F A D A Journal - May 2018

President’s Message

Presenting to You, the
New Age F A D A Journal

A new beginning – a fresh approach!

Passenger Vehicles grew by 76%, 17% and 7.5%
respectively. This growth was due to recovery in semi-
urban and rural markets, besides stable urban demand
which was specially boosted by the auspicious Akshaya
Tritiya festival.

John K Paul, President The Honourable Hyderabad and Madras High Courts have
recently given orders in favour of the new vehicle owners
Dear Dealer Colleagues, that State Transport Departments can only charge Life
Tax on the Invoice Price and not on Ex-Showroom Price.
I am sure that by now you would have noticed the new This will bring huge savings for the vehicle buyers. While
look and feel of F A D A Journal up close in your hands. I am on the subject, Ministry of Road Transport and Highways
as excited as you are with this change! This change was (MoRTH) had rolled out a Draft Notification on Amendment
not only overdue but to keep pace with time it was the in CMVR Act, 1989 for High Security Registration Plates
need of the hour. F A D A is a 53 years old body and as the and had asked for stakeholders comments. F A D A has
young breed of leaders are now re-branding F A D A, the sent its views to the Ministry and members who want to
Journal should also have a makeover on similar lines. While obtain a copy of the same can write to the Secretariat at
the Journal boosts an entirely new cover design, it now [email protected] .
also inculcates improved content with key takeaways
specially for the Auto Retail Industry. This year’s Event Calendar begins with Vyapar Patna on
14th June’18 which is happening at Hotel Maurya. It will be
Coming to the Economic health of the country, while the followed by Vyapar Lucknow on 14th July’18. Members are
manufacturing sector growth slowed to 4.4% compared requested to kindly make a note of these dates and try to
to 8.5% in February’18, the industry group of “manufacture make sure that they attend the same. As usual, F A D As
of motor vehicles, trailers and semi-trailers” grew by 17.2% Vyapar Events will bring with itself newer learnings and
during the same period. This shows that the Automobile ways with which we can counter the disruptions which are
Industry is back on track after facing road bumps during knocking on our doors.
the previous FY.
F A D A is now entering the next orbit of momentum and
growth and I am sure that in times to come, you will
notice higher degrees of engagement between the apex
body and its members. To leverage the same I will request
all of you to bring in Dealer friends who are not yet
associated with us. It will not only make F A D A strong
but will also make our industry stand as one and of course,
stronger!

With best wishes,

Yours sincerely,

The Indian Auto Industry started the new FY on a strong
note as sales of Commercial Vehicles, Two Wheelers and John K Paul

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



India Economics

Inflation: High Fuel Prices Push
April Retail Inflation to 4.6%

The setback in the March IIP growth was largely led by inflationary pressures are firming up indicating recovery in
contraction in the capital goods sector, after a continuous pricing power. Improving demand conditions amid rising
seven months of robust performance. On the other hand, commodity prices are beginning to reflect in higher core
consumer non-durable goods remained firm reflecting strong inflation metrics. Annualized core inflation rose to a 44
rural demand. month high of 5.92% in April compared to 5.37% in March.
CPI inflation for April came in at 4.6% YoY, up 30bps from CPI inflation higher than expected
March. The negative surprise was, essentially, led by core CPI inflation for April came in at 4.6% YoY, up 30bps over
inflation, which rose across several categories. Thus, core CPI March. While food inflation was benign, core inflation came
(ex-oil and precious metals) climbed 30bps to 5.8% YoY, the in as a surprise.
second straight month of rise. The rise was particularly Core CPI picked up pace for second straight month
pronounced in services categories such as health, education The negative surprise came in on the core inflation front,
and, to some extent, household requisites. Meanwhile, food which jumped 60bps to 5.9%. Of course, rise in energy prices
inflation was benign at 3% YoY (unchanged from March) did play a role, but even excluding commodities (core CPI,
despite low base, helped by sharp fall in vegetable prices. ex-commodities – fuel and precious metals), core inflation
IIP growth slows to a five-month low climbed 30bps to 5.8% over and above the 20bps rise in
March IIP growth moderated to a five-month low of 4.4 led March.
largely by a slowdown in the manufacturing sector.
Manufacturing sector growth slowed to 4.4% compared to
8.5% in February 2018. Within manufacturing, eleven out of
the twenty three industry groups have registered positive
growth compared to 15 during the month of February 2018.
The industry group ‘manufacture of furniture’ has shown the
highest positive growth of 41.5% followed by 20.6% in
‘manufacture of food products’ and 17.2% in ‘manufacture of
motor vehicles, trailers and semi-trailers’. Cumulatively, IIP
growth for FY2018 stands at 4.3% compared to 4.6% in FY2017.
Inflation Data
The retail inflation data released suggests that core

