FADA Journal - September 2017

Office Bearers contents

President PRESIDENT’s MESSAGE 7 A Chequered Year
INDUSTRY TRACK 8 Pre-Festive Stocking Boosts Sales Numbers in August
JOHN K PAUL
Popular Vehicles & Services Pvt Ltd ANNUAL REPORT 2016-17 11 FY 2016-17 - An Eventful Year (Annual Report of F A D A Council)
Kuttukaran Centre, Mamangalam, Kochi - 682 025
Tel: +91-484-234 1134 / 7872 / 5013 PERSPECTIVE 16 The Automotive Revolution is Speeding Up
E-mail: [email protected]; OPINION - McKinsey & Co.

[email protected] SURVEYS & STUDIES 21 Growth Levers for Auto Component Industry Intact,
But Commodity Prices Continue to Play Spoilsport: ICRA
Vice President
22 White is the Most Popular Car Colour: SPAREAZE
ASHISH KALE
Provincial Automobile Co. Ltd TECHNOLOLGY 23 Demonetization Diminishes India’s 3.6 Mn Unit Pre-Owned Car
Kingsway, Near Railway Station, Nagpur - 440 001 Market by 6%
Tel: +91-712-391 1129 / 1150 - IndianBlueBook 'Pre-Owned Car Market Report’
E-mail: [email protected];
28 A Shape-Shifting Car? Patent Filings Point to Auto Industry’s
[email protected] Future

Secretary General & Editor, FADA FADA ALBUM 30 Glimpses of FADA’s Activities during the Year 2016-17
Journal

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

ADVERTISERS’ INDEX 60 BLOG 33 Is Your Auto Brand Future-Fit?
NEW ON WHEELS - Nick Bull, Auto Specialist, Kantar Millward Brown
Back Cover
V E Commercial Vehicles 35 • Tata Motors Launches Compact SUV Nexon
• Mahindra Showcases its First Ever Driverless Tractor in India

Front Inside Cover 2 UPGRADES & VARIANTS 37 • Renault India Launches New Duster Sandstorm
Tata Capital Financial Services NEWS BASKET • ŠKODA Introduces Octavia RS 230

Back Inside Cover 59 COMPETITION LAW 39 • Mercedes-Benz Opens Goa’s Largest 3S Luxury Car Dealership
Tata Motors • Hyundai Introduces Factory Fitted CNG in Xcent Prime
• Tata Motors Rolls Out Tata Yodha in Nepal
Inside Pages • Mahindra and Ford to Explore Strategic Cooperation to Drive
Profitable Growth in India
• Mahindra & Mahindra Financial Services 3 • MSIL Rebrands its Sales Channel; Introduces Maruti Suzuki ARENA
• Isuzu Motors Strengthens Dealership Network in Gujarat

• AMPL 4 43 Competition Law Updates - G R Bhatia

• Satyam Centre of Professional Excellence 6

• Popular Vehicles & Services 10 44 NCDRC : Ram Krishna Bharti - Petitioner
Versus
• Marikar Group 20 CONSUMER CASE STUDIES Raman Distributor Pvt Ltd & Anr - Respondents
FUEL WATCH
• United Group of Institutions 32 46 Impact of Hurricanes on Oil Prices
NADA MUSINGS - Steve Austin for OIL-PRICE.NET
• Prime Honda 34
48 Major developments affecting Automobile Industry in US
• HPCL 38 & 51

• Maurya Motors 47

• Bagga Link 50

• Shriram Transport Finance 54

• Carazoo Online Solutions 55 SALES REPORTS 52 Vehicle Sales & Exports and Y-o-Y Growth - August 2017

• SKF Group 58

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



President’s Message

A Chequered Year

Dear friends,

I assumed the office of President of this august organisation roughly a
year back. It would be appropriate for me to take stock of how the year
panned out and the challenges faced by auto retail business during the
year.

There is no gainsaying that it has been an eventful year marked by ups
and downs. When I took over the reins of F A D A in September last year,
the auto market was up on the growth curve, after the fluctuating fortunes
in the previous two years, and the outlook was promising. On 8th November
2016 came the bombshell, when the Prime Minister announced the
demonetisation of Rs. 1,000 and Rs. 500 notes. The demonetisation of
high currency notes temporarily paralysed largely the cash dependent
economy, which, in turn, severely affected the automobile market.

Responding to the dire situation prevailing at that time, F A D A, as a
body of automobile dealers, promptly approached the Government,
OEMs, banks and NBFCs, seeking relief and support for the automobile
dealers, who were facing cash crunch due to the plunge in vehicle sales as a result of the demonetisation. It gives me sense
of satisfaction that F A D A received a positive response from all quarters – Government, OEMs and financial institutions.

As the supply of new currency notes improved, the auto market started recovering slowly, but surely, from the impact of
demonetisation. However, the Supreme Court’s order, unexpectedly and abruptly banning the sale of BS-III vehicles, even
though manufactured on or before 31st March 2017, from 1st April 2017 dealt another blow to the auto market, which led to
the distress sales of BS III vehicles by OEMs and dealers. It took 2-3 months for the commercial vehicles to come out of the
slowdown blues.

Implementation of GST from 1st July 2017 is another major development that has shaken the businesses, which are struggling
to come to grips with the complexities and nuances of the new tax regime. There are a number of issues and grey areas, in
addition to quantum increase in tax rates in some cases, which are bothering the members of automobile dealer fraternity,
as gauged from scores of queries on GST being received from my fellow dealers.

We, in F A D A, are alive to the enormity of challenge arising out of the implementation of GST. A series of seminars on GST
were organised by F A D A in different parts of the country for the education and guidance of its members to ensure smooth
transition to GST without any hiccups. F A D A has taken up various issues relating to GST, of concern to the automobile
dealers, with the GST Council and other concerned authorities in the Government. Simultaneously, a number of measures
have been taken within F A D A to help and guide the members on the implications and intricacies of GST. We have engaged
GST consultants to clarify the members’ queries and tied up with GSTStreet.com for an online training course on GST for
F A D A members. In addition, 30 state-wise, city-wise Whatsapp Groups have been constituted, which enables members
to share their concerns and views on GST and keeps them in the loop in regard to various other developments within the
auto retail business across the country.

I am happy to note that notwithstanding the GST glitches, auto market has performed reasonably well during the last two
months, which is encouraging. Needless to mention, we have successfully negotiated bumps from time to time in the past. I
am sanguine that we shall rise to the occasion again and stand up to the challenge of GST.

With best wishes for the upcoming festive season,

Yours sincerely,

John K Paul

7 September 2017

Industry Track

Pre-Festive Stocking Boosts Sales Numbers in August

Vehicle sales stayed on course, clocking decent sales numbers with strong demand for the Grand i10, Elite i20 and Creta in
in August. Brushing aside the GST glitches and concerns, all a market fuelled with speculations on the GST cess increase.”
the segments of the auto market posted healthy growth. Total
domestic sales encompassing various vehicle categories, Mahindra & Mahindra (M&M)’s domestic passenger vehicle
namely, passenger vehicles, commercial vehicles and 2/3- sales at 19,325 units in August 2017, reflected a 5.9% increase
wheelers, grew by 14.5% to 2,302,158 units during the month over the corresponding sales figure of 18,246 units in August
of August 2017 from 2,010,802 units a year ago. 2016. Rajan Wadhera, President, Automotive Sector, M&M,
commented: “We are happy with our performance in August.
Passenger vehicle sales maintain growth momentum Our passenger vehicles grew by 6% and our overall sales
grew by 4%. As we get into festive season, we are confident of
Passenger vehicle sales were in fast lane during August. The a good growth over the next couple of months.”
sales numbers of passenger vehicles were boosted, to some
degree, by expected increase in prices of mid-segment & Tata Motors, another home-grown player in automotive
luxury-segment cars and SUVs due to impending hike in cess space, clocked domestic sales of 16,261 passenger vehicles,
on these categories of cars. Passenger vehicle sales in the including cars, utility vehicles and vans, in August 2017,
domestic market at 294,335 units in August 2017 posted a which marked a growth of 11.5% over 14,580 passenger
13.8% uptick vis-à-vis 258,737 units in August last year. vehicles sold by the company in domestic market a year ago.
While domestic sales of Tata cars remained flat at 11,462
Setting the pace, the car market leader – Maruti Suzuki India units, the UV sales at 2,878 units, driven by the Tata HEXA,
(MSI), saw its domestic sales grow by a handsome 26.2% to grew by whopping 83.7% y-o-y, albeit on a low base.
151,270 units in August 2017. The company’s exports were,
however, down 4.6% y-o-y to 11,576 units during the month. Honda Cars India Ltd (HCIL), staying on course, registered a
healthy 24.6% growth in domestic sales that stood at 17,365
Apart from flat sales for the entry-level hatchback duo of units in August 2017, (August 2016: 13,941 units). The
the Alto and Wagon R, which sold 35,428 units, other company has been maintaining strong sales momentum in
segments, in which the company is present, witnessed the current fiscal year and has sold 73,012 units during
healthy growth. Domestic sales of quintet of compact cars April-August 2017 with a cumulative growth of over 22% (April-
(Swift, Celerio, Ignis, Baleno and Dzire) soared 62.4% to August 2016: 59,821 units). City sedan returned as the best-
74,012 units in August 2017 (August 2016: 45,579 units), selling car from the Honda stable with sales volume of 5,538
riding on strong demand for the premium Baleno hatchback units, followed by WR-V (5,200 units), Jazz (2,747 units),
and the new Dzire sedan. Baleno sold a total of 19,153 units Amaze (1,928 units), BR-V (1,247 units), Brio (640 units), CR-
in July 2017, its best-ever monthly total since launch in V (55 unitts), and Accord Hybrid (10 units).
October 2015. Ciaz clocked domestic sales of 6,457 units,
up 3.9% (August 2016: 6,214 units. The company’s utility Yoichiro Ueno, President and CEO, HCIL said, “Honda Cars
vehicles – Gypsy, Ertiga, V itara Brezza and S-Cross – India continues to record strong sales in August led by the
witnessing a healthy 27.6% y-o-y growth, contributed 21,442 City and WR-V. Festive purchases have already begun in some
units to the domestic sales tally. parts of the country and we expect the festival season to
The second largest PV player in the country, Hyundai Motor further boost our sales numbers in the next two months.”
India Ltd (HMIL), sold 47,103 units in domestic market during Toyota Kirloskar Motor (TKM) sold 12,017 units in domestic
August 2017, registering a growth of 9.0% (August 2016: market during August 2017, down 6.1% vis-à-vis 12,801
43,201 units). The company’s
exports slid sharply by 22.4% y- Sales (Domestic + Exports) during August 2017 viz-a-viz August 2016

o-y to 12,802 units during the
month. Commenting on the August
sales, Rakesh Srivastava,
Director - Sales and Mktg, HMIL,
said, “Hyundai volumes at 47,103
units grew by 9% on the strong
acceptance of the next-gen Verna
with more than 7,000 bookings
within 10 days of launch along

September 2017 8

Industry Track

units in August 2016. “Our sales numbers this month are Hero MotoCorp clocked its highest-ever sales for any single
not truly reflective of the existing customer orders. After month in August 2017. It sold total of 678,797 units including
the announcement on potential cess hike, there was a exports (17,307 units) during the month. The domestic sales
considerable rise in customer enquiries and orders. Yet, stood at 661,490 units, growing by 10.0% y-o-y. August 2017
we had production limitations, which held us back from marked the fourth consecutive month when Hero MotoCorp
catching up with the high demand, commented N Raja, has managed to sell more than 600,000 units.
Director & Sr VP - Sales & Mktg, TKM. Recording its best-ever monthly sales, Honda Motorcycle &
Ford India witnessed a 9.0% decline in domestic sales that Scooter India (HMSI) sold 622,244 units (including exports)
added up to 7,777 units in August 2017, as against 8,548 in August 2017. This is the first time that the company has
units a year ago. Ford India’s exports were also in negative breached the 600,000-unit sales mark. Domestic sales of HMSI
terrain falling sharply by 55.4% y-o-y to 7,963 units. totalled 586,237 units – up 25.7% y-o-y, which is also its
best-ever performance in the Indian market.
Recovery in CV sales firming up Y S Guleria, Sr VP - Sales and Mktg, HMSI, said, ”On the back
of strong festival demand matched with new additional
Recovering from the disruption caused by implementation of capacity, Honda has breached the 600,000 units sales mark
BS IV norms and GST, commercial vehicles carried forward for the first time in August 2017. At the same time, our strong
the momentum of July to August. At 65,310 units in August overseas demand momentum has resulted in exports crossing
2017, domestic sales of CVs jumped by a healthy 23.2% vis- the 36,000-unit mark. On the domestic front, both scooters
à-vis 53,001 units in August 2016. The recovery was all- and motorcycles touched their highest sales mark.”
pervasive with all major CV players clocking growth. TVS Motor Company, the third largest two-wheeler player in
Commercial Vehicle Business Unit of Tata Motors recorded a the Indian market, sold 270,544 two-wheelers in August 2017,
staggering 35.5% upsurge in domestic sales of Tata trucks growing by 13.2% y-o-y. TVS two-wheeler exports leapfrogged
and buses, which aggregated 29,645 units in August 2017, as by 33.7% y-o-y to 45,604 units during the month.
against 21,886 units in August last year. According to the Pune based Bajaj Auto recorded domestic sales of 171,664
company, the M&HCV segment witnessed a strong pickup in units in August 2017, posting a marginal 1.7% decline vis-à-
demand. The domestic sales of Tata M&HCVs soared by 38.7% vis the company’s domestic sales volume of 174,719 units in
on the back of continuously increasing acceptance of SCR August last year. The company’s two-wheeler exports, however,
technology and driven by the stricter implementation of witnessed a 6.7% rise at 112,197 units in August 2017, as
regulatory norms on overloading, as well as sector-specific against 105,192 units a year ago.
(trucks and construction tippers) demand. India Yamaha Motor reported domestic sales of 77,887 units
Ashok Leyland too reported an impressive 21.6% growth in (including Nepal) in August, a 4.0% uptick y-o-y.
its overall CV sales in the Indian market, which stood at Continuing its dream run, Royal Enfield registered its best-
11,937 units in August 2017 (August 2016: 9,818 units). ever domestic sales of 66,872 units in August 2017, up 22.2%
Domestic commercial vehicle sales of Mahindra & Mahindra y-o-y. The company has recently commenced production at
at 16,303 units during August 2017 were up 16.5%, compared its third manufacturing facility at Vallam Vadagal near Chennai.
to 13,993 units in August 2016. Royal Enfield’s combined production capacity now stands at
VE Commercial Vehicles sold 3,818 Eicher branded trucks & 825,000 units across the three plants for FY2017-18.
buses in the domestic market during the month of August Likewise, Suzuki Motorcycle India too reported robust sales
2017, which marked a 10.7% growth (August 2016: 3,450 in August 2017. The company mustered domestic sales of
units). 47,745 units in August 2017, notching up a stupendous growth
of 49.7% y-o-y.
Two-Wheelers on high growth trajectory Vehicle sales have grown at decent clip in July and August.
Due to the early advent of festive season this year and stocking
Riding on the improving sentiment in rural market, the two- by the OEMs at the dealerships, the retail sales may not be
wheeler sales remained in fast lane. Total domestic sales of entirely in tune with the wholesale numbers. However, the
two-wheelers, across companies, grew by 14.7% y-o-y to normal monsoon rains and steadily growing economy hold
1,891,062 units in August 2017. The two-wheeler exports at out a promising year ahead for the auto market
236,505 units witnessed a 19.8% uptick. Hero MotoCorp
(HMCL), Honda Motorcycle & Scooter India (HMSI), Royal
Enfield and Suzuki Motorcycle India recorded their best-ever
monthly sales.

