible changes.
cheaper than on February 15 when, historically, gasoline prices At a time when OPEC is struggling to receive compliance from
hit the lowest. member countries, the picture of oil in the US is brighter and
With spring, gasoline prices did increase with the demand. will remain so for years to come. Even if OPEC extends
The average price increased by 8 cents gallon compared to production cuts beyond June, world crude prices will remain
March. The present price is the highest since September 2015. low. Of course, the 'once upon a time' powerful cartel fell into
Conclusion the grave it dug for the US. The big question remains, will it
Thanks to fracking, oil production in the US has been soaring. creep out?
By and by, cost of shale extraction continues to get cheaper. To sum up: Imports from Canada has risen along with domestic
Despite cuts by OPEC and Russia, U.S. oil supplies have grown oil production, supply is steady, stockpiles are brimming with
oil, drillers are adding rigs, so going forward, we forecast oil
prices to oscillate in a narrow band

39 April 2017

Consumer Case Studies

National Consumer Disputes Redressal Commission, New Delhi

Dr B C Gupta, Presiding Member and Dr S M Kanitkar, Member

M/s Mahindra & Mahindra Financial Services Ltd & Ors - Petitioners

Versus

Ramesh Sawant – Respondent

Revision Petition No. 3355 of 2007 Decided on 07.03.2017

(Against the Order in Appeal No. 24/2005 dated 07.06.2007 of the State Commission Himachal Pradesh)

Consumer Protection Act, 1986 – Section 15, 17, 19 and 21 – Financial Services – Hire-Purchase – Repossession of vehicle
due to non-repayment of loan amount – OPs directed to return vehicle – OPs also burdened with damages of Rs. 10,000
along with cost of litigation of Rs. 3,500 – Allegation raised by Opposite Parties that certain cheques issued by Complainant
had bounced, has not been denied anywhere – Complainant has not been able to produce on record any evidence about
deposit of money in cash – It was duty of Complainant to make efforts to repay amount due from him and then to get back
delivery of vehicle – However, nothing of that sort seems to have been done by Complainant – Orders passed by Consumer
Fora below do not reflect a correct appreciation of facts and circumstances on record and hence, these orders are perverse
in eyes of law – Contention raised by District Forum that use of coercive methods and obtaining forceful possession of
vehicle amounts to unfair trade practice, is not tenable in eyes of law – Impugned orders set aside and consumer complaint
dismissed. (Paras 9 to 12)

Important Point

Repossession of vehicle due to non-repayment of loan amount is justified.

Order

1. Dr B C Gupta, Presiding Member - This revision petition 1,15,440, but the vehicle was repossessed by the OPs on
has been filed under section 21(b) of the Consumer 20.03.2003 for non-payment of some of the instalments
Protection Act, 1986, challenging the order dated of the loan. The Complainant filed the consumer
06.07.2007, passed by the Himachal Pradesh State complaint in question, seeking return of the vehicle, or
Consumer Disputes Redressal Commission, Shimla in the alternative to refund the amount of Rs. 3,74,190
(hereinafter referred to as “the State Commission”) in First plus Rs. 1,15,440 along with interest, damages, cost of
Appeal No. 24/2005, Mahindra & Mahindra Financial litigation etc.
Services Ltd & Ors Vs Ramesh Sawant, vide which, while
dismissing the appeal, the order passed by the District 3. The complaint was resisted by the OPs by filing a reply
Consumer Disputes Redressal Forum, Shimla on before the District Forum, in which they stated that the
11.01.2005, allowing the consumer complaint no. 117/ District Forum had no jurisdiction to try the complaint
2003, filed by the present Respondent, was upheld. and the Complainant was not a consumer, because the
vehicle was being used for commercial purposes. It was
2. Briefly stated, the facts of the case are that the also stated that the vehicle had been rightly repossessed,
Complainant purchased a Mahindra & Mahindra Utility because of default by the Complainant in making payment
vehicle, bearing Registration No. HP09 4286 under hire- of the instalments in time. The Complainant had agreed
purchase agreement with the Opposite Parties (OPs)/ to pay hire charges of Rs. 10,965 only for the first 17
Petitioners. The Complainant made a lumpsum payment months and thereafter, to pay hire charges of Rs. 7,727
of Rs. 1,15,440 on 11.05.2000 to the OPs. The OPs every month for the balance 18 months, failing which,
provided a loan of Rs. 2,55,000 on which, the Complainant late charges equal to 3% per month on the hire charges
was to be charged an interest of Rs. 70,491. The amount were to be paid. The OP stated that they had received
of Rs. 2,55,000 along with Rs. 70,491 was to be repaid by only 27 hire charges from the Complainant and the same
the Complainant in 35 instalments, the last instalment were also highly delayed. Despite persistent follow-up
being payable on 31.03.2003. It is stated that the OPs and calling upon the Complainant to pay the outstanding
charged a sum of Rs. 3,74,190 inclusive of a sum of Rs. amount, he failed to pay the dues to the OPs, who were