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

Industry Track

Auto Sales in April Remains Buoyant

The advent of new financial year has been enthusing for the The country’s largest car maker Maruti Suzuki India Limited
auto market with sales maintaining steady growth (MSIL), saw its domestic sales volumes grow by 13.4% to
momentum in April 2018 albeit over low base in the same 163,434 units during April’18. Significantly, growth came
month last financial year. The various macroeconomic in not from the company’s traditional bread and-butter
factors like investment in infrastructure development, small-car segment, but from premium hatchback Swift, Ignis,
improved industrial activities, and robust demand in Celerio, Baleno, Tour S and DZire. While sales for entry-
private consumption-led sectors are all boosting the level cars Alto and WagonR fell by 2.8% to 37,794 units,
economy thereby leading to continuing demand. off-take of Compact segment went up by 31.8% to 83,834
The improvement in consumer sentiment in anticipation of units. Sales in the Mid-Size segment (Ciaz), too went down
a good monsoon for a third consecutive year, with Interest by 27.2% to 5,116 units.
rates and inflation under control have been some of the In keeping with the trend, Korean auto major Hyundai Motor
other major reasons for boosting the Passenger Vehicle India Ltd (HMIL), recorded sales growth number in the
segment especially the UV sales in semi urban and rural domestic market at 46,735 units in April 2018, which
markets. With impending advent of three new car translated into a 4.4% growth y-o-y. Commenting on the April
manufacturers to India – Kia, MG Motors and Peugeot, there sales, Rakesh Srivastava, Director - Sales and Marketing, HMIL
will be added competition in the premium hatchbacks, said, “Hyundai did overall volume growth of 4.4% with a
crossover compact SUVs and premium compact SUV positive start in domestic market with a volume of 46,735
segments in times to come. units on the strong performance of Power Brands- GRAND
Passenger vehicle segment clocked a growth of 7.50% y-o-y i10, ELITE i20, Next Gen VERNA & CRETA contributing 79% of
in domestic sales at 298,504 units during the month of April the total sales volume under the Modern Premium Brand
2018. Domestic sales of cars grew by 4.90% to 200,183 Direction with Best After Sales Service.”
units and UV segment recorded a healthy 11.92% increase The company’s exports also increased by a massive 12.0%
at 79,136 units during the month. The exports that helped to 13,009 units from 11,610 units a year earlier. The
to boost the sales volumes of passenger vehicles in the segment-wise cumulative sales of HMIL for April 2018 were:
earlier months declined sharply by 15.89% y-o-y to 50,921 Mini segment (Eon, Santro) – 4,663 units; Compact Segment
units from 60,538 units a year ago. This is the first decline (i10, i20, Getz, Grand i10, Xcent, Elite i20) – 28, 255 units;
in PVs exports in a decade caused primarily due to delay in Mid Size (Verna) – 4,077 units; Executive (Elantra)- 150 units;
GST refunds, prioritisation by some OEMs of domestic UV 1 (Creta) – 9,390 units; and UV 4 (Santa Fe, Tucson) - 200
market over international market and shifting small car units.
production out of India. Honda Cars India, registered monthly domestic sales of 9,143
Commercial vehicles, a barometer of economic activity, units in April 2018 against 14,480 units achieved during
stayed on course to witness a robust 75.95% growth in the same month last year, de-growth of 36.9%. However, the
domestic sales that numbered 72,993 units. Domestic sales company’s export grew marginally by 3.2% at 452 units.
numbers of CVs were shored up by M&HCVs & LCVs robust Rajesh Goel, SVP and Director, Sales & Marketing, Honda
growth of 169.26% and 43.92% respectively; and contributed Cars India Ltd, said “HCIL sales in April are as per plan. We
28,547 units and 44,446 units respectively to the domestic are preparing for the launch of All New Amaze this month
sales tally of CVs in April 2018. and did not have stocks of outgoing Amaze. Besides, City
Two-wheelers continued their excellent run, with their and WR-V which were launched last year had witnessed
domestic sales growing steadily by 16.92% y-o-y to new model sales spurt around this time. Both these reasons
1,958,241 units during the month of April’18. Two-wheeler are reflected in lower wholesales in April this year as
exports also stayed on growth trajectory, climbing up by compared to last year. It’s a temporary phenomenon. There
26.85% to 293,857 units during the month. is a very strong interest from the market for the All New
Three-wheeler sales in domestic market also remained Amaze and we are confident that overall sales will be robust
positive, gaining by 54.17% to 49,980 units. Even exports after the introduction of new model.”
accrued a healthy growth of 88.16% at 49,717 units, with Ford India’s performance in the domestic market was in
total sales of 3-wheelers (including domestic sales & negative terrain at 2.5% selling 7,428 units against 7,618
exports) growing by 69.43% during the month. units y-o-y.