9 September 2017



Annual Report 2016-17

FY 2016-17 - An Eventful Year

This Report covers annual accounts for the period 1st April 5. Regional Meeting at Jaipur
2016 to 31st March 2017 and important activities & events
of F A D A from 28th August 2017 to 7th July 2017. A Regional Meeting was organised by F A D A at Jaipur
on 22nd April 2017. The meeting was organised jointly
1. Previous AGM with Authorised Motor Vehicle Dealers Association,
Rajasthan (AMVDA). The Regional Meeting at Jaipur
The previous Annual General Meeting of the Federation gave office bearers and council members from other
was held on 23rd September 2016 at Marine Drive, Kochi. States an opportunity to meet and interact with
The Annual Accounts and the Annual Report of the Council dealers in Rajasthan.
for the year 2016-17 were adopted at the AGM. The AGM
also re-appointed M/s Bhatia & Bhatia, Chartered The interactive sessions on (i) GST and (ii) Issues related
Accountants as Auditors for the year 2016-17 and to the Transport Department, Government of Rajasthan
constituted afresh the Council for the year 2016-17 by were highlights of the Regional Meeting. The Regional
elections in terms of Articles 18 & 20 to 29 of Articles of Meeting also honoured the veterans of auto retail trade,
Association. who have made significant contribution to the growth and
development of auto retail business in the State of
2. Council and Office Bearers for the Year 2016-17 Rajasthan, by presenting them the plaques. Other

F A D A Council constituted afresh for the year 2016-17 automobile dealers, who have excelled in CSR activities
at the last AGM, met immediately after the conclusion of were also recognized and presented with the awards.
AGM and elected Mr John K Paul, Mr Ashish Kale, Mr Mr Yunus Khan, Transport & PWD Minister, Rajasthan
Vinkesh Gulati and Mr Saurabh Kedia as President, Vice was the Chief Guest on the occasion. Other distinguished
President, Hony Secretary and Hony Treasurer, guests who participated and interacted with the
respectively, for the year 2016-17. participants at the Regional Meeting were: Mr Shailendra
A list of elected and co-opted Council Members for the Agarwal, Principal Secretary & Transport Commissioner,
year 2016-17 is appended to this Report. Rajasthan; Ms Manisha Arora, Additional Transport
Commissioner; Mr Alok Gupta, Commissioner, Commercial
Taxes; CA Jatin Harjai; Mr Prasanjeet Dutta Baruah, Head
The new Council continued on course charted by the – Auto, Facebook, India and South Asia; and Mr Sudarshan
previous Council, under the able leadership of Mr John K Sarma, Industry Leader – Auto, Facebook India.
Paul, President. The Council also embarked on a number
of new initiatives for promotion of retail automobile trade.
It is a matter of satisfaction for the Council that the As majority of the issues facing automobile dealers are
activities undertaken by F A D A made a steady headway. local and State specific, F A D A would like to have strong
associations of automobile dealers at the local and
regional levels, which will not only take up local issues
3. Council Meetings in a concerted manner, but will also act as bridge between

During the year, 4 meetings of the Council were held – F A D A and automobile dealers spread across the country.
one at Kochi, two at New Delhi and one at Jaipur.
6. 2017 Dealer Satisfaction Study by J D Power Asia Pacific
4. 52nd Annual Session of F A D A
As per past practice, 52nd Annual Session of F A D A As in the past, F A D A associated with J D Power Asia
was timed with the AGM and held on 23rd & 24th Pacific for the latter’s 7th edition of dealer satisfaction
September 2016 at Kochi. The Chief Guest on the study, namely, 2017 India Dealer Satisfaction with
occasion was Dr T M Thomas Isaac, Finance Minister, Manufacturers Index (DSWAMI).
Government of Kerala. Other distinguished guests who The 2017 Dealer Satisfaction Study also covered the
participated at the Annual Session, included: Mr A K dealers of 2-wheelers and commercial vehicles.

Saseendran, Transport Minister, Government of Kerala; 7. Automotive Skills Development Council (ASDC)
Mr Sumit Sawhney, Country CEO & MD Renault India;
Mr Rakesh Batra, Partner and National Leader,
Automotive Sector, Ernest & Young; and Mr Rajan F A D A participated actively in formulating plans &
policies of Automotive Skills Development Council
Pental, Group President, Yes Bank. (ASDC) that has been jointly promoted by F A D A, SIAM

11 September 2017

Annual Report 2016-17

and ACMA under the aegis of National Skill Development Skoda Auto India 7th Nov’16
Corporation (NSDC) to address the shortage of skilled Mr Sudhir Rao, CMD 7th Nov’16
manpower in the context of growing sales volumes & Tata Motors 28th Nov’16
use of IT, intensifying competition and ever-evolving Mr Ravi Pisharody, ED - CVBU 28th Nov’16
vehicle technology. Improving the working of ASDC and 28th Nov’16
making it more meaningful for the automobile dealers is BMW India 28th Nov’16
high on the Council’s agenda. A dialogue in this regard Mr Frank Schloeder, President (Act.) 29th Nov’16
has already been initiated with the office bearers of SIAM Renault India 12th Dec’16
and other members of Governing Body of ASDC. Mr Sumit Sawhney, MD 16th Feb’17
8. Industry Relations Polaris India
To strengthen the relations and to promote better Mr Pankaj Dubey, Country Head
understanding with OEMs, Council stepped up VE Commercial Vehicles
interaction with SIAM and individual OEMs during the Mr Vinod Aggarwal, CEO
year. Nissan Motor India
A team of F A D A office bearers held individual meetings Mr Arun Malhotra, MD
with the chief executives and senior officials of all major
OEMs, in their respective offices. The issues discussed Volkswagen Group Sales
were: a) Inventory control at the dealerships; b) Mr Thierry Lespiaucq, MD
Rationalising the manpower at the dealerships; c)
Manpower training and making ASDC more useful for Toyota Kirloskar Motor
meeting the manpower requirements of automobile Mr Akito Tachibana, MD
dealers; d) Need for OEMs regularly sharing actual retail
sales data to obviate inventory build-up and unhealthy
practices in the auto market; d) Vehicle Scrappage
scheme; and e) Exit route for the automobile dealers.
Meetings with OEMs

OEM Date Ford India

Mahindra & Mahindra Mr Anurag Mehrotra , MD 1st Mar’17
Mr Anand Mahindra, CMD
Dr Pawan Goenka, MD 7th Nov’16 Dr Shripad Bhat, Head, Govt. Affairs
Mr Pravin Shah, President & CEO 12th Dec’16
Mr Veejay Nakra, Sr VP - Sales & CC Mr Lakshmi Ram Kumar, GM, Dealer Development

Maruti Suzuki India Mercedes-Benz India 2nd Mar’17
Mr Roland S Folger, MD

Mr R C Bhargava, Chairman 9th Dec’16 The F A D A team also made a presentation to the Executive
Mr T Hashimoto, ED - Mktg & Sales 17th Nov’16 Committee of SIAM on 9th December 2016 on the issues
Mr R S Kalsi, ED - Mktg & Sales of concern to automobile dealers, including concerns
arising out of demonetisation. Following the presentation
Honda Cars India to the Executive Committee of SIAM, F A D A team held
Mr Yoichiro Ueno, President & CEO discussion with Mr Vishnu Mathur, Director General,
SIAM and his team of senior officials on 27th Feb’17.

Mr Jnaneswar Sen, Sr VP – Mktg & Sales 9. Interaction with the Government

Mahindra Trucks & Buses 7th Nov’16 In response to a representation made by F A D A,
Mr Nalin Mehta, MD & CEO Mr Arun Jaitely, Union Finance Minister invited F A D A
team for discussion. F A D A delegation, led by Mr John

September 2017 12

Annual Report 2016-17

Paul, President, met the Union Finance Minister on 2nd to the automobile dealer fraternity and its phenomenal
January 2017 in his office at New Delhi. The other contribution in protecting and promoting the interest of
members of F A D A team at the meeting with the Finance auto retail market in the US, send out a strong message
Minister included: Mr Ashish Kale, Vice President; that an umbrella organisation like F A D A can do
Mr Vinkesh Gulati, Hony Secretary; Mr Saurabh Kedia, wonders if the automobile dealers unite and organise
Hony Treasurer; Mr K V S Prakash Rao, Immediate Past themselves under its banner.
President; and Mr Nikunj Sanghi, Past President. The The delegation members also took the opportunity of
meeting discussed various issues of concern to visiting two automobile dealerships in Atlanta. The visit
automobile dealers and submitted a Memorandum to was quite an enriching experience for all the delegation
the Finance Minister. members. It was also an occasion to rejoice and join
F A D A team of office bearers also held a meeting with NADA in its centenary celebrations. Besides, F A D A’s
Mr Abhay Damle, Jt Secretary (Transport), Ministry of relations with NADA and other auto retail organisations
Road Transport & Highways in his office at New Delhi on across the world got a further boost. More importantly,
1st March 2017 to discuss the confusion caused by the the participation of large delegation under the banner
media reports and orders of some of the State of F A D A helped promote fellowship and goodwill among
Governments that BSIII compliant vehicles would not be the members.
allowed to be sold or registered w.e.f. 1st April 2017. The 11. GST Seminars
meeting also discussed a gamut of other issues, including: F A D A, as the apex national body representing the retail
i) Bringing road tax under GST regime; ii) Computerisation automobile trade in India, is alive to the challenge, the
and networking of RTOs across the country to ensure the implementation of GST is likely to pose for members of
availability of data of registration of vehicles on real- the automobile dealer fraternity. As such, an initiative
time basis; iii) Early implementation of Vahan 4.0 across was taken to organise series of seminars on GST in
the country and delegation of registration of vehicles to various parts of the country to guide and educate
automobile dealers; iv) Uniformity in motor vehicle taxes automobile dealers on the implications of GST and the
and registration procedures throughout India; v) Vehicle preparedness required on their part for smooth
life terminal policy; and vi) provision of auto clusters/ transition.
zones along national/state highways. 14 seminars on GST have been held under the banner of
As a follow-up to the discussion with the Union Finance F A D A in Mumbai, Delhi, Raipur, Lucknow, Nagpur,
Minister, a 4-member team of F A D A, led by Vice Aurangabad, Kochi, Chennai, Bangalore, Vijayawada,
President – Mr Ashish Kale, met Mr Ashok Lavasa, Kolkata, Guwahati, Hyderabad & Jaipur. What is
Finance Secretary, Government of India, on 2nd May 2017. heartening is that the seminars received massive
The meeting gave an opportunity for F A D A team to response, with each seminar attracting over 100
share its apprehensions on GST. participants. The seminars, in addition to educating
A 4- member F A D A group held meeting with Mr Nitin members on GST, also built up buzz and fellowship
Gadkari, Union Minister of Road Transport & Highways among amongst automobile dealer fraternity.
on 29th May 2017, wherein a number of issues of concern, 12. Association with Allied Businesses and Stakeholders
including GST, vehicle scrapping policy, according F A D A’s emphasis on building and strengthening
industry status to auto retail and provision for auto relations with other stakeholders and organizations
clusters along national & state highways were discussed. associated with automotive business was given further
The Hon’ble Union Minister of Road Transport & impetus during the year.
Highways was quite receptive to the suggestions made 13. F A D A Helpline
at the meeting. F A D A continued to guide the members on various issues,
10. International Relations including issues relating to dealer-manufacturer
A 36-member F A D A delegation participated at the 2017 relations, vehicle registration, road tax, VAT, labour laws,
NADA Convention, which also marked the centenary environment laws, consumer law and competition law,
celebrations of NADA that came into being in 1917 affecting auto retail in different parts of the country.
following the imposition of luxury tax on cars by the
then US Government. NADA’s 100-year illustrious service

13 September 2017

Annual Report 2016-17

Clarification/guidance sought by members was provided In response to a representation made by F A D A, Ministry
promptly. of Road Transport & Highways has dispensed with the
To help members cope with the complexities of service requirement of approval of new models by the Transport
tax/GST, Ms Puloma Dalal, FCA was retained as Service/ Departments of various States, if these models of vehicles
GST Tax Consultant for clarifying service tax/GST related have already been tested and certified by any of the
queries raised by members and providing guidance on national testing and certifying agencies specified in Rule
Service Tax Law/GST. 126 of Central Motor Vehicle Rules, 1989. This comes as
F A D A is also planning to engage other GST Consultants a big relief to the automobile dealer community as a
to clarify the members’ queries on GST. whole, as the practice was not only superfluous and
Besides, F A D A has tied up with GSTStreet.com to provide inconsistent with the scheme of Motor Vehicles Act, but
education and guidance on GST to its members through also a source of unhealthy practices and corruption
the latter’s GST Digital Learning Course. GSTStreet is within the Transport Departments.
offering 50% discount to F A D A members. Course fee for F A D A also made a number of representations
F A D A members is Rs. 5,000 + GST per registration. As concerning GST. Major suggestions made by F A D A are:
part of the digital learning course, GSTStreet will create (i) GST @ 0.5% on resale value in case of pre-owned
GST learning community for F A D A members on its portal vehicle sale to avoid confusion and unhealthy practices;
or any other technology platform, led by subject matter (ii) Removal of restriction of the stocks on the appointed
experts like Dr Sanjiv Agarwal to address the questions date being not more than one year old for admissibility
of registrants enrolled for digital learning course, upto of Input Tax Credit (ITC) for taxes already paid; and (iii)
2 return period. Treating composite service of vehicle repair & servicing,
14. Filing of intervention/interlocutory application on behalf involving replacement of parts, as service. Other
of F A D A in Supreme Court seeking ban on sale and suggestions received from members are also being
registration of BS III vehicles from 1st April 2017 suitably taken up.
In view of the uncertainty faced by the members of
automobile dealer fraternity regarding the sale of BS III 16. Statewise Groups of F A D A Members on WhatsApp
vehicles post 1st April 2017, arising out of the media F A D A has created Statewise Groups of F A D A Members
reports, intervention application filed by Bajaj Auto in on WhatsApp in order that members remain in touch
the Supreme Court and stand taken by EPCA seeking ban with each other and share the concerns and
on sale and registration of BS III vehicles from 1st April developments in the industry and trade. The objective is
2017, there was an urgent need for F A D A to intervene in (i) to sustain the interest of members and keep them
the case. Accordingly, F A D A filed an intervention abreast of F A D A’s activities, (ii) to foster fellowship
application in the case: M C Mehta vs Union of India & among members, (iii) to know what is happening in the
Others on 26th March 2017. The outcome was contrary industry and trade through sharing of experiences and
to the expectations, though. information, and (iv) to receive feedback on what
15. Representations to the Government concerted action needs to be taken at the level of F A D A
To tide over the immediate acute adverse impact of and its Regional Associations to remove impediments
demonetization on auto market, a number of and difficulties.
representations were made to the Government, banks &
financial institutions and OEMs, seeking support by way 17. Exit of General Motors India from the Indian Market
of (i) Rationalisation of inventory and credit support; Sudden decision of General Motors India to stop sales
(ii) Enhancement of CC limits; (iii) Postponement/ in the Indian market from 1st January 2018 has left the
restructuring of repayments; (iv) Reduction in credit card automobile dealers and customers shell-shocked. The
charges for transactions through credit cards; and (v) automobile dealers were always assured by GMI that
Increase in auto loan limits for the customers. It is General Motors has long-term commitment to the Indian
heartening to note that that there was an overwhelming market and would introduce 10 new models over a period
positive response to the submissions made by F A D A of time to turn around the fortunes of the company and
from all quarters. its dealers. A commitment of further investment of $ 1
billion in India was made by General Motors’ CEO –
Ms Mary Barra, when she visited India in October 2014.
Since this abrupt decision of General Motors India was