April 2017 40









PASSENGER VEHICLE SALES - MARCH 2017

Domestic Sales Mar-17 Mar-16 Growth Y-o-Y (%) Exports Mar-17 Mar-16 Growth Y-o-Y (%)
0 8-
OEM 353 751 -53.00 OEM
317 Fiat India 16,132
Fiat India 8,700 345 -8.12 Ford India 6,146 13,638 18.29
Force Motors 1,318 General Motors 145
Ford India 69 7,499 16.02 Honda Cars 10,857 6,992 -12.10
General Motors 18,950 Hyundai Motor 6
HM Finance Corp 44,757 3,044 -56.70 Isuzu Motors 795 192 -24.48
Honda Cars 134 Mahindra
Hyundai Motor 25,352 126 -45.24 Maruti Suzuki 11,590
Isuzu Motors 127,695 Nissan Motor 12,928
Mahindra 5,309 17,430 8.72 Renault India 10,251 5.91
Maruti Suzuki 12,188 Tata Motors 1,214
Nissan Motor 1,696 41,201 8.63 Toyota Kirloskar 318 --
Renault India 17,093 Volkswagen 636
Skoda Auto 13,796 62 116.13 1,045 -23.92
Tata Motors 4,792 Total 10,789
Toyota Kirloskar 26,885 -5.70 10,450 10.91
Volkswagen 282,519 71,556
118,895 7.40
Total
4,378 21.27 9,743 32.69

12,424 -1.90 37 3,181.08

1,405 20.71 513 -38.01

11,268 51.70 1,376 -53.78

7,637 80.65 7,765 38.94

3,570 34.23

256,920 9.96 62,010 15.39

Domestic Sales + Exports

OEM Mar-17 Mar-16 Growth Y-o-Y (%)

Fiat India 353 759 -53.49 Segment wise (Domestic Sales + Exports)
Force Motors 317 345 -8.12
Ford India 24,832 21,137 17.48 Category Mar-17 Mar-16 Growth Y-o-Y (%)
General Motors 7,464 10,036
HM Finance Corp 69 126 -25.63 Cars 247,944 223,159 11.11
Honda Cars 19,095 17,622 -45.24
Hyundai Motor 55,614 51,452 UVs 91,340 78,688 16.08
Isuzu Motors 140 8.36
Mahindra 26,147 62 8.09 Vans 14,791 17,083 -13.42
Maruti Suzuki 139,285 27,930 125.81
Nissan Motor 18,237 129,345 -6.38
Renault India 13,402 14,121 7.68
Skoda Auto 1,696 12,461 29.15
Tata Motors 17,411 1,405 7.55
Toyota Kirloskar 14,432 11,781 20.71
Volkswagen 15,581 9,013 47.79
11,335 60.12
37.46