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

Industry Track

Commenting on the company's performance, Anurag Mahindra & Mahindra Ltd (M&M) The 4-wheeler commercial
Mehrotra, President and Managing Director, Ford India, segment which includes the passenger and load categories
said, "Increasing inflation trajectory which might weigh on soared by 25.9% y-o-y to record 18,963 units of domestic
customer's access and cost to credit, coupled with increasing sales in April 2018. Exports for the month have also grown
crude prices could lead to passenger vehicle industry by an impressive 110%.
growing at low single digits - so far this year". Ashok Leyland another leading player in the commercial
"At Ford, we continue to execute our strategy of building a vehicle segment clocked a total sales (domestic + export) of
strong brand, introduce right products, ensure competitive 12,677 units during the month against 7,090 units during
costs and effective scale. In late April the company launched April’07 achieving a growth of 78.8%. In the domestic market,
its first crossover vehicle in India, the Ford Freestyle. However, sales surged at 86.5% selling 11,951 units against 6,408
the impact of the Freestyle entry on the company sales units in April’17. Exports by the company during the month
performance can only be assessed in May sales numbers", achieved a decent upswing of 6.5%.
added Mehrotra. VE Commercial Vehicles not to be left behind sold 3,409
Toyota Kirloskar Motor (TKM) registered a nominal sales units in April 2018 against 2,590 units in April 2017, an
growth by 0.6% per cent to 13,037 units from 12,964 units increase of 31.6% in the Indian market. In the international
in April last year. On the export front sales headed south, market, the company sold 550 units gaining 10.2% increase
slipping by 25.6% to 834 units during the month. YoY.
Passenger vehicle business unit of Tata Motors reported the Two-wheeler market sustained growth momentum with all
domestic sales in April 2018 sales at 19,157 units as against major players increasing their monthly sales volumes y-o-y.
14,066 units, a strong growth of 36.2% over last year. Tiago There was no stopping for Hero MotoCorp that recorded a
continued its strong growth momentum in the passenger 15.7% growth y-o-y to clock 677,792 units of domestic sales
cars segment and the strong demand of Nexon resulted in in April. The company’s exports were also in fast lane,
3X growth of the UV segment. On the export front as well growing by 62.9% to 16,230 units during the month.
Tata Motors achieved a decent growth of 6.2% Honda Motorcycle & Scooter India (HMSI) further
Mahindra & Mahindra Ltd (M&M) reported a 13.3% rise in consolidated its position in Indian market with a growth of
its auto sales numbers, which stood at 21,395 units during 15.2% in domestic sales of two-wheelers at 635,824 units.
April 2018 as against 18,884 units during April 2017. The The exports too headed north, gaining sharply by 70.4% at
company’s domestic sales stood at 20,395 units during April 46,077 units during April 2018 from 27,045 units a year
2018, as compared to 18,379 units in April 2017, an increase back.
of 11.0%. The Passenger Vehicles segment (which includes Bajaj Auto’s sales of two-wheelers at 200,742 units in
the UVs and Verito) grew by 13.0%, selling 21,927 units in domestic market vroomed by 24.0% y-o-y during the month.
domestic market during April 2018. The company’s exports of two-wheelers also posted a decent
Nissan Motor India (NMIPL) sold 3,526 units in April’18 growth of 12.8% to 148,875 units in April 2018.
compared to 4,217 units a year ago - a decline by 16.4%. TVS Motor recorded a growth of 17.6% in domestic sales of
M&HCVs segment of commercial vehicles continued to grow its two-wheelers at 241,604 units during April 2018. The
on a low base of last year at 144.15% at 31,354 units, aided two-wheeler exports of the company gave a sterling
by infrastructure development and opening up of the mining performance of 26.7% growth to 48,789 units from 38,510
sector. The LCV segment grew 46.20% at 47,813 units due to units a year ago.
new product launches, e-commerce and growing rural The fast growing Suzuki Motorcycle India, Royal Enfield and
consumption. Farm loan waivers, rise in rural wages and Indian Yamaha Motors were in top gear posting growth of
increased Minimum Support Price (MSP) for crops also 33.6%, 26.7% and 6.5% respectively in their total sales.
helped in augmenting sales. The auto market is getting back to growth trajectory on the
The sales of Tata commercial vehicles in April 2018 in the back of overall supportive environment. Economy is slated
domestic market aggregated 34,354 units, up 132.5%. While to do well, and with good monsoon predicated, the rural
domestic sales of Tata LCVs numbering 17,784 units, surged economy too is expected to do better in comparison to last
by 75.6%, M&HCV sales expanded by 256.1% to 16,570 units year. Further, with new product launches planned in FY19,
during the month. In the international market, the company’s the market is all set to buzz with activity
sale grew by 43.1% at 2,907 units.