September 2017 14

Annual Report 2016-17

contrary to the assurances given by the company from 20. Membership
time to time and caused huge loss to the company’s
dealers, F A D A, on being approached by GMI dealers, F A D A’s membership strength as at the end of 284th
intervened in the matter. GMI dealers staged a dharna Council Meeting held on 7th July 2017 in New Delhi stood
at Jantar Mantar, New Delhi on 27th June 2017 to make as under:
the Government and the company wake up to the gravity
of situation. The Dharna evoked a massive response and Founder Members 4
coverage in the media. F A D A also approached various
authorities in the Government for ensuring suitable Association Members 23
compensation to the GMI dealers. Further measures to
ensure justice to the GMI dealers, including legal action, Total 27
are being contemplated, if the outcome of discussions
with the Government and the company is not satisfactory. Other Members i.e. Individual Members, Life
18. FADA Journal Members, Supporting Members
Monthly publication “FADA Journal” continued to grow
in terms of quality, content, popularity and circulation. Region Individual Life Supporting Total
The contents of Journal covered under different columns,
have evoked appreciation from automobile dealers and Members Members Members
others connected with automotive business, for their
substance and usefulness. East 117 137 1 255
19. Media Coverage North 241 188 8 437
F A D A’s activities and concerns were extensively covered South 180 201 10 391
by the national & regional media from time to time. West 212 190 15 417
Total 750 716 34 1500

These members, most of them owning multiple
dealerships, represent more than 75% of the retail
automobile trade in India

Raj Chopra Re-Elected as President of ATAD

At the AGM held on 20th September 2017 at Hotel Le Meridien, New Delhi, Raj Chopra, CMD, Competent Automobiles Ltd,
was re-elected as President of The Automobile Traders Association Delhi (ATAD).

Thanking the members for reposing their faith and confidence in him, Raj Chopra sought their regular participation in
the Association’s activities and meetings. He expressed the view that the Association, as a body of automobile dealers,
is better placed to solve the problems of dealers in Delhi. It is well nigh impossible for the individual dealers to get the
issues resolved. Members thanked Raj Chopra and his team of office bearers for ably steering the Association.

Engagement of GST/Service Tax Consultant

A GST/service tax consultant – Ms Puloma Dalal, FCA based in Mumbai, has been engaged by FADA on retainership to
help members deal with the complexities of GST/service tax law and procedures. She will, on reference made by FADA,
guide and give legal opinion on various issues relating to GST/service tax as applicable to automobile dealers.
FADA 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/
service tax issues raised by FADA 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/service tax as relevant to automobile dealers, may
send their queries to FADA office at 804-805, Surya Kiran, 19, K G Marg, New Delhi (E-mail Id: [email protected]).
The service is offerred to FADA Members free of charge.

15 September 2017

Perspective

The Automotive Revolution is Speeding Up

How fast is disruption reshaping the personal-mobility landscape, and what will new value pools look like
as the ecosystem evolves?

McKinsey & Co.

What a difference a few years makes—the automotive sector potential: less than 1 per cent of passenger miles traveled
is changing, and it’s changing fast. Start-up CEOs have risen today are carried out using shared-mobility services,
as superstars of the industry almost overnight. Artificial and US customers expect usage of shared mobility to
intelligence is poised to become a base technology for every increase by around 80 per cent once robo-taxis are
engineering department. Automotive OEMs are exploring available.
other parts of the ecosystem, even taking part in conferences • Connectivity. Only 12 per cent of cars today are equipped
once aimed squarely at the film and music industries. with embedded connectivity solutions, and monetization
Consumers talk more about systems and technologies is still weak (less than $1.5 billion in revenue). But the
embedded in cars than about horsepower. And investors have importance of cars as part of a connected network for
taken the wheel in shaping the mobility system in certain the consumer is growing: the per centage of consumers
countries. ready and willing to change car brands for better
Would anyone have envisioned all these shifts happening by connectivity has doubled over the past two years. In the
2017? premium segment, a majority of OEMs have already
For more than two years, the industry has been talking about installed fully connected infotainment systems in 100
the four disruptive trends changing the rules in the mobility per cent of their new vehicles. These systems are used to
sector: autonomous driving, shared mobility, connectivity, provide a diverse range of in-vehicle services to drivers
and electrification. A McKinsey report from January 2016 and diverse data sets to third parties.
integrated the impact of these trends into a single picture for • Electrification. Whereas less than 5 per cent of vehicles
the first time. Today, we can offer a perspective on three sold in 2016 were equipped with electrified-vehicle (xEV)
questions that are a top priority: powertrains, the industry aspires to have over 50 per
1. What is the speed of change? cent of all new models in 2021 equipped with xEV
2. What do the new value pools look like? drivetrains. Between now and then, many mass-market
3. What is required to succeed in the future? OEMs are planning to add ten or more xEV models to
This article addresses the first two questions; the third their lines, as they project they can reach potential sales
question will be covered in a forthcoming piece of 100,000 to 600,000 xEVs in the next five years.
Within each trend, individual players are already making
The disruptive trends transforming the auto industry headway on key technologies, even though no player seems
are gaining momentum likely to be able to dominate in all of them (for the foreseeable
future). Yet, there remain technological and economic
All four mutually reinforcing trends—autonomous driving, challenges for each trend that must be overcome. The speed
shared mobility, connectivity, and electrification—show signs at which this can be achieved will ultimately define how
of acceleration. Indeed, the entire industry shows signs of quickly all trends can gain a real foothold across the industry.
increasing momentum. Here are two examples:
• Autonomous driving. In 2016, only about 1 per cent of 1. Battery cost and scale. For producers to reach parity in
total cost of ownership and profitability between battery-
vehicles sold were equipped with basic partial- electrified vehicles and internal-combustion-engine
autonomous-driving technology. Today, 80 per cent of vehicles, the cost of batteries would need to be reduced
the top ten OEMs have announced plans for highly by 25 to 40 per cent. Lithium-ion battery production will
autonomous technology to be ready for the road by 2025. need to increase significantly to meet the demands of
• Shared mobility. In major regional and local markets, millions of new xEVs.
large shared-mobility providers dominate, with 2. Ability to extract value of shared mobility. Greater
combined market shares of up to 90 per cent. As of this proliferation of shared mobility depends, in part, on the
writing, in 2017, at least $32 billion had been invested ability to broaden the addressable market. Use cases
in ridesharing start-ups alone. There is strong growth

September 2017 16

Perspective

such as commuting would require a much lower price scenarios could be almost 40 per cent. This may be driven
level than a typical ride-hailing offer today. This will strongly by the likelihood and ability of evolving disruptive
require new offers (for example, for pooling) and new technologies to unlock new use cases and value within the
technologies (for instance, autonomous driving). personal-mobility landscape. While more traditional revenue
sources could also show some variance in their prospective
A new personal-mobility landscape is starting to take growth, they will likely prove to be more stable than the
shape revenue sources from disruptive technologies.

It’s clear that personal mobility is evolving. Several scenarios
could unfold, depending on a number of variables; the
technological focus will shift, market perspectives should
become more granular, and understanding customers will
be essential.
Understanding how mobility could develop through 2030
Projecting the various development paths of the four
disruptive trends—and their impact on the industry—led us
to define six potential mobility scenarios for 2030. Four
scenarios were built using the same degree of technology
diffusion for all four trends, since we found that all trends
are mutually reinforcing and the success or failure of one
affects the others. Given that the key drivers of diffusion for
electrification can be independent from those of the other
three trends, we added two additional scenarios in which we
vary the diffusion trajectory of the trends.
Although the overall industry is expected to continue its path
of growth, the range of possibilities for the future is broad.
The variation in revenue potential across the six market

Of the outlined scenarios, our research, recent developments,
and conversations with players across the personal-mobility
landscape led us to believe a more disruptive development
is most likely. We’ll consider the “disruption to personal
mobility” scenario the new base case, in which the overall
industry could have the potential to grow 4 to 5 per cent
annually, doubling in size to roughly $6.6 trillion by 2030.
Spotlighting new business models
The new base case could mean that business in the personal-
mobility landscape may look very different in the future. Value
is likely to shift toward new, disruptive business models,
with shared mobility and connectivity solutions potentially
accounting for up to 25 per cent of total automotive revenue
in 2030.

17 September 2017

Perspective

Considering our base case, by 2030, about 20 per cent of
value generated from classic vehicle sales might shift toward
new technologies, such as xEV powertrains or autonomous-
vehicle software and components. But more than 60 per cent
of revenue from disruptive business models could still be
carried by traditional elements, such as the shared vehicle
itself or fleet operations.

Of course, there’s no guarantee this scenario will emerge. This development will push players to bridge two worlds
Reaching four milestone statistics is crucial to it becoming to serve their customers. Although incumbent players
reality: could face a major transition as the personal-mobility
• 100 per cent vehicle connectivity and the commercial landscape evolves through 2030, they should look for
areas in new business models where they can use their
introduction of robo-taxis covering up to 5 per cent of advantages in more classic industry capabilities.
passenger miles traveled by 2030; Similarly, despite the challenges of a transition, there
• 90 per cent adoption rate of smartphone ridesharing may also be an opportunity to reduce the intensity of
apps by 2030; capital expenditure in the industry—an effect that may
• Tenfold growth in reliance on shared mobility, accounting also increase the industry’s overall attractiveness for
for about 15 to 20 per cent of vehicle miles traveled in the financial market.
dense cities by 2030; and
• 50 per cent of vehicles sold have cost-efficient electrified
powertrains in 2030.

If this scenario comes to pass, new business models on
shared mobility and car-data-enabled services will require
players to build on different technology and competencies
as well as new types of partnerships to unlock value and
serve increasingly diverse customer needs.
One example of how multiple players are starting to partner
on new business models can be observed in the development
of in-car delivery solutions. While same-day delivery still
seems like a novelty to many, automotive, e-commerce, and
logistics players are already working on solutions that use
data from fully connected vehicles to have packages delivered
to car trunks, regardless of where the driver is.

Reconciling disruptive technologies with traditional products
and services

The growing importance of new business models is
accompanied by a shift in technological focus, which is
required both in classic vehicle sales and aftermarket as
well as in new, disruptive business models. Emerging
technologies in the fields of electronics and software stand
in contrast with more traditional areas, which are likely to
remain a relevant share of the overall value pool.

September 2017 18

Perspective

Developing more granular market perspectives In this emerging landscape, players should not define
“The customer is king” is not a new law to live by. Yet in the themselves as belonging to one layer, quadrant, or technology
new personal-mobility landscape, it can make changes in type. Instead, they may be active in different business models,
market structures more prominent and may require industry engage multiple technologies, and play more than one role
players to take an ever-more granular perspective on how to across layers, depending on what their capacity to deliver
best serve their customers. This is not a surprising value to their customers allows. A classic OEM, for example,
development; other industries, such as telecommunications, could grow from its traditional core of building vehicles for
have already gone through a similar shift. Two factors are ownership toward developing provider capabilities.
primarily responsible for the need for a granular market Furthermore, it could participate in new mobility services
approach: different growth rates and different speeds of trend for end consumers in order to capture value that is generated
adoption. in new areas of the landscape and that increasingly gravitates
First, growing regions are likely to become even more toward its center.
important. Most significantly, China could experience growth Those closest to the center may tend to be more focused on
in sales volume of more than 50 per cent by 2030. With an how they serve the mobility end consumer. Their business
expected 8 per cent compound annual growth rate, it would models are likely to be more targeted than those of players
grow to represent about a quarter of the industry’s revenue operating mainly on the outer layers of the landscape. Actors
by then. Similarly, dense, developed metropolitan areas could in the supplier or infrastructure space, on the other hand,
increase their market share by 50 per cent as well, accounting have a broader audience and likely cater to both other
for 20 per cent of industry revenue. industry players and the end customer, regardless of whether
Second, we are on track to see an increasing divergence in they are active in the mobility-as-a-service space or in
the adoption of key technologies in all markets. Again, traditional vehicle sales. A tire manufacturer may sell the
China’s consumers seem to remain front-runners, with 90 same product to manufacturers, car owners, and mobility
per cent of our recent survey respondents willing to switch fleet operators, for example.
brands for better autonomous-driving functionalities— On the other hand, these outer-layer roles may tend to be
compared with 56 per cent of consumers in the United States more focused on specific technologies or solutions in order
and 49 per cent in Germany. The regulatory drive toward to deliver the best offer to their broader market. Roles close
electrification may also play out differently in different to the end consumer, however, will probably have to provide
cities, even within the same country. And it’s worth noting
that consumers in dense cities will require mobility services
that differ from those for people in small towns or rural
areas.
With diverse sets of customers across the globe taking centre
stage in defining the future of mobility, the development of
the four technology-driven disruptive trends has the potential
to vary significantly by market. This requires industry players
to act at an extremely granular level.

Rethinking the industry to reflect a consumer-centric mobility
landscape
The increasing momentum of all disruptive trends, the shifts
in value pools and corresponding capabilities, and the
growing need for more granular perspectives on consumers
requires we rethink our view of the automotive industry. The
new personal-mobility landscape that is emerging is much
broader than the traditional automotive industry; it is
extending to include, among many others, tech players and
new entrants from other industries such as software and
utilities. Whether incumbents or challengers, all players will
find themselves part of an increasingly diverse playing field.