Total 354,075 318,930 11.02 Total 354,075 318,930 11.02
Source: SIAM

45 April 2017

TWO-WHEELER SALES - MARCH 2017

Domestic Sales Mar-17 Mar-16 Growth Y-o-Y (%) Exports Mar-17 Mar-16 Growth Y-o-Y (%)
151,449
OEM OEM
Bajaj Auto 317
H-D Motor 586,587 176,788 -14.33 Bajaj Auto 92,786 87,461 6.09
Hero MotoCorp 338,856
HMSI 552 -42.57 H-D Motor - 601 -
India Kawasaki 220 583,193 0.58 Hero MotoCorp 23,364
India Yamaha 76,144 365,729 -7.35 HMSI 27,234 23,349 0.06
Mahindra 2W 1,599 47.65 India Yamaha 19,618
Piaggio 4,731 149 15,996 70.26
Royal Enfield 58,549 60,032 26.84
Suzuki 36,029 9,423 108.19
Triumph
TVS Motor 100 7,875 -79.70 Mahindra 2W 3,001 758 295.91
216,995
Total 2,347 101.58 Piaggio 650 --
50,059 16.96 Royal Enfield 1,564
20,670 74.31 Suzuki 6,057 1,261 24.03
-13.79 TVS Motor 32,686
116 8.39 8,652 -29.99
200,200
26,453 23.56

1,471,576 1,467,710 0.26 Total 206,960 173,954 18.97

Domestic Sales + Exports

OEM Mar-17 Mar-16 Growth Y-o-Y (%)

Bajaj Auto 244,235 264,249 -7.57

H-D Motor 317 1,153 -72.51

Hero MotoCorp 609,951 606,542 0.56

HMSI 366,090 381,725 -4.10

India Kawasaki 220 149 47.65

India Yamaha 95,762 69,455 37.88

Mahindra 2W 4,600 8,633 -46.72 Segment wise (Domestic Sales + Exports)

Piaggio 5,381 2,347 129.27 Category Mar-17 Mar-16 Growth Y-o-Y (%)
Scooters/
Royal Enfield 60,113 51,320 17.13 Scooterettes 510,613 472,668 8.03

Suzuki 42,086 29,322 43.53 Motorcycles/ 1,096,788 1,097,290 -0.05
Step-Through
Triumph 100 116 -13.79

TVS Motor 249,681 226,653 10.16 Mopeds 71,135 71,706 -0.80

Total 1,678,536 1,641,664 2.25 Total 1,678,536 1,641,664 2.25
Source: SIAM

April 2017 46



COMMERCIAL VEHICLE SALES - MARCH 2017

Domestic Sales Mar-17 Mar-16 Growth Y-o-Y (%) Exports Mar-17 Mar-16 Growth Y-o-Y (%)
- 14 -
OEM OEM 1,174 1,257 -6.60
AMW Motor 17,508 15,445 13.36 9 9 -
Ashok Leyland Ashok Leyland 6 - -
Force Motors 3,349 3,537 -5.32 Force Motors
Isuzu Motors Isuzu Motors 1,636 2,679 -38.93
Mahindra 127 39 225.64 Mahindra 174 - -
Maruti Suzuki Maruti Suzuki 49
Piaggio Vehicles 22,908 17,438 31.37 SML Isuzu 66 -25.76
SML Isuzu Tata Motors 5,518 5,843 -5.56
Tata Motors VECVs - Eicher 678 -1.60
VECVs - Eicher 689
Total 9,244 -12.32
10,543

304 - -

151 305 -50.49 M&HCVs (Domestic Sales + Exports)

2,045 1,590 28.62 Category Mar-17 Mar-16 Growth Y-o-Y (%)
Passenger Carriers 7,389
Goods Carriers 36,156 7,051 4.79

34,216 35,433 -3.43 34,111 6.00

6,410 5,944 7.84 Total M&HCVs 43,545 41,162 5.79

VECVs - Volvo 239 120 99.17 LCVs (Domestic Sales + Exports)
Total 87,257 79,865 9.26
Category Mar-17 Mar-16 Growth Y-o-Y (%)
2.92
Domestic Sales + Exports Passenger Carriers 7,690 7,472 8.36