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





LEADER’S PATH TO
DEALERSHIP SUCCESS

Saharsh Damani |Editor, F A D A Journal |CEO, F A D A

There aren't many natural born leaders. Most leaders take question. In addition, non-verbal cues and a tone of voice
responsibility for training themselves to be effective. that imply impatience and contempt are extremely
Whether we learn from the wisdom of others or get insights counterproductive.
from personal experience, becoming a more effective leader
is about what we do, not what we know! GREAT LEADERS ARE WILLING TO INVOLVE THE FRONT LINE
IN PROBLEM SOLVING
Effective leadership is perhaps the most critical element
Problems or challenges are not always “fires”. Problems
of a dealership’s success or failure and there are 4 can include anytime we catch a team member or prospect
characteristics for Dealer Leaders who are serious about saying something like, “This is so hard,” or “I wish it could
rising to the next level need to develop and deploy. be done this way,” or Why can’t we…”. These types of phrases
are often used when a team member is frustrated with
GREAT LEADERS ARE WILLING TO LISTEN processes that are not as good as they could be.

Sounds easy, right? But we might be talking about two This is a great chance to slow down and examine what they
different things. Most people listen to respond. are indicating as every team can be a great resource for
ideas to solve that problem. After all, they are the ones
Think about it when we involved in these processes every day. So, it’s best to get
them involved in identifying the issues and assisting with
meet someone for the ideas to improve the processes.

first time or are in just Examples of issues can be schedules, inventory processing,
paperwork, systems, parking, customer flow – the list is
We can’t run a about any conversation. endless. Pay attention as a leader. Look for opportunities to
growing dealership improve internal service quality and empower your team to
If we pay attention, we’ll get involved and offer ideas.
all by our self.
Growing requires the catch ourselves GREAT LEADERS ARE WILLING TO COACH RATHER THAN JUST
DRESSING-DOWN
cohesive unity of a listening to those
team working It can be so easy to find flaws. Too many times, a flaw is
together. around us with the simply doing a task differently than we might do it. People
do make mistakes. As a leader, we need to respect those
intention of responding. who misstep. If there is one error, chances are that same
individual did 10 things correctly. It’s all about how we
We hear what someone correct them.

is saying, and we are Yelling or making fun of a team member on a Monday morning
meeting in front of the entire staff is an extreme example of
preparing what we are poor leadership. Never say anything to address errors is
the other extreme! Neither is fair to the dealership, to the
going to say next. Learn team member or to the team. Take off the annoyed boss hat
and put on the coach hat. Be positive. Sit beside that team
to shut that down. Start

practicing how to listen

to understand others, to

really get where they are

coming from.

Now let’s do this with our team members. If we or our senior
leadership don’t have the ability to listen with
understanding, we will have a problem. We can’t run a
growing dealership all by our self. Growing requires the
cohesive unity of a team working together. That unity is not
developed when we have an answer for a team member

before he opens his mouth to make a statement or ask a

12 F A D A Journal May 2018 | fada.in

Leadership

member and show him how to do the task with excellence. always be given higher
That is our responsibility!
priority than aptitude. We
GREAT LEADERS ARE WILLING TO CATCH PEOPLE DOING
THINGS RIGHT can teach the right people

Building a healthy team and a great environment means how to do a task. It’s much We must hire people
many people are doing a lot of things right, and often. Great more difficult to teach the
leadership is going out of your way to find people doing the wrong person with a bad with great
right things. I am repeating this statement because we just attitude how to be positive, attitudes. Attitude
don’t see enough of it! Find team members doing great things
and reward them for it. Sometimes reward them in front of even if they are excellent at should always be
everyone and sometimes in private. the task. In these changing
given higher
An instrument of rewarding instantaneously will do wonders times and with disruptions
to the team member’s morale who are doing things correctly.
When someone really steps up and does something great, in the Industry knocking our priority than
we must make sure that they know about it! door, we need a team of
aptitude.
We must hire people with great attitudes. Attitude should people with great and
infectious attitudes.

Positive people, we can

build an empire around and

people we can feel

confident about empowering!