19 September 2017

Perspective

a combination of technologies. Fleet operators, for instance,
may choose to offer a range of premium products and services
(including the newest electric and autonomous technologies).
Such changes mean that players will have to think actively
about positioning themselves. A snapshot of these changes
emerges when we consider the likely shifts in value discussed
above, and thus the respective revenue opportunities, between
today and 2030 in the new personal-mobility landscape. To
illustrate this, we will refer to the revenue potential of our
base case - $6.6 trillion by 2030 - and will not consider broader
opportunities, such as those in the infrastructure layer.
Today, the market is consolidated and focused on providing
the traditional, privately owned vehicles that the majority of
consumers use for their personal transportation needs. In
the future, the mobility landscape may be highly disrupted
and require many new layers of offers, given the potential for
value shifts and additional value being created through new
powertrains, autonomous-driving technology, in-vehicle
connected services, and shared mobility.
As personal mobility continues to improve with these new
offers, the biggest beneficiary of this disruption is likely to
be the end consumer. Mobility as a service may fundamentally
change the consumer’s relationship to the car. Just like the
mobile phone, changes in mobility will open up the possibility
for new services and completely new forms of value creation
in daily life.
This new way of looking at the personal-mobility landscape
allows us to map developments & identify new opportunities
as players seek to meet the needs of the mobility consumer of
the future and capture a fair share of the market. The question
of what will be required to succeed in this future landscape-
potential strategies, partnership types, and transition
paths—will be the focus of a discussion in future

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September 2017 20

Opinion

Growth Levers for Auto Component Industry Intact, But
Commodity Prices Continue to Play Spoilsport: ICRA

The domestic auto component industry is expected to grow over the near to medium term. Thus overall export volume
by 9-11% during FY2018e driven by robust growth in growth is expected to be marginally positive for Indian
domestic passenger vehicles (PV) and two-wheelers (2W) auto ancillaries though rupee appreciation in the recent
segment as well as stable replacement demand. The month will drag overall growth in INR term.
revenue growth will be also be supported by steady The revenues of ICRA’s sample of 48 auto ancillaries,
increase in commodity prices and consequent impact on comprising around 25% of the industry’s turnover, grew
realization. According to an ICRA report, long-term growth by about 5.5% during Q1 FY2018e; driven by higher
will be around 10-12%, considering the increasing content realization in the backdrop of steady increase in
per vehicle due to technological advancement and commodity prices. Volumetric growth was however in low
regulatory measures (emission, safety regulations). The single digit, also dragged by weak tyre sector revenue
growth in the auto component industry will be relatively performance which declined marginally by 0.6% during
higher than the underlying growth in the automotive the quarter. Volumetric growth is expected to be better in
industry in the medium to long term, due to increasing FY2018e (as compared to FY2017), driven by OEMs and
localisation by original equipment manufacturers (OEM)s, simultaneously supported by stable replacement demand.
higher component content per vehicle and rising exports The industry’s operating margin dipped below 15% level
from India. during FY2017 and may moderate further in FY2018. In the
Outlining reasons for the auto components industry’s medium term, margin will be ~13%-13.5% due to a richer
growth, Subrata Ray, Sr Group Vice President, Corporate product mix and rising revenues from the profitable
Sector Ratings, ICRA says, “Domestic (OEMs), mainly 2Ws aftermarket segment.
and PVs, which together constitute about two-third of As for profitability, following over 5-6 quarters of benign
overall domestic OEM demand, is expected to grow at a raw material prices, the input cost trend reversal since Jan-
healthy pace in FY2018. During 4mFY2018, PV and 2W 16, started impacting industry profitability from Q2FY2017.
production grew by 6.9% and 10.0%, respectively, which Amongst all commodities, rubber prices were very volatile
coupled with robust 15.3% growth in tractor production with prices peaking at Rs. 160/Kg level in Q4FY2017, though
volume has largely offset muted demand in commercial the same were down to around Rs. 130/Kg level during
vehicle (CV) industry (production dipped by steep 13.3%). Q1FY2018. Tyre manufacturers have witnessed sharp
ICRA expects FY2018 to be another good year for Indian correction in profitability during Q1FY2018, as they
automobile industry with healthy growth expectations in liquidated most of the high cost inventory. Other commodities
2W, PV and tractor segments.” like steel and lead have also remained at elevated level,
There is, however, near term concerns regarding medium continuing to pressurize profitability. Consequently, other
& heavy (M&H) CV demand given the impact of pre-buying segments like batteries (high dependence on lead) as well as
(in Q4FY17) and GST transition on demand off-take during sheet metal and automotive bearing players have also
H1FY18. Nevertheless, likely improvement in farm income witnessed Y-o-Y decline in profitability.
given overall normal monsoon should support growth for “Ancillaries continue to focus towards moving up the
2W, tractor and LCVs segments. Further the pick-up in value chain to mitigate profitability and competitive
infrastructure activity will drive growth in construction & pressure in the intensely competitive industry.
mining equipment as well as the tipper segment (classified Incremental investments are primarily towards new
under M&HCVs). order/platform related requirement or debottlenecking
Exports accounts for 28% of demand for auto components of existing capacity. Supported by healthy cash accruals,
in India, 60% of which is to the USA and EU markets. The gearing as well as coverage indicators for the industry
incremental order inflow for class-8 trucks have been have improved considerably over the past two years; we
encouraging over the last six months after witnessing expect industry-wide credit trends to remain stable,
sharp decline in the US M&HCV market during H2 CY2015 supported by robust demand from the OEM segment in
and CY2016. The European PV and CV sales too witnessed the near term,” concludes Ray
marginal growth YTD CY2017 though outlook remains tepid

21 September 2017

Surveys & Studies

White is the Most Popular Car Colour: SPAREAZE

In order to buy a car, one will always check with the Brands is versatile and can shift toward gray or green, and can
and the models but the colour of the car is also one of the also be made lighter or darker. Essentially, blue is one of
major deciding factors. Colour trends subtly change every the easiest colours to customize. “You can’t do that with
year. every colour,” she said. If you own a blue car, you are
Apart from the brand and models, there is a lot that goes in compassionate, optimistic, stable, honest and serene and
choosing a car. Even gender, zodiac sign and age influence also more likely to be admired for a strong sense of self and
in choosing the car Colour. Coming to the popularity, a luxury wisdom.
sedan is more popular in black and white colours, but a
small and sporty version is widely associated with red and Red – Red is the colour of passion and intensity. The
colourful shades. popularity of Red colour is 6% globally and it is 2% higher
White – For fifth consecutive year, White is the world’s most in India. Red is often the colour chosen by those who have a
popular colour, but Indians prefer Silver. The Popularity for zest for life. People, who drive Red Car, are ambitious and
White colour all over the globe is 37%, whereas the determined to get all they can out of life. There is also a
Popularity for Silver in India is 31%. White overtook Silver in myth that the owners of Red Cars pay higher insurance but
2011 as the most preferred vehicle colour preference. Since the colour has nothing to do with rates. Due to the
then, White has continued to gain popularity on all Vehicles popularization of White colour, many brands now offer red
types in most regions, while Silver has continued to decline. as their flat-tone, no-cost option for paint.
They are available in a rich variety of stone white solids, Reasons for few or limited car colours:
vanilla shades, cool bright whites and pearlescent Whites. 1) Some colours are more popular than others.
It is the dominant colour of light trucks, SUVs, and minivans.
People who drive a white car are willing to show up a fresh, Manufacturers may not want to experiment with new
young and modern face to the outside world. colours.
Silver – The popularity of Silver colour is only 11% all over 2) Certain colours are suitable for certain cars.
the World. But the popularity of Silver is more in India, 3) There is a relation between the car colour and the crash
which is 31%. Silver is a reflection of our attitudes about risk. Low visibility colours have higher risks of more
technology, modernism, and simplicity. So, it makes sense severe crashes.
that the colour experienced the most success at the same 4) According to a 2013 Forbes poll, colour preferences
time when technology, gadgets and non-tangible technology, are different in men and women.
was experiencing the most exponential growth and became 5) More the choices, more the problem!
most widely accessible.” People who drive a silver car are 6) The colour of the car can have a huge impact at the time
practical, innovative and business-savvy and also have a of resale.
good taste. 7) Darker colour cars absorb more sunlight and get
Black – The popularity of Black colour is same as Silver all hotter in summer. Thus, white cars are mostly
over the globe but it is 1% higher in India. It is the ultimate preferred cars.
power colour and it represents luxury and class. But Black
cars are the worst for the distance of visibility, unlike other
colour cars, which have slightly more visible distance.
Colours such as Black, blue, gray and others ranking lower
on the visibility index were associated with higher crash
risk in daylight hours. If your car is black, you are dignified
and striking without being showy. You want to give the
appearance of mystery.
Blue – The popularity of Blue colour is 6% all around the
globe and only 4% in India. Jane Harrington, colour styling
Manager in PPG explains that the Blue colour is gaining
popularity due to the “advantage of variety” it offers. Blue

September 2017 22

Surveys & Studies

Demonetization Diminishes India’s 3.6 Mn Unit Pre-Owned Car Market by 6%

IndianBlueBook 'India Pre-Owned Car Market Report’ 2017

IndianBlueBook (IBB), the industry first pricing and analytics Over the past year, the market has been hit by significant
platform for new and pre-owned vehicles in India, released “jolts” in the form of three major market reforms –
the second edition of the ‘India Pre-owned Car Market Report’ Demonetization in November 2016, BSIII/BSIV in March 2017
on September 13. and GST in July 2017. In addition to updates to the basic
market metrics presented in the first edition, the report also
reviews the impact of the recent disruptions on the overall
market.

“While these reforms have no doubt disrupted the status
quo, they have necessitated that all stakeholders change with
the times and become “more organized”. Notwithstanding the
short term hiccups, we strongly believe these market reforms
are good for the organized industry in the long term.” said Dr
Nagendra Palle, Managing Director & CEO, Mahindra First
Choice Wheels Ltd.

Pre-Owned Car Market Scenario in India
• The 3.6 million pre-owned car market grew at 9%;

Demonetization reduced market size by 0.2 million
units, roughly 6% of the overall market.
• GST regime, as it exists today, imposes a significantly
higher burden on the dealer – on a pan-India basis –
roughly twice the rate that was otherwise being incurred.
• Long-term, with transaction transparency increasing,
including expected RTO reforms, prices are expected to
adjust to accommodate the new tax structure.
• The pre-owned car market continues to organize rapidly;
organized and semi-organized segments grew by 36%
and 12% by volume while the customer-to-customer
(C2C) and unorganized segments have remained flat.
• The demonetization ruling and greater access to credit
have allowed for increased finance penetration in the
organized segment; finance cases have gone up by 20%
post-demonetization.
• At 70-80% new car finance penetration numbers are
not too far off those in mature markets; however, at
15%, significant headroom for pre-owned car financing
remains.

23 September 2017

Surveys & Studies

September 2017 24

Surveys & Studies

Key Highlights

How has the market changed since 2016?
• India is expected to be amongst the top 5 automotive

markets in the world by 2020.
• The pre-owned car market will be an important enabler

for new car industry growth; 25-28% of all new car
transactions are accompanied by a trade-in.
• Pre-owned car channels are highly fragmented with four
primary market segments:
- Organized: 15% market share, Average Volume per

dealer at 17 per month
- Semi-organized: 36% market share. Average Volume

per dealer at 9 per month
- Unorganized: 17% market share. Average Volume per

dealer at 4 per month
- Consumer to Consumer: 32% market share.
• The 3.6 million pre-owned car market grew at 9%;
Demonetization reduced market size by 0.2 million units,
roughly 6% of the overall market.
• The pre-owned car market continues to organize rapidly;
organized and semi-organized segments grew by 36%
and 12% by volume while C2C and unorganized segments
have remained flat.
• Dealer count across India is essentially flat, with
organized dealers growing fastest at 23% yoy; we expect
this growth to continue over the next few years.
How have the market reforms impacted the industry?
• GST regime, as it exists today, imposes a significantly
higher burden on the dealer – on a pan-India basis –
roughly twice the rate that was otherwise being incurred.
• In 70% of states, dealers will have to pay higher taxes
post-GST, compared to the old tax regime.
• Current GST structure is expected to give a fillip to C2C
transactions.
• Long-term, with transaction transparency increasing,
including expected RTO reforms, we expect prices to
adjust to accommodate the new tax structure.
• The cash crunch induced by demonetization led to
customers postponing their decision to buy pre-owned
cars; leading to a fall in volume in November 2016.
• On account of demonetization, the organized segment of
the pre-owned car market has grown faster and at the
expense of the semi-organized and unorganized segments.
• Finance cases have gone up by 20% post demonetization.

25 September 2017

Surveys & Studies

Insights on the Total Cost of Vehicle Ownership
• The scenario of buying a one-or two-year old vehicle is

perfect for shopping in the certified pre-owned (CPO)
car market.
• Car owners can save on the initial depreciation loss
through engaging in a pre-owned car transaction; it is
however, vital to TCO across vehicles when making a
purchase decision.
• Diesel hatchbacks command higher residuals in
comparison with their petrol counterparts.
• Not all vehicles age at the same rate, as represented by
their residual values.
• Localized activities and dense dealer networks are key
for superior residuals in the luxury segment in India.
• Self-driven rentals command lower residuals when
compared with white and yellow-board vehicles.
What are consumers telling us about pre-owned car
ownership?
• The age profile of customers in metros is younger when
compared to those in the non-metros.
• Smaller towns are more amenable to buy older vehicles
when compared with the metros.
• 70% of pre-owned cars sold are under Rs. 4 lakh.
• A greater share of organized transactions in the metros
are finance-driven in comparison to those in the non-
metros.
• Residents in smaller towns have a preference for diesel
vehicles and a strong liking for utility vehicles or small
cars

September 2017 26

FEDERATION OF AUTOMOBILE DEALERS ASSOCIATIONS

Annual General Meet

THURSDAY, OCTOBER 5, 2017 VENUE: THE GRAND HOTEL, VASANT KUNJ, NEW DELHI

For Registration: Download the form from F A D A’s website - www.fada.in or send E-mail to [email protected]
REGISTRATION FEE per particiopant (inclusive of GST): F A D A Member: INR: 2,500 Non-Member: INR 5,000

EVENT FLOW

• 03:30 P.M. – 04:30 P.M. - WELCOME ADDRESS AND INAUGURAL SESSION
by F A D A President, John K Paul
• 03:50 P.M. – 04:20 P.M. - INDIVIDUAL KEYNOTE SPEECH – GUEST OF HONOUR
• 03:50 P.M. – 04:20 P.M. - INDIVIDUAL KEYNOTE SPEECH – CHIEF GUEST
• 04:20 P.M. – 05:05 P.M. - PANEL 1 – DOING BUSINESS IN INDIA – AN ENTREPRENEUR’S JOURNEY SO FAR
• 05:05 P.M. – 05:20 P.M. - TEA BREAK
• 05:20 P.M. – 05:45 P.M. - INDIVIDUAL KEYNOTE – LEADING FROM THE FRONT
Speaker: Major General G D Bakshi
• 05:45 P.M. – 06:00 P.M. - INDIVIDUAL KEYNOTE – AUTOMOTIVE RETAIL AND THE ECOSYSTEM
• 06:00 P.M. – 06:45 P.M. - PANEL II – MILLENIALS AND MORE – NEW DAWN OF INDIAN ENTREPRENEURSHIP
• 06:45 P.M. – 07:15 P.M. - INDIVIDUAL KEYNOTE – LIVING LEADERSHIP
Speaker: Guru Gaurgopal Das
• 07:15 P.M. – 07:30 P.M. - CLOSING ADDRESS AND THANK YOU
by F A D A Vice President, Ashish Kale
• 07:30 P.M. ONWARDS - COCKTAILS & DINNER

27 September 2017

Technology

A Shape-Shifting Car? Patent Filings Point to Auto Industry’s Future

Carmakers feeling heat from Silicon Valley are boosting patent filings for self-driving vehicles and ride sharing

Car fanatics wanting a glimpse at the auto industry’s next big For its part, BMW AG
thing used to flock to auto shows. Now, many of them flip wants to patent a system
through online patent filings. that would allow an
autonomous vehicle to
communicate with
pedestrians or human
drivers in other vehicles,
through visual signs,
beeps or even speech.