OEM Mar-17 Mar-16 Growth Y-o-Y (%) Goods Carriers 45,266 41,774
14 -
Total LCVs 52,956 49,246 7.53

AMW Motor -

Ashok Leyland 18,682 16,702 11.85

Force Motors 3,358 3,546 -5.30

Isuzu Motors 133 39 241.03

Mahindra 24,544 20,117 22.01

Maruti Suzuki 478 - -

Piaggio Vehicles 151 305 -50.49

SML Isuzu 2,094 1,656 26.45 Segment wise (Domestic Sales + Exports)
Tata Motors 39,734 41,276 -3.74
VECVs - Eicher 6,633 6.86 Category Mar-17 Mar-16 Growth Y-o-Y (%)
VECVs - Volvo 7,088 99.17 43,545
Total 239 120 6.74 M&HCVs 52,956 41,162 5.79
90,408 LCVs 49,246 7.53
April 2017 96,501
Total 96,501 90,408 6.74

Source: SIAM

48

THREE-WHEELER SALES - MARCH 2017

Domestic Sales Mar-17 Mar-16 Growth Y-o-Y (%) Exports Mar-17 Mar-16 Growth Y-o-Y (%)
2,878 296
OEM 17,751 3,160 -8.92 OEM 143 106.99
Atul Auto 5,062 Atul Auto 10,132
Bajaj Auto 12,088 27,493 -35.43 Bajaj Auto 224 13,928 -27.25
Mahindra 337 Force Motors Ltd 278
Piaggio 884 4,644 9.00 Mahindra 238 -5.88
Scooters India 39,000 Piaggio 1,536
TVS Motor 13,675 -11.61 TVS Motor 4,478 27 929.63
Total Total 16,944
950 -64.53 2,605 -41.04

1,206 -26.70 4,668 -4.07

51,128 -23.72 21,609 -21.59

Domestic Sales + Exports

OEM Mar-17 Mar-16 Growth Y-o-Y (%)

Atul Auto 3,174 3,303 -3.91

Bajaj Auto 27,883 41,421 -32.68

Force Motors Ltd 224 238 -5.88

Mahindra 5,340 4,671 14.32 Segment wise (Domestic Sales + Exports)

Piaggio 13,624 16,280 -16.31 Category Mar-17 Mar-16 Growth Y-o-Y (%)

Scooters India 337 950 -64.53 Passenger Carrier 44,547 62,466 -28.69
Goods Carrier 11,397 10,271 10.96
TVS Motor 5,362 5,874 -8.72

Total 55,944 72,737 -23.09 Total 55,944 72,737 -23.09

TOTAL VEHICLE SALES SUMMARY (DOMESTIC SALES + EXPORTS) - MARCH 2017

CATEGORY Mar-17 Mar-16 Growth Y-o-Y (%)

PASSENGER VEHICLES 354,075 318,930 11.02
TWO-WHEELERS 1,678,536 1,641,664 2.25
COMMERCIAL VEHICLES 6.74
THREE-WHEELERS 96,501 90,408 -23.09
QUADRICYCLES 55,944 72,737
-
- 130

TOTAL 2,185,056 2,123,869 2.88

Source: SIAM

TRACTOR SALES - MARCH 2017

SALES Mar-17 Mar-16 Growth Y-o-Y (%)

Domestic Sales 48,160 38,671 24.54
Exports 6,982 6,366 9.68
Total (Domestic + Exports)
55,142 45,037 22.44