Chart of the Month

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

Digitisation

Changing Gears 2020 experiences online. They also remain connected after the
purchase via their infotainment systems for content, to
How digital is transforming the face of the OEMs for real-time design feedback and to dealers for
automotive industry service alerts. The growth of mobile apps and platforms
has led to the next generation of automotive applications:
- Bain & Company a range of new mobility options including ride-sharing and
new rental formats.
Evolution to revolution New kids on the block
One of the most profound implications of these disruptions
The global automotive industry has witnessed mostly is the rapid growth of new mobility players from outside the
incremental “evolutionary” innovations in the course of its traditional automotive industry. For example, app-based cab
130-year history. Disruptive changes in production aggregators have become an integral part of the mobility
techniques, business models and categories—such as Henry ecosystem and have attained large customer bases and
Ford’s innovation of the assembly line or Hal Sperlich’s multibillion dollar valuations in very short periods of time.
introduction of the Chrysler Minivan—have been few and far And news reports suggest that in its seven-year existence
between. Uber has attained a market capitalisation of about $70 billion.
This traditional paradigm is rapidly changing with the advent The growth of these players is transforming the traditional
of digital disruptions across the value chain (see Figure 1). automotive landscape.
Digital engineering and 3-D printing are shrinking product Over time, this shift in business models and sources of
development timelines and costs. Smart sensors combined competitive advantage will transform the auto industry’s
with complex computational capabilities are enabling new profit pools. According to Bain estimates, global profits
feature designs, like Advanced Driver Assistance Systems from vehicle engineering, manufacturing and sales will
(ADAS), which have the potential to make travelling by car be redistributed by about 8% through 2025 despite overall
safer. Data transmitted from cars to OEMs encourages industry profit growth of about 35% in the same period.
preventative maintenance and results in safer and more Industry profits are being redistributed to players like
efficient vehicles. components and systems suppliers, which provide
Digital channels are also redefining customer engagement. increasingly sophisticated solutions, as well as to non-
Customers research online, buy online and share their
traditional competitors like mobility
platform providers.

The changing automotive customer

The Indian consumer is evolving into a
digitally savvy and largely mobile-first user.
India has more than 400 million Internet
users—more than the US and second only to
China. This makes it an increasingly
important market for online companies.
Facebook had roughly 184 million active
users in India as of December 2016,
compared with 209 million in the US.
People mainly use their mobile devices to
access the Internet, and this is no longer
restricted to “metro” India:

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Digitisation

• The number of rural mobile Internet users has grown by New opportunities in the automotive customer’s journey
about a 130% compound annual growth rate (CAGR) over Digital technologies are changing the manner in which
the past four years, and it now accounts for nearly 30% customers engage with automotive OEMs across the purchase
of total mobile Internet users. journey—from product discovery and consideration to
research, purchase and post-purchase transactions.
• In India, 97% of active Facebook users access the social Discovery, consideration and research
network site using a mobile device; the corresponding Digital influence is currently highest in this phase of the
number in the US is 93%. purchase journey. More than 45% of consumers say that
digital channels influenced their consideration set while 48%
These trends will only accelerate. A recent NASSCOM used online research sources. Observations from lead
(National Association of Software and Services Companies) consumers indicate that this number will grow. About 70% of
study projected that India would have 730 million Internet total automobile sales—or $40 billion—will be digitally
users by 2020 and 75% of new Internet user growth would influenced by 2020. This represents more than a doubling of
come from rural areas. Smartphone penetration is projected digitally-influenced sales from today (see Figure 2).
to double between 2015 and 2020 to about 30%, while mobile Of those digital sources, online search, OEM websites and
commerce sales are projected to increase by about six times social media have the biggest influence today. That picture is
to $38 billion in the same period. All these changes will have
a profound effect on the automotive consumer’s journey. likely to change by 2020 as search and
social media evolve into the dominant
digital influencers (see Figure 3). Each will
impact almost 40% of sales or about $23
billion in revenue. This digital advent will
be largely mobile based: More than 80% of
all online research will be conducted via
mobile phones.
Younger customers will lead the digital shift.
Digital channels influenced the consideration
set in 49% of consumers younger than 35
and 40% of those older than 35.
The dealership visit and evolving role of the
dealer
The role of the dealer is also significantly
changing as a result of shifts in digitally-
influenced customer behaviour. Dealers
have traditionally played an important role
as an information source and an influencer
in customers’ purchase decisions. This is
changing: 72% of customers have selected
a vehicle brand and 49% have chosen the
vehicle model before stepping into a
dealership (see Figure 4). As a result, the
dealer’s contribution is often limited to
influencing the variant of the vehicle
purchased.
Further, Bain’s Global Automotive Consumer
Survey shows that 66% of Indian consumers
are willing to try devices that use virtual
reality (VR) or augmented reality (AR) to test
drive vehicles. That is significantly higher