Hyundai Motor Co.,
meantime, seeks to protect
a device that would allow
a driver to exit from the
car and then push a button
to park it, while Toyota
Motor Corp is looking to
patent a technology that
makes certain car parts
such as door pillars
appear to be see-through.

A rendering of the Toyota Concept-i self-driving vehicle Patent holders have
mock-up. exclusive rights on an
invention two decades
Auto makers in US, pressured to keep up with Silicon Valley after the filing date, an
companies working on autonomous-car technology and ride important weapon for
sharing, have sharply boosted their US patent filings over vehicle companies looking
the past five years. In 2016, 10 of the world’s largest car for a technological edge in
makers submitted 9,700 patent applications, up 110% from an evolving industry.
2012, according to consulting firm Oliver Wyman. While patent disputes
“The pressure is for us to invent before the Valley does,” rarely make news in the car business, first-movers often enjoy
said Bill Coughlin, Chief Executive, Ford Global Technologies benefits, such as revenue from licensing their creations to
LLC, which handles the Dearborn, Mich, auto giant’s patent others.
and copyrights. “The last thing we want is to be a fast Toyota, long the industry leader in patent filings, innovated
follower.” several hybrid-vehicle technologies that rivals eventually
A growing number of these filings seem straight out of science needed when looking to compete in combo gas-electric cars.
fiction, covering inventions intended to help people pay less Technology from its groundbreaking Prius was licensed by
attention to the road while they drive—or don’t actually drive Ford, for instance.
at all. “We’re not just a company that’s looking at putting some
Ford Motor Co. seeks a patent for a drone system that would nuts and bolts on a vehicle,” said Fred Mau, Toyota’s lead
locate passengers who call a self-driving robo-taxi, while intellectual property attorney in North America. “It’s about
another Ford filing, envisioning self-driving cars with being prepared for ‘what’s the next big thing?”
conference room-style seating, seeks to patent a special air One of the Japanese company’s most-recently published
bag that will fit into a center table to protect the occupants inventions is a system that uses cameras and data storage to
facing it. create a road-trip storybook. Toyota has also sought to patent
a digital necklace to help the blind sense their surroundings,

September 2017 28

Technology

an example of how the car maker is looking beyond the vehicle fund that invests in transportation startups. While under the
market to innovate. radar, these engineers are working on projects that are “more
Auto executives feel the heat from tech companies, as richly exciting than [anything] I’d ever seen at an auto show.”
funded startups and corporate heavyweights develop their Some car companies aren’t moving as aggressively on the
own moonshot ideas. patent front, even if they are trying to lead the technology
For instance, Google parent Alphabet Inc.’s Waymo chase. General Motors Co., for instance, has bought or
autonomous-car division in 2015 filed a patent application invested in Silicon Valley firms working on autonomous
for a shape-shifting vehicle that would become flexible in a technology but narrowed its own patent filings to about 1,000
collision.Amazon.com Inc., which is following Uber in the US last year, down 3.4% from 2012.
Technologies Inc. and Apple Inc. in creating an in-house GM said it trimmed its patent requests to focus more on
driverless-technology division, recently patented a system emerging technologies, including advanced materials, and
to help autonomous vehicles better navigate differing sensors and other things linked to connectivity.
roadway configurations. “We’re not looking at patent volume,” a GM spokesman said.
Juergen Reiner, a partner at Oliver Wyman, said car “We’re looking at patent quality.”
companies have an edge in creating automotive hardware, Race for Self-Driving Cars Gears Up in Asia
but will struggle to catch up on the software front. Unlike Asian tech giants, startups and auto makers, including Baidu,
Silicon Valley companies, traditional vehicle makers face nuTonomy and Nissan, are aggressively pursuing driverless-
huge overhead and capital requirements for their factories vehicle technology.
and product lines. Toyota’s US filings climbed to over 3,000 last year from
“It’s not a well-balanced battle,” Reiner said. “They need to 1,271 in 2012 and to 7,000 globally, from 9,950 in 2012.
develop cars and have other distractions.”
Ford submitted 5,000 globally, a fivefold
Patent filings aren’t the most efficient way to spy on big ideas increase over 2012, according to Oliver
at their gestation because they aren’t made public until 18 Wyman. Ford says it sees the potential to
months after submission. However, because they include the boost its licensing revenue; its income from
inventor names, they are also good for identifying talent. royalties, which includes licensing, totaled
“These are not the names you would ever read in the press,” $714mn in 2016.
said Reilly Brennan, a partner at Trucks venture-capital, a Toyota, Ford and several global rivals have
ramped up research centers in Silicon Valley,
expanding into data analytics and artificial
intelligence. Ideas like in-vehicle health
monitors and removable steering wheels or
pedals for self-driving cars are among recent
inventions Ford has sought to patent.
Car companies have typically looked to strike
cross-licensing deals in an effort to avoid
litigation over patents. That could change with
the rise of Silicon Valley companies that tend
to be far more aggressive in patenting and
protecting innovations. So auto makers are
arming themselves with more and more
patents.

Corrections & Amplifications
Patent holders have exclusive rights on an invention for two
decades after the filing date. An earlier version of this article
incorrectly said they have exclusive rights for as long as two
decades after the grant date

29 September 2017







Is Your Auto Brand Future-Fit?

Check five vital signs to find out.

Nick Bull, Auto Specialist, Kantar Millward Brown

What are the five vital areas where brands need to be 1. Brand purpose
strong to survive or thrive in the decade ahead? Why an auto brand exists is just as important as the cars it
designs, builds and sells. If it can demonstrate how it
It’s a historic tipping point for the automotive industry. A improves the lives of its customers, it will be well on the way
time of innovative revolution and mobility enlightenment. to success. This purpose can be one of many different things:
Experts reckon that in the next ten years, we’ll see greater denoting personal achievement, protection for your family,
advances than in the past 100. Developments in connectivity, life-style accessory, environmental responsibility,
autonomy and efficiency are pulling the car’s future towards individuality or even kindness. But no matter how the purpose
us at a startling rate. This change, and the technology driving strives to make people’s lives better, it needs to be clearly
it, is designed to make the lives of drivers and passengers defined and resonate deeply.
more comfortable and convenient. But for auto manufacturers 2. Innovation
lacking brand power, it will have the opposite effect. The next There’s no question that innovation drives growth. In our
ten years could see them nose-dive, while their stronger rivals BrandZ study, auto brands that scored highly for this vital
survive and thrive. sign outgrew their less ingenious rivals. In fact, Tesla’s score
grew by almost a third in 2017, compared to zero growth or
Strong brands are beacons decline for six of the other top ten auto brands in the ranking.
We also discovered that innovation needn’t always be a
The middle market is already being squeezed from both the technological development like battery power, or a marketing
top and bottom ends, while Tesla is redefining the sector, initiative like personalisation. Innovation includes other, less
well in advance of recently announced environmental obvious advances such as flexible finance packages, or car
legislation. According to the recent BrandZ report that ranks substitution. Financial arrangements such as “Personal
the top 100 most valuable global brands, scores of luxury Contract Payment” deals are now making premium or even
players like Porsche and Land Rover continue to grow, with luxury segment brands more affordable, while the flexibility
brand value up by almost one fifth this year already, even in of substituting a week-day car for a different model at the
uncertain financial times. However, one thing is for certain weekend shows how innovative thinking and customer
across all these market segments – the strongest car brands, understanding work together to create new lifestyle solutions.
those who know what they stand for and what their customers 3. Communications
want, will be the ones that survive and thrive. That’s because This vital sign covers everything from television advertising
these auto manufacturers understand that people buy into to social media presence; PR-driven scoops to the actual
brands just as much, if not more so, than individual car number of cars on the road. Auto brands that integrate and
models. And they also realise that customers use brands as
a decision-making short-cut – sifting through them with just
a glance to leave only those they want to consider. Put simply,
strong brands are a clear beacon in a cluttered market.

Five vital signs of brand health

So, what ingredients make up a ‘healthy
auto brand’? Is it possible to quantify
something that has so many contributing
factors, including intangible, emotional
elements? We think it is. Here are the five
vital signs all strong and healthy
automotive brands typically display.

33 September 2017

sustain consistent, differentiating messaging and imagery visited, the car becomes a helpful guide, money-saving friend
are the brands that will ultimately win. And those that can and lifestyle enhancer. And this helps drive the brand
integrate the highest number of consumer touchpoints at key experience in the eyes of the driver.
moments along the journey to purchase, are the brands that 5. Love
will win big. The four other vital signs work towards creating this perfect
4. Brand experience end-game. It’s an intangible, precious objective, one that
A customer’s brand experience begins way before the two transcends logic and straightforward decision making. Just
actually meet. Word-of-mouth anecdotes, news coverage and think of the quirky devotion shown by Mini owners or the
online searches shape perceptions before potential unrequited adoration Alfa Romeo stirs in the hearts of so many.
purchasers step through the dealership door. That’s why it’s
vital for the sales team and service staff to maintain the Brand power is vital to survive and thrive
reputation if it’s good, or help to allay negative preconceptions.
And while all of this is happening, new players like Tesla and Right now, the speed of change in the auto sector is breath-
Amazon are disrupting traditional sales journeys, while taking. Over the next ten years, it will accelerate to
taking the customer experience to new levels. The former, unimaginable velocity. Innovative brands that have a clear
with its ground-breaking shopping mall retail presence, the purpose, a consistent voice and delighted customers will
latter with its new Amazon Vehicle mail-order service, where thrive. In the industry’s most dynamic decade ever, they are
in Italy you can pop a Fiat 500 in your shopping basket and perfectly placed to take advantage of every opportunity
have it delivered to your door. But of course, the brand change will bring. But for auto brands scoring badly in just
experience extends long after dropping the new keys into the one of the attributes, there’s a real risk of brand damage and
owner’s hand. Post-purchase experience is equally vital and as a result, underperformance in the market. And for those
connectivity is just one way it can be delivered. By monitoring brands scoring badly across all five criteria the future looks
engine health and driving style, routes taken and shops bleak. If they continue as they’re doing now, they won’t be
with us for very much longer, let alone ten years’ time

September 2017 34

New on Wheels

Tata Motors Launches Compact SUV Nexon

Tata Motors announced on September 21, its entry into the features. Starting September 21, Tata NEXON will be on sale,
growing Compact SUV segment with the commercial launch across 650 Tata Motors authorized sales outlets in India.
of its new Gen-next lifestyle SUV, the Tata NEXON. Unveiling Tata NEXON, Guenter Butschek, CEO & MD, Tata
Motors, said, "Our passenger vehicle market is dynamic. The
Targeted at the personal car buyers, Tata NEXON is the 4th fast-moving generation has clear preferences in terms of
product based on the ‘Impact Design’ philosophy. It brings design and style. Catering to this discerning need of our
together global and contemporary design with best-in-class customers, we have consistently pushed the boundaries of
technology and features. automotive engineering by creating new categories of
vehicles. Tata Nexon is the result of our intent to break away
With an introductory price of Rs. 5,85,000, Ex-Showroom from the conventional approach of segmentation in its
Delhi, for the petrol variant and at Rs. 6,85,000, Ex-Showroom discreet forms and fulfilling a larger set of milieus.
Delhi, for the Diesel variant, Tata NEXON is the most Connecting Aspirations of our customers, with Tata NEXON,
competitively priced SUV in this segment, with class-leading we offer an unparalleled package of style, performance, and
innovative features."
KEY HIGHLIGHTS Speaking at the launch, Mayank Pareek, President- PVBU, Tata
Motors, said, "Our focus is to introduce products that not
Revotorq –1.5L Diesel 1496 cc engine only enhance the brand, but simultaneously align well with
- 4 Cylinder the rising aspirations of customer segments. As part of the
- Maximum Power of 110 ps @ 3750 rpm aggressive turnaround strategy, we have renewed focus on
- Maximum Torque of 260 Nm @ 1500-2750 rpm. filling in product gaps and tapping the white spaces that will
emerge. Conceptualised as a lifestyle SUV for young
Revotron – 1.2L Turbocharged Petrol 1198 cc engine progressive individuals, The NEXON is the culmination of
- 3 Cylinder this radical shift in thinking and will further expand Tata
- Maximum Power of 110 ps @ 5000 rpm Motors’ addressable market."
- Maximum Torque of 170 Nm @ 2000-4000 rpm. Tata NEXON is a revolutionary design of "Breaking the BOX"
with an aerodynamic silhouette. This design element of the
Transmission car enhances its sporty character and represents the
- TA6300 synchromesh with overdrive evolution of the SUV design featuring the practicality of an
- No of gears: 6 forward + 1 reverse. SUV with style of a sports coupe.
Available in four variants – XE, XM, XT, XZ+, Tata NEXON will
Comfort come in five exciting colour options – Vermont Red,
- Smart Key and Push-Button Start Moroccan Blue, Seattle Silver, Glasgow Grey and Calgary
- Automatic Climate Control White, with a standard warranty of 75000 kms or 2 years,
- Scuplted Seats with Spacious Cabin whichever is earlier.
- Dual Path Suspension
- Electric Power Steering with Phone and Media Controls.

35 September 2017

New on Wheels

Mahindra Showcases its First Ever Driverless Tractor in India

Mahindra & Mahindra Ltd displayed its first ever driverless The pioneering driverless tractor is equipped with state-of-
tractor on September 19. the-art technology and boasts of several unique features:
Developed at the Mahindra Research Valley, the Group’s hub Auto steer - GPS based technology that enables a tractor to
of innovation and technology located in Chennai, the travel along a straight line.
driverless tractor is all set to redefine the mechanisation Auto-headland turn - Enables the tractor to orient itself along
process for the global farmer. adjacent rows for continuous operation without any steering
With this launch, Mahindra becomes the pioneer in the Indian input from the farmer.
tractor industry with the unique proposition of a driverless Auto-implement lift - Feature in the tractor that
tractor. This innovation will change the future of farming by automatically lifts the work tool from the ground at the end
increasing productivity, leading to increased food production of a row and lowers the tool after the tractor has oriented
to feed the growing needs of the world. itself for operation at the next row.
Speaking on this occasion, Pawan Goenka, MD, M&M said, Skip passing - This technology feature enables the tractor to
“Our tractor R&D has always been at the forefront of steer to the next row for continuous operation without any
pioneering cutting edge solutions. Today’s display of the intervention of the driver.
driverless tractor is another proud moment for us, as it opens In addition, the driverless tractor is also equipped with some
up new possibilities in farming. We are happy to dedicate unique safety features as below:
this innovative mechanisation for the global farming Geofence lock - Prevents tractor from going outside the
community, in line with our Farming 3.0 proposition”. boundaries of the farm
Rajesh Jejurikar, President, Farm Equipment Sector, M&M Control via Tablet User Interface - Enables the farmer to
said, “Today the need for farm mechanisation is higher than program various inputs needed to farm efficiently. Also offers
ever before, due to labour shortage and the need to improve controls to prevent the tractor veering off from its intended
productivity and farm produce yield. Coupled with our path or desired operation.
‘DiGiSENSE’ technology, the driverless tractor offers a distinct Remote Engine Start Stop - Ability to stop the engine and
advantage to the Indian farmer by bringing an unprecedented hence, bring the tractor to a complete STOP, if needed, in
level of intelligence to the tractor”. cases of emergency
This technology will be deployed across Mahindra tractor
platforms in due course of time. It will also be deployed With the deployment of this technology on Mahindra
across international markets such as USA and Japan, giving tractors, the farmers can work at their fields for long hours
Mahindra tractors a distinct competitive edge in global without exposing themselves to harsh weather or difficult
markets with technological advancement being at the operating conditions. They can also protect themselves from
forefront. Mahindra plans to offer the driverless tractor potential health hazards resulting from operations like
technology across its range of tractors from 20 HP to 100 HP insecticide spraying
over a period of Unique Features of the Driverless Tractor.