Source: TMA

49 April 2017





NADA Musings

As Auto Prices Rise, Used Cars Are Looking Shinier

Over the last several years, as the American economy has no-haggle pricing, and promise to fix or disclose any recall
gained steam and consumers have rushed out to buy new issues a used car has.
cars, the average price of a new automobile has edged higher
and higher. Last year, new vehicles, on average, sold for a “More people will look at used if they’ve got peace of mind
record $34,077, according to Edmunds.com, an auto- that you’re getting a fair price,” said Marc Cannon,
information website. That’s a 2.7 per cent increase from 2015 AutoNation’s vice president of marketing.
and a 13 per cent jump since 2011.
Americans purchased 38.5 million used cars in 2016, about
That’s also more than many consumers can or want to pay. the same as in 2015. That includes all used cars, from 20-
The result is that used cars, especially the nearly new models year-old rust buckets to former demonstration models that
that were leased or turned in by their original buyers, dealers sell as “used”, even though they may have fewer than
represent increasingly enticing deals. 100 miles on the odometer.

“It’s very hard to beat the value of a late-model used car,” Sales of certified pre-owned cars rose 4 per cent from 2015,
said Jessica Caldwell, a senior analyst at Edmunds.com. to a record 2.6 million vehicles in 2016, according to
Depreciation is one of the biggest costs of owning a car, she Edmunds.com. Those are cars that are less than three years
noted. “If you buy a used car with low mileage, someone old, generally have under 50,000 miles, and have been
else has already taken the depreciation hit, so it’s a very inspected and serviced by a franchise dealer. They usually
smart way to get a car.” come with an extension to the original warranty.

New-car prices are rising as automakers add more Like new-car prices, used-car prices have also been rising, to
technology. Features like rear cameras, radar sensors, an average of $19,189 in 2016. But analysts think used car
collision-preventing automatic braking systems and prices will ease because inventories are rising. This year,
Bluetooth are now standard in most new cars and trucks. about 3.5 million cars that were leased for two or three years
Americans’ preference for SUVs and other larger vehicles is will be returned and sold as gently used cars, Ms Caldwell,
also pushing prices higher compared with the days when Edmunds.com analyst, said.
less expensive small cars were more in vogue.
One caveat about buying pre-owned cars is that they are
Consumers aren’t the only ones seeing opportunities in used usually not subject to the rebates and discounts
vehicles. In Jackson, Mich, 80 miles west of Detroit, Wes Lutz manufacturers typically offer on new cars. Also, even cars
has just built a 5,000-square-foot addition to his Chrysler that are only a year or two old may not have the latest
Dodge Jeep franchise to accommodate his expanding used- technology. So it pays to shop carefully.
car sales.
Joe Codiroli, a Defense Department consultant in Richmond,
“We’ve hired salespeople and managers because there’s a Va, discovered that last month when he looked for a bargain
lot of demand for used cars,” the dealer principal Lutz said. on a slightly used Subaru Forester. He wanted to get a model
“If you’re looking at a $33,000 price for new, you can get a with EyeSight, Subaru’s safety electronics system, which
similar car for half the price. That’s a great deal, especially includes advanced cruise control with automatic braking and
for people who don’t drive that much, or are first-time car blind-spot warning technology. The used Foresters he found
buyers.” didn’t have those features.

Lutz estimates that he’ll soon be selling 200 or more used On top of that, he found that Subaru was offering zero-per
cars a month, up from the 130, he typically sold per month cent financing on the 2017 Forester. He picked out a reddish
last year. one — a colour Subaru calls “Venetian pearl.”

Other, bigger car dealers are making similar bets. AutoNation, “It came down to a few thousand dollars’ difference between
a chain of 371 new-car franchises, is spending up to $500 new and used,” Codiroli said. “So, the value for the extra
million to set up a chain of used-only outlets. The first opens features and the zero-per cent swayed me to go with new.”
in Corpus Christi, Tex, in May. The company is also trying to
take some of the anxiety out of buying used cars. Its new- And he’s glad he opted for the latest safety electronics. “If a
car franchises now offer pre-owned models with uniform, car cuts in front of me on the highway, it just slows down
nice and easy,” he said. “It’s phenomenal. It’s easier to drive,
and I feel a lot safer.”

April 2017 52