fada.in | May 2018 F A D A Journal 15

Digitisation

than in developed markets—21% in both the US and UK and activities. Up to 42% of consumers indicate a willingness to
26% in Germany. This indicates that Indian consumers have move service booking online, and about 28% indicate
a high willingness to adopt technologies that alter the willingness to move service payment and purchase of
traditional dealer role. accessories online (see Figure 5).
Dealers have started to shift towards better digital Our global research also shows that Indian and Chinese
engagement with their customers, but need to enhance the consumers have a greater willingness to shift multiple parts
sophistication of their digital outreach. For instance, more of the purchase online compared with their peers in the US,
than 80% of the dealers surveyed use bulk SMS and bulk the UK and Germany. This indicates the possibility of some
emails as a core part of their customer-targeting process. digital “leapfrogging” in markets like India and China with
This ignores the depth and accuracy of targeting that is more rapid digital movement than expected given other
possible with digital tools. economic and social factors.
Purchase and post-purchase
While digital channels are used extensively For instance, 64% of Indian automotive customers are willing
in the pre-purchase process, fewer than 1% to move the purchase process completely online or mostly
of respondents have completed the actual online (with a call or personal interaction), while in the US
purchase of their vehicles online. That and the UK, that number is only around 30%. Potential to
mirrors global trends: For example, fewer leapfrog in the Indian and Chinese markets is also evident in
than 4% of customers in markets such as the a customer’s greater willingness to adopt nascent
UK and Germany say that they have technologies, such as virtual reality or augmented reality,
purchased a vehicle online. That number is than those in developed markets are (see Figure 6).
likely to remain low in the near future
because the size of an automobile purchase Engaging beyond the purchase: Connected vehicles
tends to be a transaction that requires an
actual physical touch point. Digitally connected vehicles are no longer a nascent concept
While the actual purchase is likely to remain in the developed world, and some of these changes are
offline in the foreseeable future, Indian relevant in the Indian context. Today’s cars have an onboard
consumers have started moving online for computer and smart sensors, and high-speed mobile data
various post-purchase transactions such as connections to transmit information are prevalent. To engage
booking a service (14% of consumers), paying for vehicle customers, automotive OEMs must develop the capability to
service (10%), buying spare parts and accessories (8%) and effectively process this information and translate it into
organising a pickup or tow (3%). While these numbers lag useful services.
those of pre-purchase activities, it is clear that the digital Globally, automotive OEMs have made significant
shift has begun. advancements in using connected vehicles to improve
Willingness to go digital customer engagement. For instance, BMW ConnectedDrive is
While the pre-purchase journey already shows a high digital
influence, the next big shift will happen in post-purchase

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Digitisation

a personal mobility assistant that syncs with the customer’s Globally, auto OEMs have started responding to
smartphone for meeting schedules, infotainment, route and these changes by investing in new business
time optimisation as well as warnings and alerts. models—such as General Motors’ $500 million
Likewise in India, connectedness is becoming increasingly investment in point-to-point (P2P) service
relevant with both start-ups and established auto OEMs provider Lyft—and experimenting with
making moves in the space. Nissan recently, launched a partnerships.
connectivity device that was made available to new &
existing customers starting in 2017, which offers Some OEMs operating in India have also started
functionalities that include live updates on maintenance taking measured steps in this direction: Mahindra,
needs, as well as the ability to book service appointments Ford, Toyota and Nissan have entered into
and order spare parts. partnerships with Uber and Ola to provide easy
A host of technology start-ups, such as CarIQ, Trak N Tell, financing and other driver benefits. However,
Carnot and Elsys Intelligent Devices, have also entered this more needs to be done. While it is difficult to
space with add-on connectivity devices that work with older predict the end-state of the mobility mix that
cars through mobile apps. Indian consumers will want in the future, it is
The connected vehicle opportunity has also garnered the clear that newer mobility models are here to stay.
attention of leaders from other industries that specialise Indian OEMs must take a strategic long-term view on how
in software and IT capabilities. Google and Apple entered best to participate in this evolving mobility space, and make
the connected car space with their Android Auto and investments now in order to be the disruptors rather than
CarPlay mobile platforms, respectively, which enable the disrupted.
integrating customers’ smartphones with the vehicles’
dashboards. The way forward: Implications for OEMs