September 2017 36

Upgrades & Variants

Renault India Launches New Duster Sandstorm

Renault India announced the launch of New DUSTER decals on the hood, doors, tailgate and ORVMs. The rugged
SANDSTORM EDITION on September 19. look with the Shiny black front grille expresses the assertive
Renault DUSTER SANDSTORM EDITION will be available in personality of the SUV. Other exciting exterior embellishments
two trims – RxS Diesel 85 PS SANDSTORM EDITION offered at like the all New style ZODIAC 16-inch machined alloys, and
an attractive introductory pricing Rs. 10,90,400 and RxS the body coloured door handle finish accentuate the rugged
Diesel 110 PS SANDSTORM EDITION at an attractive SUV look and perfectly resonates with this offering.
introductory price of Rs. 11,70,400 (both Ex-Showroom, INTELLIGENT INTERIOR ENHANCEMENTS
Delhi). Renault DUSTER SANDSTORM comes with 5-speed and The interiors of the Renault DUSTER SANDSTORM EDITION
6-speed manual transmission and is available in a 2-wheel perfectly complements the vehicle’s exterior design. The
drive (2WD) option. exclusive touch in the vehicle’s interior environment is based
Commenting on the launch, Sumit Sawhney, Country CEO & on a host of innovative enhancements like the interior colour
MD, Renault India Operations said, “Renault DUSTER, which harmony in black & grey, centre fascia with dark chrome
has over the years acquired the stature of a cult product, has finish, shiny black door trim decorative strip & grab handle
the widest offerings in the SUV segment. As part of our and doorhandle finish in black. The exclusivity of the new
endeavour to keep our products and services innovative and vehicle extends to the new seat covers and floor mat set with
contemporary, the exciting enhancements on the SANDSTORM ‘SANDSTORM’ branding. It is also equipped with a 7-inch
make it look even more rugged and tough - the very DNA of a touch screen and dual air-bags.
true SUV. SANDSTORM EDITION is offered at compelling price Colours: New SANDSTORM EDITION is available in 3 colour
points and will provide the owners a bold, intelligent and options - Outback bronze, Moonlight Silver and Slate Grey.
efficient avatar of the DUSTER, which will further continue to EFFICIENT AND POWERFUL
carry the legacy of the DUSTER forward in India.” DUSTER SANDSTORM EDITION will be powered by the powerful
“Renault DUSTER, one of the most awarded SUVs and known and frugal K9K 1.5 dCi (Common Rail Direct Injection) engine
for its iconic SUV design in India has been able to make a that effortlessly overcomes every challenge. The diesel engines
strong connect with the Indian customers across diverse churn an output of 110 PS and 85 PS. The powerful 110 PS
demographics and geographies. It has inspired us to offer version has a 6-speed manual transmission with gear ratios
something new and better to our customers in line with their perfectly matched to the engine’s output with an excellent
ever evolving needs and preferences,” added Sawhney. fuel efficiency of 20 kmpl (ARAI). The 85 PS version features a
BOLD AND RUGGED EXTERIOR DESIGN 5-speed manual transmission that delivers the best-in-class
The exterior design of the New DUSTER SANDSTORM EDITION fuel-efficiency of 20 kmpl (ARAI).
SUV is very powerful and imposing with the New Matt Black Bookings for the New DUSTER SANDSTORM can be made either
front armour with DUSTER Branding & Lamps. It maintains at the dealerships or through the Renault DUSTER App, which
its robust iconic SUV appeal and the bold graphics make it could be easily downloaded from the Google Playstore.
even more expressive with the smart and striking SANDSTORM

37 September 2017

Upgrades & Variants

ŠKODA Introduces Octavia RS 230

Czech automobile manufacturer ŠKODA AUTO India honeycomb air inlets and contributes to the car’s wide and
introduced OCTAVIA RS 230. OCTAVIA RS will follow ŠKODA’s sculpted impression. The redesigned headlight clusters in a
philosophy of ONE NATION, ONE PRICE and will be available crystalline look feature full-LED technology and the AFS
at an Ex-Showroom price of Rs 2,462,542. adaptive front light system as standard. The fog lights, tail
At the launch of the OCTAVIA RS, Ashutosh Dixit, Director - lights and number plate illumination also feature LED
Sales, Service & Mktg, ŠKODA AUTO India, said, “OCTAVIA RS technology as well as a crystalline appearance. The radiator
transforms ŠKODA’s century long motorsports legacy into the grille and the tailgate both sport the RS logo featuring a gloss-
fastest ever OCTAVIA produced in India. OCTAVIA RS 230 boasts black ‘V’ (for victory).
of a unique combination of a high performance engine, sporty The front seats feature red topstitching, is electrically
appearance & driving dynamics along with new technologies adjustable, offers lumbar support and has a memory function
and connectivity.” (driver’s seat), which saves three seat positions.
ŠKODA OCTAVIA RS 230 delivers 169 kW (230 PS) from its 2.0 The multifunction sports steering wheel, with perforated
TSI turbocharged petrol engine. The powerful engine and leather and integrated gear-shift paddles, matches the car’s
innovative chassis technology including the XDS+ limited- dynamic ambience. The radio and telephone (Bluetooth) can
slip differential offerthe ultimate driving experience. OCTAVIA be operated from the steering wheel. A colour Maxi-DOT
RS 230 accelerates from 0 to 100 km/h in just 6.8 seconds; its display forms part of the instrument cluster. The LED ambient
top speed is limited to 250 km/h. lighting bathes the interior in atmospheric light that can be
Numerous ‘Simply Clever’ features are further testimony to set to one of ten colours.
the car’s practical talents. The new front end, attractive rear Compared to the Octavia models in India, the sports chassis
design and new Alcantara sporty interior gives the OCTAVIA lowers the body of the ŠKODA OCTAVIA RS 230 by 15 mm. The
RS 230 a distinct and dynamic character and will be available standard Hawk Anthracite alloy wheels are 17 inches in
in four exciting sporty colors of Race Blue, Steel Grey, Corrida diameter. The DSG with Sport mode, as well as the
Red and Candy White. electronically regulated XDS+ limited-slip differential are also
The bumper is designed with a bold horizontal line, has broad part of the standard equipment

News Basket

Mercedes-Benz Opens Goa’s
Largest 3S Luxury Car Dealership

Mercedes-Benz inaugurated the largest 3S luxury car The state-of-the-art 3S facility is conveniently located at
dealership - Counto Motors in Goa. The dealership was Ribander - between the main city of Panjim and Old Goa in
inaugurated by Roland Folger, MD & CEO, Mercedes-Benz the district of Ilhas on NH4A. The workshop is spread over an
India and Aakash Khaunte, MD, Counto Motors. area of 25,000 square feet, staffed by 28 professionally
trained personnel with a capacity to service/repair
Speaking on the occasion, Roland Folger, said, “At Mercedes- approximately 15 cars per day. The workshop also comprises
Benz India, we strive to create novel avenues of proximity a dedicated body shop as well. Counto Motors houses a 9-
with our discerning customers, across the country. We aim car display and hosts 14 bays dedicated for maintenance
to provide the best customer experience by offering our and repairs. The new world-class 3S facility will sell and
patrons the best of our products and services across markets. service all the variants of Mercedes-Benz cars. In addition to
It is state-of-the-art facilities like Counto Motors that helps this, the facility will also provide free-pick and drop services
us in pursuing our carefully curated ‘Go to Customer’ strategy, across the state of Goa, separate driver and customer lounge
which has been giving us a competitive edge in the market. with TV and WiFi access, quick service, variety of official
We are glad to have partners like Counto Motors, who with Mercedes-Benz accessories and merchandise to choose from.
their deep market experience have ensured a superlative Aakash Khaunte said, “We are delighted with this opportunity
customer experience. With this new luxury car dealership, to deepen our 7 year long relationship with Mercedes-Benz.
we are deepening our commitment and providing ‘modern In recent years, Goa has emerged as an important city for the
luxury’ in its truest form to our customers in and around luxury car segment. This has given us the opportunity to
Goa. The architectural concepts of the new facility respond provide our patrons and brand enthusiasts a one stop 3S
to the functional needs and our design to create spaces with luxury car destination in Goa.”
intimate atmosphere.”

In line with Mercedes-Benz CI/CD, the facility is pretty unique
and different because of the uses of angular design concepts,
which imitates Mercedes-Benz cars’ dynamic silhouette.
These angular elements are streamlined to create a visual &
aesthetic appeal. The overall design boldly communicates
the presence of non-rectangular forms, providing sensuality
and creating memorable experiences.

Hyundai Motor India Introduces Factory Fitted CNG in Xcent Prime

Hyundai Motor India Ltd (HMIL) introduced on September customers. With the addition of factory fitted CNG we are
11, the factory-fitted CNG in ‘Hyundai Xcent Prime’ making confident of meeting the request of the fleet aggregators
it the first among commercial segment sedans. for a vehicle in the commercial segment at a very low cost
Announcing the introduction of the new variant, Rakesh of ownership.”
Srivastava, Director- Sales & Mktg, HMIL said: “Superior Xcent Prime CNG comes in two trims: T & T+ and offer best-
customer experience through innovation is the hallmark in-class warranty of 100,000 kms/3 years and is specially
of Hyundai Brand DNA. As a customer centric company we tuned for CNG compatibility. The factory fitted CNG has
are committed to the growing commercial segment with many advantages, as the Xcent Prime comes with factory
Xcent Prime becoming the preferred option for our fitted SLF – Speed Limiting Function at no additional cost
to end user. Factory fitted CNG will also help ease of
registration and financing process, besides giving
registration tax benefit in select areas. Additionally, the
factory-fitted CNG will save time of installation post-
delivery, making it direct to use.

39 September 2017

News Basket

Tata Motors Rolls Out Tata
Yodha in Nepal

Tata Motors, in association with Sipradi Trading (its stylish looks and assured service guarantee. Over the next
authorized partners in Nepal), announced on September 14, six months, we look forward to launch many new variants,
the roll out of the Tata Yodha at an event in Kathmandu. under the Yodha platform."
Tata Yodha comes with impressive features that give it a According to Saurya SJB Rana, Director, Sipradi Trading,
competitive edge. It will be available in multiple variants Nepal, "Our association with Tata Motors dates back to
equipped with a powerful 85 HP 3.0L engine generating 250Nm August 1982. Over the years, Tata Motors has expanded their
of torque, making it a category leader. This, along with its position in the Nepalese market and we at Sipradi will
best-in-class ground clearance make the new Tata Yodha continue to support these products with the best purchase
suitable for diverse business requirements like transporting and high quality after sales service experience. Tata Yodha
agri-produce (fruits and vegetable), poultry, fish, milk, cash with its promising features strengthens our belief in Tata
van, service support vehicle at construction sites, etc. Motors vehicles, which are known to offer high value
Rudrarup Maitra, Vice President - Commercial Vehicles, proposition to the Nepalese customer, for their utility,
International Business, Tata Motors, said, "Tata Motors is ruggedness and fuel-efficiency."
Nepal’s No. 1 commercial vehicle brand. It is our constant
endeavour to meet customer requirements. Tata Yodha has
been conceived after taking thorough feedback from the
customers and keeping their day-to-day requirements in
mind. It is a workhorse that will put in as much effort as the
user, in his business. Tata Yodha promises non-stop
performance, unmatched comfort, integrated safety features,

Mahindra and Ford to Explore Strategic Cooperation to Drive
Profitable Growth in India

• Collaboration strengthens Ford’s commitment to India, while facilitating Mahindra’s expansion into other
emerging global markets

• Mobility, electrification and product development are key areas of potential cooperation

Mahindra Group and Ford Motor Co. agreed to explore a “Ford is committed to India and this alliance can help us
strategic alliance, designed to leverage the benefits of Ford’s deliver the best vehicles and services to customers while
global reach and expertise and Mahindra’s scale in India profitably growing in the world’s fifth largest vehicle market,”
and successful operating model, on September 18. said Jim Farley, Ford Executive Vice President and President
The agreement between the two companies will allow each to of Global Markets.
leverage their mutual strengths during a period of
unprecedented transformation in the global automotive Dr Pawan Goenka, Managing Director, Mahindra &
industry. The areas of potential cooperation include: (1) Mahindra, elaborated: “The changes facing the
Mobility programs; (2) Connected vehicle projects; (3) automotive industry globally are triggered by the
Electrification; (4) Product development; (5) Sourcing and accelerated rise of new technologies, sustainability
commercial efficiencies; (6) Distribution within India and policies and new models of urban shared mobility. Given
improving Ford’s reach within India; and (7) Global emerging these changes we see the need to anticipate new market
markets and improving Mahindra’s reach outside of India. trends, explore alternatives and look for ways to
Teams from both companies will collaborate and work collaborate even as we compete and build powerful
together for a period of up to three years. Any further strategic synergies that will allow rapid exploitation of the exciting
cooperation between the two companies will be decided at new opportunities. Today’s announcement builds on the
the end of that period. foundation laid through our past partnership with Ford
and will open opportunities for both of us.”

September 2017 40

News Basket

MSIL Rebrands its Sales Channel; Introduces Maruti Suzuki ARENA

Maruti Suzuki India Ltd (MSIL) announced on August 30, the Navigation Portal. They can explore the entire product
transformation of its retail network across India. The new portfolio, through interactive Product Vision touch screens
showrooms, christened Maruti Suzuki ARENA, will sport at the showroom. A dedicated Personalization Zone with car
modern looks and offer a warm, friendly and comfortable configurators will enable customers to electronically
environment to the customers. Leveraging the power of digital personalize cars by a mix and match of accessories.
technology, Maruti Suzuki ARENA promises to serve and Technology will also assist the Relationship Managers who,
delight customers in several ways. equipped with tablets and an app, will showcase the wide
With Maruti Suzuki ARENA in place, the company will have range of Maruti Suzuki products and variants to customers
four distinct retail channels: Maruti Suzuki ARENA, NEXA, for ease of comparison.
Commercial and True Value, addressing needs of all customers. The new showrooms will have a dynamic facade with a trendy
Maruti Suzuki ARENA connotes a place where people come blue signature design element and an Active Experience
together and experience something exciting. Terrace. Valets will greet car buyers in this space.
Digital integration is a key differentiator at Maruti Suzuki A Coffee Consultation Area and an Owners Lounge will set
ARENA. Customers can now experience the convenience of the mood for friendly conversations.
booking their cars or even personalizing through a new Maruti Suzuki ARENA is a part of Company’s Transformation
website. This is poised to strongly connect with the young 2.0 initiative. It is built on the pillars of design, technology
and do-it-yourself generation of customers and delight them. and experience. The modern showrooms are spacious and
Introducing Maruti Suzuki ARENA, Kenichi Ayukawa, MD & designed in a way to indulge customers in a friendly and
CEO, MSIL, said, “Maruti Suzuki ARENA is at the core of our warm environment. Simultaneously, Maruti Suzuki ARENA is
strategy to transform our network and meet customer powered by technology to use the digital medium to connect
expectations. Maruti Suzuki ARENA will enhance transparency with the customers.
and delight customers with an exciting purchase experience, This transformation is built on continuous research, listening
seamlessly from the digital space to physical showrooms. I to customer voice and anticipating future trends. The effort
am sure it will create a lasting relationship with our is to be in sync with ever evolving customer needs and offer
customers. With Maruti Suzuki ARENA, we take an important them experiences at par with global benchmarks.
step forward in our journey of transformation.” The company targets to set up over 80 Maruti Suzuki ARENA
Nearly 75% car buyers in India research online before they by March 2018. Progressively, existing showrooms across
decide on a purchase. At Maruti Suzuki ARENA, customers, India will focus on extending the Maruti Suzuki ARENA
who register on the website can start their journey seamlessly experience to customers.
in the showroom by entering their mobile number on the

41 September 2017

News Basket

Isuzu Motors Strengthens Dealership Network in Gujarat

Inaugurates the third dealership of Torque ISUZU in Gujarat

Isuzu Motors India Pvt Ltd reinforced its footprint in Gujarat ISUZU vehicles have a very high acceptance in Gujarat market
by opening a new dealership outlet – Torque ISUZU in and we will continue to build the brand in this region. As a
Vadodara on September 21. The company has two operating dealer partner we will continue our focus on high customer
dealerships in Gujarat, at Ahmedabad and Rajkot. On the satisfaction by maintaining the high standards of sales and
occasion of the new dealership inauguration, Isuzu Motors service set by ISUZU.”
India also launched the ISUZU D-MAX V-Cross in the bold The showroom of ‘Torque ISUZU’ in Vadodara has been
new Ruby Red colour. designed and built according to the new ISUZU dealership
Speaking on the occasion, Hitoshi Kono, Dy MD, Isuzu Motors standards. The dealership employees have been trained under
India, said, “We are pleased to inaugurate our new 3S facility the supervision of ISUZU personnel and will provide a quality
in Vadodara. Gujarat has been a very important market for customer experience to the visitors.
ISUZU and we see a huge potential for the ISUZU D-MAX pick- ISUZU D-MAX V-Cross
ups. Vadodara is one of the key industrial hubs of western ISUZU D-Max V-Cross is India’s first adventure utility vehicle,
India and we are confident that the discerning customers of and caters to those SUV buyers, who seek adventure and want
this region will appreciate the quality, reliability and to stand out among their peers. V-Cross comes with a highly
refinement of ISUZU vehicles. Torque Group is one of our key capable 4WD, loads of modern SUV features and a large
dealer partners in India and we are happy to extend our practical luggage deck. Isuzu D-Max V-Cross has been
association to the Vadodara market.” awarded as the ‘Lifestyle Vehicle of the Year’ at the BBC
Kuren Amin, MD, Torque Commercial Vehicles Pvt Ltd, said, Magazine TopGear Awards & CNBC-TV18 Overdrive Awards
“We are very happy to strengthen our relationship with ISUZU 2017. V-Cross is available in the aggressive ruby red color
Motors with the opening of our new dealership in Vadodara. along with a range of other exciting colours

Get Yourself GST Ready- Another initiative by FADA

There are a number of issues arising out of the GST implementation, which are bothering the automobile dealer
fraternity. To address these issues & concerns, FADA has tied up with GSTStreet to provide education and guidance
through digital learning initiative.
This is customized to automobile industry covering 30+ business scenarios in simple language. Get yourself and your
staff enabled in GST to reap benefit of expert connect and Q&A support in experts led virtual community till 31st
December 2017.
FADA and GSTstreet are committed to offer best experts providing guidance to all members on registration, transition,
migration, automation, input matching, composition, rate and schedules like many evolving migration issues.
This Course worth Rs. 10,000 plus GST has been negotiated for FADA members at special price of 5,000 plus GST. To claim
this rebate, use coupon code “FADA”.
All your queries regarding GST raised by members registered for this Course will be answered till 31st December 2017
and GSTStreet will include all of them in an exclusive community led by well known experts.
For taking advantage of this subsidized tie-up with GSTStreet.com and registration, please visit www.gststreet.com
and get yourself on to journey of GST enablement with the help of national level well known GST experts @gststreet.
You should submit your Queries to expert by using common Q&A form made LIVE on the Learning portal (only for
registered members).
For further details you may visit www.gststreet.com and www.gststreetmall.com or get in touch with GSTStreet :
Mr Rishabh K Sawansukha, Twitter - @StreetGST, E-mail - [email protected].

September 2017 42

Competition Law Updates

KFTC imposes sanctions on has prepared its draft report on the study of the new-
international cartels of car car-retailing industry after it accused Ford Australia of
shipping firms misleading customers and accepted assurances from GM
Holden that it will obey consumer laws.
The Korea Fair Trade The report highlights three key complaints:
Commission (KFTC) has • Automakers’ complaint-handling systems and policies
decided to impose
remedies and a total fine are preventing consumers from obtaining the
of 43 billion on 10 remedies to which they are entitled under Australian
automobile shipping consumer law.
companies for rigging • A mandatory scheme is needed for automakers to
prices and colluding to share technical information with independent
divide the market. repairers.
• New-car buyers need more accurate information
G R Bhatia, Partner & Head, The nine car shipping about the vehicles’ fuel consumption and emissions.
Competition Law Practice Group, companies including Supreme Court stays COMPAT order that imposed
Japan’s Nippon Yusen penalty on 3 car companies
Luthra & Luthra Law Office The COMPAT by its order dated 09.12.2016 concurred
with the findings of the CCI and directed Ford, Toyota
Kabushiki Kaisha (NYK) colluded between August 26, 2002 and Nissan, to remove all restrictions imposed through
and September 5, 2012 in global biddings offered by car agreements on auto parts suppliers so as to open up
manufacturers including General Motors that they should market for spare parts, remove all restrictions on supply
“respect”each other and let each other win the existing of spare parts by original equipment suppliers to
contracts. The shipping companies “respected” each authorized dealers etc.
other and helped one another to preserve the existing On appeal, Hon’ble Supreme Court has stayed the
contracts by not participating in the bidding (“no service”) operation of the COMPAT’s order and the matter will be
or submitting bids at high prices (“high ball”). taken up for arguments on the next date of hearing.
Brazil anti-trust enforcer decides to prosecute against
Nippon Yusen Kabushiki Kaisha (NYK) fined AU$ 25 million petrol stations for cartel conduct
for participation in global cartel Brazil’s CADE will be prosecuting 35 petrol stations, 22
individuals, three distributors and a trade association as
The federal court of Australia has handed down AU$25 they colluded to fix the prices and coordinate their
million ($19.8 million) fine to Japanese shipping company behaviour in order to eliminate competition.
Nippon Yusen Kabushiki Kaisha over its participation in a The investigative arm of CADE has disclosed that the
global cartel focused on the transportation of vehicles cartel was implemented through telephone calls and
and its impact on the country. meetings of representatives of the petrol stations and
distributors between June to December 2013 to fix the
According to the Australian Competition and Consumer prices of fuel.
Commission, this is the first successful prosecution under If the charges are proven, it is estimated that the
cartel provisions of Australia’s Competition and Consumer companies may face fines of up to 20% of turnover for
Act established in 2010. The decision stems from a guilty the year prior to the start of proceedings; and the
plea entered in the Australian court by NYK in July 2016 individuals could each be fined up to 2 billion reais (€534
over cartel charges levied by the Australian million)
Commonwealth Director of Public Prosecutions (CDPP).

The CDPP has accused NYK of conspiring with other
shipping companies to fix shipping rates, divide up
customers and rig bids for roll-on, roll-off cargo shipping
of items such as cars and trucks.

Australian Consumer Agency Comes Down on
Automakers

The Australian Competition and Consumer Commission

43 September 2017

Consumer Case Studies

National Consumer Disputes Redressal Commission, New Delhi

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

Ram Krishna Bharti – Petitioner
Versus

Raman Distributor Pvt Ltd and Anr – Respondents

Revision Petition No. 1013 of 2015 Decided on 27.04.2017

(Against the Order dated 12/01/2015 in Appeal No. 151/2009 of the State Commission Uttar Pradesh)

Important Point

Making application for permit and registration of vehicle is primarily the responsibility of the Complainant and he cannot claim
the fine paid by him for plying the vehicle without proper permit & registration, as compensation from the Opposite Party.

Order

1. Dr B C Gupta, Presiding Member - This Revision Petition Complainant alleged in his complaint that the value of
has been filed under section 21(b) of the Consumer
Protection Act, 1986 against the order dated 12.01.2015, Classic Cruiser vehicle was Rs.4,25,000 whereas that
for Classic Toofan vehicle was Rs.3,39,800. In this way,
passed by the Uttar Pradesh State Consumer Disputes an excess amount of Rs.85,200 had been charged by the
Redressal Commission (hereinafter referred to as ‘the
State Commission’) in First Appeal No. 151/2009, “Raman OPs. Through the consumer complaint, the Complainant
demanded a sum of Rs.3,35,200 as total compensation
Distributor Private Limited Vs Ram Krishna Bharti”, vide as per the following details:-
which, while partly allowing the appeal, the order dated
30.12.2008, passed by the District Forum Chandauli in (i) Rs.85,200 as difference in cost between the two
Consumer Complaint No. 60/2005, filed by the present models of the vehicle;
Petitioner, allowing the said complaint, was modified.
(ii) Rs.50,000 as expenses incurred for private registration;

2. The Petitioner/Complainant Ram Krishna Bharti filed (iii) Rs.1 lakh as compensation for mental agony; and

Consumer Complaint No. 60/2005 before the District (iv) Rs.1 lakh as loss of income till the conversion of the
vehicle to Maxi Cab.
Forum, saying that he had approached the Opposite
Party/OP-1/Respondent No. 1 - Raman Distributor 3. The District Forum vide their order dated 30.12.2008,
Private Limited through OP-2/Respondent No. 2 - allowed the consumer complaint and directed the OPs
to pay a sum of Rs.3,32,232 along with interest @13%
Mahender Uppadhyay, who was acting as an agent for p.a. from the date of institution of the complaint. The
OP-1, about the purchase of a Classic Cruiser vehicle.
The price of the said vehicle was stated as Rs.4,25,000 amount allowed by the District Forum included an excess
amount of Rs.85,200 charged by the OPs from the
by the OP-2. The Complainant paid a sum of Rs.1 lakh in Complainant as differential cost of two models and also
cash on 22.10.2004 to OP-1 and the balance money, i.e.,
Rs.3,25,000 was arranged as loan from the Kashi a sum of Rs.57,032 towards expenses for the vehicle
challaned by the RTO on 3 occasions due to not getting
Grameen Bank. It is alleged in the consumer complaint the vehicle registered with Taxi permit. The District
that the OP-1 received money from the Complainant for
getting issued a permit for Maxi Cab from the Regional Forum also allowed a sum of Rs.80,000 for loss of income
to the Complainant. Being aggrieved against the order
Transport Officer (RTO), Chandauli, but he did not get of the District Forum, the OP-1 - dealer challenged the
the said permit issued. It is also stated that the OP-1
delivered the vehicle on 17.02.2005, but in place of same by way of an appeal before the State Commission.
The State Commission modified the order of the District
Classic Cruiser vehicle, the vehicle of another brand, Forum, saying that the Complainant was entitled for
i.e., Classic Toofan was given to him, whose price was
less than the other model. The Complainant also gave a receiving the remaining amount of Rs.19,417 as
differential cost of the vehicle, Rs.10,000 as litigation
sum of Rs.23,000 to OP-2 on 17.02.2005 for getting the expenses and Rs.20,000 as compensation for mental
vehicle registered with the RTO, Chandauli with Maxicab
permit. The OP-1 handed over the permit for private agony. The State Commission ordered that a sum of
Rs.49,417 should be paid to the Complainant along with
vehicle issued on 1.04.2005 by the RTO, Bhadohi. The

September 2017 44

Consumer Case Studies

interest @ 9% p.a. with effect from 25.01.2005. Being received by the OP-1 and not Rs.4,75,000. The State
aggrieved against the said order of the State Commission, Commission observed that since the OP-1 had received
the Petitioner is before this Commission by way of the a sum of Rs.4,25,000 against the quotation given for
present revision petition. Rs.3,39,800, they were required to pay the difference of
Rs.4,25,000 - Rs.3,39,800 = Rs.85,200 to the Complainant
4. During arguments, it was stated by the learned counsel or the Bank. Since the OP-1 had already returned the
for the Petitioner that the vehicle, in question, had been sum of Rs.65,783, the remaining amount of Rs.85,200 -
sold in the year 2015, but the Petitioner was liable to be Rs.65,783 = Rs.19,417 was required to be refunded by
compensated for the loss suffered by him due to the action the OP-1. This contention of the State Commission is
of the OPs. The OPs should have got the vehicle registered erroneous, considering the fact that as stated the by OP-
as a commercial vehicle and not as private vehicle. 2, the OP-1 had received net amount of Rs.4,09,217 from
Moreover, they had provided a different model of the the Complainant/Bank, after returning the said amount
vehicle to the Complainant than that was promised. of Rs.65,783 to the Bank. In this way, the OP-1 is required
to return a sum of Rs.4,09,217 - Rs.3,39,800 = Rs.69,417
5. The learned counsel for the Respondent stated that they to the Complainant and not Rs.19,417. In nutshell, it is
had already complied with the order of the State stated that since the Bank advanced a sum of Rs.3,75,000
Commission and paid the necessary amount to the to the OP-1 and not Rs.3,25,000 as stated in the affidavit
Petitioner. The learned counsel further argued that since of the OP-2, the OP-1 is required to refund an additional
the vehicle had been sold, the Petitioner no longer sum of Rs.50,000 to the Complainant, meaning thereby
remained a consumer.