Changing customer mobility mindsets Given these shifts, five critical imperatives emerge for
automotive OEMs to thrive in this changing landscape.
The adoption of digital technologies is extending beyond the
purchase process and in-car experience. Structural changes Follow the profit: Evolve business models to tap into shifting
such as urban congestion combined with technology enablers profit pools
are leading to the emergence of new types of mobility
solutions and shifts in the mobility mindsets of customers. The auto industry’s profit pools are being redistributed to
Growing impact: Auto OEMs react new types of players that have distinct strengths that are
An automobile is still an aspirational purchase in India, and usually far removed from the core automotive OEM
demand for car ownership is expected to remain robust. capability of engineering. The greatest profit shifts are
However, these shifts in the overall mobility market are towards manufacturers of components and software
changes that OEMs cannot ignore in the long term. solutions, as well as newer mobility service providers. It
may not be feasible for OEMs to develop these capabilities
entirely in-house. They must, therefore, forge
unconventional partnerships and make selective
investments in key parts of the value chain.

The business models for these new areas are still evolving
in India. It is critical for automotive OEMs to be selective
about the opportunities where they invest, create an
internal culture of experimentation and focus on developing
a credible business model in the medium to long term.

Follow the customers: Radically change the investment mix
to move online with them

Automotive OEMs in India currently allocate 10% to 11% of
their total marketing budgets on digital media, compared
with about 35% in the US, 55% in China and 25% in Mexico.
Internet penetration in India is projected to increase from
26% in 2015 to 42% by 2020. Consumers are already shifting
multiple parts of the purchase journey online. Automotive
OEMs need to take decisive action to increase the allocation

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

Digitisation

of marketing investments to digital channels. Bain estimates • Location-based and emergency services: navigation and
indicate that companies should increase the proportion of traffic alerts, fleet operations, breakdown support,
their budget for digital marketing to about 25% to 30% of security service and facility searching (petrol pumps
their total marketing spending by 2020. This will result in a and restaurants)
digital marketing opportunity of $250 million to $300
million by 2020. • Usage-based services: customised insurance
Build the dealership of the future: Differentiate the retail programmes based on mileage and vehicle health,
format driving style support and fuel optimisation tips
OEMs must think about how to differentiate the offline brand
experience. Globally, OEMs are already running experiments • Infotainment services: in-car delivery of music and
with “exciting” retail formats such as creative stores in high- television shows, downloadable applications,
street locations run by product experts with interactive smartphone integration, voice and communication
virtual-physical layouts. The idea is to convert a dealership services and social media integration
from a simple outlet to a brand experience centre. Many
design options are possible: a combination of innovative India’s auto OEMs have traditionally been conservative
store layouts, point-of-sale digital tools (handheld devices, in terms of providing access to their core technologies
tablets and VR/AR devices) and product touch-and-feel beyond Tier-I suppliers and in encouraging partnerships
options such as colours, leather and metals. beyond vendor relationships. A move towards providing
Change the game: Use product digitisation to enable deeper more access to their platforms will allow them to better
ongoing customer relationships develop software and systems to connect to their
Connected automobiles are a powerful way to remain customers.
connected with customers post-purchase. It is increasingly Invest in the backbone: Build data and analytics capabilities
possible for companies and consumers to communicate in The power of analytics that use internal data from various
real time, taking customer engagement to a higher level. sales and marketing touchpoints, along with external data
Four broad categories of connected vehicle services that available through social media and search, is well
are most relevant in the Indian context: understood. While it is critical to develop the business
• Smart service and maintenance: predictive and dynamic case and applications for analytics solutions, the true
complexity is in the data layer. With the growing amount of
maintenance of vehicles, automated service reminders, data from disparate sources, it is critical to invest in a
vehicle health monitoring and pre-ordering parts online well-designed data and meta-data layer with clearly defined
objectives of the system, along with the right technology
solution.

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

Attention: Members

Honourable High Court of Hyderabad and Madras High Courts have given their Judgements stating that Life
Tax on Vehicle’s can only be collected on the basis of Invoice Price and not Ex-Showroom Price. The text of
Telangana High Court is reproduced for the benefit and information of automobile dealers. In case, Madras
High Court Order copy is required, the same is available with F A D A.