6. We have examined the entire material on record and that instead of Rs.19,417, the OP-1 should be asked to
given a thoughtful consideration to the arguments
advanced before us. return a sum of Rs.69,417. Resultantly, the amount
allowed by the State Commission stands revised from
Rs.49,417 to Rs.99,417. The impugned order is, therefore,
7. A material document for consideration in the matter is required to be modified accordingly.
the affidavit filed by the OP-2/Respondent No. 2, Mahender
Uppadhyay before the District Forum, in which he stated 9. The next point for consideration in the matter is that
that he was the agent of the OP-1 Raman Distributors and according to the Complainant, his vehicle was impounded
he had briefed the Complainant at the time of purchase
about both the Classic Cruiser and Classic Toofan vehicles. by the transport authorities three times, as it was being
plied without proper permit. The Complainant has tried
The OP-2 stated that the Complainant had agreed to to put the blame on the OP-1 for not obtaining the permit
purchase Classic Toofan vehicle and hence, the OP-1
brought the said vehicle from Madhya Pradesh and for him. This contention of the Complainant is wholly
unjustified, because it was the primary responsibility of
handed over to him on 17.02.05. The OP-2 further stated the Complainant to make an application for the said
that the values of the Classic Cruiser and the Classic Toofan
vehicle were the same at Rs.4,25,000. However, when the permit and get the same from the concerned authorities.
In any case, the Complainant should have refrained from
Complainant demanded the quotation of the vehicle from plying the vehicle, till the requisite permit had been
OP-1, the value of the Classic Toofan vehicle had been
quoted as Rs.3,39,800. The Complainant himself had got obtained from the statutory authorities. Even if he had
paid money to the OPs for getting the registration done
the registration done. The OP-2 has also stated in his and for obtaining the permit, the Complainant is guilty of
affidavit that the Complainant had made cash payment of
Rs.1 lakh to the OP-1 dealer and the Kashi Grameen Bank running the vehicle without the permit or the registration.
It is evident, therefore, that the Complainant does not
had made payment of Rs.3,75,000 to the said dealer OP- deserve compensation on this account.
1. However, a sum of Rs.50,000 was returned to the Kashi
Grameen Bank, Ali Nagar on 25.01.05 by way of PO No. 10. From the foregoing discussion, it is held that the
46672. Further, a sum of Rs.15,783 was returned to the Complainant is entitled to get a sum of Rs.99,417 from
said Bank vide PO No. 008 dt 17.02.05, meaning thereby the OP-1 along with interest @9% p.a. with effect from
that a total sum of Rs.65,783 had been returned to the 25.01.2005. The impugned order passed by the State
Bank. Thus, the OP No. 1 had received a net sum of Commission stands modified accordingly. It is further
Rs.4,09,217 towards the cost of the Classic Toofan vehicle. ordered that the said payment shall be made within a
period of six weeks from the date of this order, by the OP-
1 to the Petitioner/Complainant. The revision petition
8. A perusal of the impugned order recorded by the State stands disposed of in the above terms. There shall be no
Commission reveals that they have made their conclusion
on the presumption that a sum of Rs.4,25,000 was order as to costs

45 September 2017

Fuel Watch

Impact of Hurricanes on Oil Prices

Steve Austin for OIL-PRICE.NET

Harvey, making landfall as a Category 4 hurricane, of crude is also exported each day. According to the US
battered sou theast Texas a few days ago. Though Bureau of Safety and Environmental Enforcement the
downgraded to a tropical storm later on, it left a trail of storm has cut off about 24% of oil production in the Gulf
massive destruction including loss of lives, in its wake. of Mexico and 26% of Natural gas production.

With many parts receiving more than fifty inches of rain, Furthermore, the Gulf coast contributes almost one-fifth
Houston, the fourth largest city in the US, took the brunt of total oil output in the US. It also houses about one-
of resultant flooding. The extent of damage is yet to be third of US's capacity to turn oil into gas, diesel and
ascertained. However, according to the Harris County other byproducts. Harvey knocked off about a quarter of
flood control district, an estimated 136,000 structures that oil, nearly 430,000 barrels of oil per day, produced
in the Houston area were affected because of flooding in the Gulf of Mexico.
rainfall. About sixty people lost their lives. At least two To be sure, more than 20% of US refining capacity have
oil spills have been reported from Texas because of been affected. According to the Energy Department about
Harvey. The Trump administration has requested $7.85 ten refineries in the Gulf coast were on lockdown because
billion for the initial recovery efforts. of Harvey. Clearing the debris from the channels and ports
As for oil, Harvey caused refinery shutdowns, flooded so as to enable the smooth flow of crude oil to refineries
wells, port closures and oil production outages. As such, will take some time.
we take a detailed look at the damages unleashed by And, what about the pipelines? The colonial Pipeline, the
Harvey and its impact: biggest fuel system in the US, that transports more than
Within the various oil sub-sectors, the consequences of 100 million gallons of heating oil, gasoline, and aviation
Harvey are more dire for Downstream. As opposed to the fuel, begins in Houston. The main diesel, jet and gasoline
exploration and production in the upstream sector, lines of this pipeline have been temporarily shut because
downstream is where crude oil is processed, purified, of lack of fuel. Along the same lines, the main line of the
marketed and distributed. In many ways, downstream Explorer Pipeline with a capacity of 660,000 barrels per
operations are closer to everyday life. An important part day hauling fuel from the Gulf coast to the Midwest region
of downstream sector is refining. has been shut too. Two East coast refineries have run out
When refining capacity is affected, due to natural events of gasoline meant for immediate delivery.
like hurricanes or due to technical outages, the processing More than 1 million barrels a day of oil is expected to
of oil into fuels slows down. This leads to turbulent oil remain offline in the Houston/Galveston area alone. In
prices because of short supply. But at the same time, total, Harvey shunted about 4.4 million barrels of oil per
hurricanes and storms result in lower gasoline demand day of refining capacity.
due to lower consumption. So, in truth, the effects of a The oil prices, in the aftermath of the hurricane, are yo-
storm are felt only after a week of the real event, when yoing with no clear picture. On the final day of August,
downstream operations return to normalcy. Hurricanes retail gasoline hit a two year high clocking $2.59 a gallon
Harvey, Irma and Jose were was no exceptions. in the US over anxiety on fuel shortages. For the week
The southern-eastern Texas coast, where Harvey stuck, is ending on September 2, Brent went up by 0.65 per cent.
a major oil hub filled with ports, terminals and refineries. However, US crude met a weekly decline of 1.25 percent.
Particularly, Houston, Texas city and Baytown regions Initially, crude oil prices showed weakness due to low
have eleven refineries that together manage 2.7 million demand for oil. By September 5, the benchmark US
barrels of oil a day, or about 14% of the nation's refining gasoline futures recorded a fall by more than 3 per cent,
capacity. while US oil prices soared to their highest in three weeks.

In fact, more than 3 million barrels of crude moves to the Meanwhile, the US Government has approved the release
Gulf coast everyday from countries like Mexico, Saudi of about 4.5 million barrels of crude from the Strategic
Arabia, Venezuela and Colombia. About 1 million barrels Petroleum Reserve. Earlier, a withdrawal of 1 million

September 2017 46

Fuel Watch

barrels from the emergency stockpile was announced for the end of this year. Because of Harvey, that outlook would
a refinery in Lake Charles, Louisiana and 500,000 barrels remain a dream for some time. On the other hand, the oil
to Valero energy. The withdrawals, appearing significant drillers have returned to work in the Gulf coast. As far as
while making news, are more of a politically motivated the refineries are concerned, the aftermath have more to
symbolic gesture. Yes, we'll explain. SPR does protect the do with flooding rainfall than mechanical damages. So,
domestic economy from outside market threats like the in two to three weeks, expect the refineries to be back in
OPEC cartel. However, it is woefully useless in the face of operation. Motiva refinery, the nation's largest with
hurricanes because, simply put, if refineries are down, 600,000 bpd capacity, had already restarted about forty
more oil isn't going to help. percent production within days. Likewise, port operations
Meantime, OPEC and other oil exporting countries are are promptly resuming along the US Gulf coast.
striving to keep off 1.8 million barrels a day of crude off At present, Europe, with a surplus of gasoline, has stepped
the market to lower the crude oil stockpiles of oil in with additional gasoline shipments. However, as soon
importing countries. But, the weaker demand will keep as the refineries return to normalcy, the shipments from
the calculations continually wrong. In the US, the crude Europe will fall back.
oil inventories stand at 463.2 million barrels. Crude oil Hurricanes are a yearly occurence. Unlike earthquakes,
imports in the US averaged 8.8 million barrels a day with hurricanes are predicted weeks in advance allowing
an increase of 664,000 barrels per day, according to the remediation measures to be put in place and minimize
EIA. impact. The Texan downstream sector was up and running
Conclusion within days of hurricane Harvey. Despite what sensational
Not long ago, the oil industry was banking on a sunny headlines would lead one to believe, refineries are well-
target of 10 million barrels per day in oil production by oiled machineries - no pun intended - built to weather
this storm, and then some

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]

47 September 2017

NADA Musings

Intel Collaborates with Waymo on Self-Driving Computer Design

Intel Corp on September 18 announced a collaboration with acknowledged a collaboration with a supplier. Waymo, which
Alphabet’s (GOOGL.O) Waymo self-driving unit, saying it had began as the Google self-driving car project, has done most
worked with the company during the design of its computer of its development work in-house.
platform to allow autonomous cars to process information The Waymo logo was displayed during the company's unveil
in real time. of a self-driving Chrysler Pacifica minivan during the North
The world’s largest computer chipmaker said its Intel-based American International Auto Show in Detroit, Michigan.
technologies for sensor processing, general compute and Intel began supplying chips for the autonomous program
connectivity were used in the Chrysler Pacifica hybrid beginning in 2009, but that relationship grew into a deeper
minivans Waymo has been using since 2015 to test its self- collaboration, when Google began working with Fiat Chrysler
driving system. Automobiles to develop and install its autonomous driving
Intel Chief Executive Brian Krzanich said that Intel built “a technology into the automaker’s minivans. Those vehicles
custom piece of silicon” that fits Waymo’s sensor fusion began test drives at the end of 2016.
needs and tapped Intel’s processing power. Waymo, which has developed its own sensors, is not using
“Over time we’ll both learn we can bring more of the software the autonomous vision system created by Mobileye.
... down onto the silicon, because you get performance, cost Underscoring the non-exclusive partnerships and
and power,” Krzanich said. “There will be a regular cadence collaborations in the space, Mobileye and Intel are in an
of new innovation and new silicon that comes out. That’s alliance with German automaker BMW and Fiat-Chrysler to
really what we both get out of this.” create an industrywide autonomous car platform.
Intel, which announced the $15 billion acquisition of Waymo CEO John Krafcik said fast processing was crucial to
autonomous vision company Mobileye in March, is pushing the performance of its autonomous vehicles.
to expand in autonomous vehicles, a fast-growing industry, “Intel’s technology supports the advanced processing inside
across a variety of business models. A collaboration with our vehicles, with the ability to manufacture to meet Waymo’s
Waymo, considered by many industry experts to be at the needs at scale,” Krafcik said.
forefront of autonomous technology, adds to its portfolio.
The announcement marked the first time Waymo has Intel also said it had invested $1 billion in artificial
intelligence companies over the past three years.

US Auto Dealers Make Their Voices Heard on Capitol Hill During
NADA's Washington Conference

Auto dealers and automotive trade association executives The Conference's general session featured Rep. Sean Duffy
from around the country traveled to Washington, D.C. during (R-Wisc.). Congressman Duffy engaged the crowd detailing
the second week of September to attend NADA's annual efforts by the House Financial Services Committee to uncover
Washington Conference and lobby their local members of the Consumer Financial Protection Bureau's abuse of power
Congress. Nearly 500 dealers and state association in its attempt to eliminate dealer discounts in the showroom
executives attended 300 meetings with Capitol Hill lawmakers and his thoughts on the historic 2016 election. US Secretary
over the two-day conference. The Washington Conference also of Transportation Elaine Chao then took the stage to give a
featured prominent speakers, and a reception at the well-received speech on the Department of Transportation's self-
Smithsonian National Museum of American History to driving car policies and its continuing commitment to safety.
celebrate NADA's 100th anniversary. Fox News media personality Tucker Carlson closed out the
Sen. Lindsey Graham (R-S.C.), a leader on high profile issues general session to a packed crowd by giving his unique
in the Senate, addressed dealers at lunch session and perspectives on living in Washington under the Trump
discussed prospects for tax reform. Rep. Don Beyer (D-Va.), administration. His speech was filled with his well-known
who is also a Volvo-Kia-Subaru-Land Rover-VW dealer, gave wit and honest commentary.
his perspectives on the budget issues before Congress and First on the dealers' agenda during Hill meetings was the
stressed the need for corporate tax reform and treating pass- preservation of state vehicle licensing and franchise laws in
through entities fairly. an upcoming Senate self-driving cars bill. As Congress

September 2017 48

NADA Musings

considers legislation to advance self-driving vehicles, any Auto dealers also showed their opposition to overbroad recall
legislation must ensure that the states' traditional role of bills (S. 1634/H.R. 3449), which would prohibit the sale or
regulating motor vehicle commerce is preserved. wholesale of any used car under open recall by a dealer.
With Congress focusing on tax reform, dealers took this These bills would hurt customers by lowering their trade-in
opportunity to tell members of Congress their tax reform value and diminish recall completion rates as customers
priorities. Dealers stressed that overall changes to the tax turn to private sales rather than trading their used car in at
code should not negatively impact small business a dealer.
dealerships. Ideas dealers support for inclusion in a tax Even with hurricanes Harvey and Irma, attendance for
reform bill include eliminating the estate tax, treating pass- the Washington Conference remained solid. National
through entities fairly, and maintaining the LIFO inventory Automobile Dealer Association’s leadership highlighted the
accounting method. Additionally, dealers outlined their NADA Foundation's Emergency Relief Fund, which
opposition to eliminating or limiting interest deductibility continues to provide financial assistance to dealership
and limiting advertising deductibility. employees in these disaster-affected areas.

Carfax Says Flooded Cars Could Flood Used-Car Market

“Flooded cars rot from the inside out as water corrodes Historically, about half the vehicles damaged by floods end
the mechanical parts, shorts the electrical system and up back on the market, Carfax says.
compromises safety features like airbags and anti-lock “I bought a car last year and the seller never told us anything
brakes,” Carfax says. Health concerns are an added about it being a flood car,” the release quotes Pennsylvania
problem. resident Charlene Geiger as saying. “When we got home and

There are an estimated 325,000 previously flooded cars on ran a Carfax (vehicle-history report), there it
US roads, up 20% from 2016, and that number could grow by was – a flood car from Hurricane Sandy. It showed
several hundred thousand in the wake of hurricanes Harvey that the seller bought it as a salvage car and
and Irma, Carfax says. the title was washed when he brought it to
In a news release, the provider of vehicle-history information Pennsylvania. We lost $16,000 over all of it.”
cites data from state motor-vehicles departments, insurance According to Consumer Reports, title washing
companies and other sources, and says the state with the is a scam in which a damaged vehicle branded
most vehicles reported as damaged is Texas, with 51,000. as junk in one jurisdiction is registered in
Ranked second with 29,000 is Louisiana, which along with another, moving from state to state until one
Texas was hit hardest by Harvey. state with slightly different regulations brands
Pennsylvania ranked third with 20,000 flood-damaged the same vehicle as “salvage” but repairable.
vehicles, followed by Florida (19,000) and Kentucky (16,000). “Flooded cars rot from the inside out as water
corrodes the mechanical parts, shorts the
electrical system and compromises safety
features like airbags and antilock brakes.
Health concerns are an added problem, as mold and bacteria
permeate the soft parts of the car,” the Carfax release says.
“Our data shows there's still much work to be done in helping
consumers avoid buying flood-damaged cars,” Carfax
President Dick Raines said. “They can, and do, show up all
over the country, whether it be a few miles or hundreds of
miles from where the flooding occurred. With two devastating
storms already this year, it’s vital for used-car buyers
everywhere to protect themselves from flooded cars that may
wind up for sale.”
Carfax is allowing consumers to check for flood damage at
carfax.com/flood at no cost

49 September 2017