Hon’ble Sri Justice M S Ramachandra Rao
High Court of Hyderabad

WRIT PETITION No. 5286 of 2018
ORDER

1. Petitioner has filed this Writ Petition aggrieved by the 4. Petitioner contends that the action of Respondents in
action of Respondent in collecting a sum of Rs. 51,000 insisting that the Petitioner to pay life tax on ex-
allegedly in excess towards life tax for registering the showroom price and not on the net invoice price as
vehicle Volvo XC 60 D5 Inscription model purchased by indicated in Circular Memo No.13/4515/R1/2008 dt.30-
the Petitioner on 06-01-2018 from a dealer - Talwar Cars 08-2008 issued by the 2nd Respondent is illegal and
Pvt Ltd, Hyderabad. arbitrary and violates Articles 14 and 300-A of the
Constitution of India, and that the Petitioner is entitled
2. It is the contention of the learned counsel for Petitioner to seek refund of the same.
that as per the Circular Memo No.13/4515/R1/2008 dt.30-
08-2008 issued by the 2nd Respondent, life tax is to be 5. Counter-affidavit is filed by 3rd Respondent opposing the
collected from a vehicle produced for registration upon claim of the Writ Petitioner.
the sale based on the net invoice price of the vehicle; 6. In the counter-affidavit, the 3rd Respondent stated that
that in the present case, the sale invoice issued to the the Petitioner purchased the vehicle in question on 06-
Petitioner by the Dealer indicated an amount of only Rs.
52,90,000 as the net invoice price; but the Respondents 01-2008 for Rs. 52,90,000; whereas the ex-showroom
price list enclosed with the application shows that the
have levied life tax on ex-showroom price i.e. Rs. 55,90,000, ex-showroom cost is Rs. 55,90,000; that there is a
though the Dealer had given a discount of Rs. 3,00,000;
that the Petitioner was forced to pay the sum of Rs. 51,000 discount offered to the Petitioner, which was not
mentioned in the invoice; and so it was presumed that
in excess of the life tax on the basis of the said ex-showroom tax was not paid on the full ex-showroom price. It is
price and the said payment was made under protest.
alleged that the Petitioner paid lesser amount of tax on
3. Learned counsel for Petitioner contends that the demand the discounted invoice price and he ought to have paid
of excess amount of Rs. 51,000 paid by Petitioner was life tax on the ex-showroom price. It is contended that
under coercion/economic duress since the Petitioner had since there is a difference between the price mentioned
to get the vehicle registered within 15 days of reserving in the invoice with the price mentioned in the price list
the number for otherwise the reserved number would be of the said vehicle enclosed by the applicant, it was
cancelled under Rule 81(6) of the A P Motor Vehicle Rules, determined that there was under-pricing of the sale of
1989; and the Petitioner is entitled to refund of the said the vehicle. It is also contended that Memo No.10937/A/
amount thus illegally collected from him. 2002 dt.02-09-2003 of the 2nd Respondent was issued

fada.in | May 2018 F A D A Journal 19

Attention: Members

instructing registering authorities to check that there 15. In Regional Provident Fund Commissioner Vs Shiv
was no loss of revenue for the registering authorities; Kumar Joshi , a case under the Consumer Protection
that a local audit report of the receipts and expenditure Act, 1986, the term “consideration” was described as
accounts of the Joint Transport Commissioner, Central ‘meaning a reasonable equivalent or valuable other
Zone, Hyderabad for 2014-15 recorded non-inclusion benefit passed by the promisor to the promisee or
of discounts in calculation of VAT and Life Tax and transferor to the transferee.’ The Bench observed:
observed that dealers had allowed discounts on the “10. ….The word “consideration” has not been defined
vehicles sold by them and on the discounted cost, life either under the Scheme or the Act. Black’s Law Dictionary
tax and VAT were being levied and this has resulted in defines “consideration” thus: “Consideration is not to be
short levy of VAT. confounded with motive, consideration means something
7. On what basis, the levy of life tax is being made on ex- which is of value in the eye of the law, moving from the
showroom price and not on the invoice price in spite of plaintiff, either of benefit to the plaintiff or of detriment
Circular Memo No. 13/4515/R1/2008 dt. 30-08-2008 to the defendant.”
issued by the 2nd Respondent, is not mentioned in the In Vol. 17 of Corpus Juris Secundum (pp. 420-21 and
counter-affidavit. 425) the import of “consideration” has been described
8. The learned Special Government Pleader for thus. Various definitions of consideration are to be found
Respondents reiterated the stand taken in the counter- in the textbooks and judicial opinions. A sufficient one,
affidavit. as stated in Corpus Juris and which has been quoted and
9. I have noted the contentions of both sides. cited with approval is, “a benefit to the party promising,
10. The life tax on vehicles is levied under the A P Motor or a loss or detriment to the party to whom the promise is
Vehicles Taxation Act, 1963 (for short “the Act”). Section made …”. At common law every contract not under seal
3 of the Act states that the State Government, by a requires a consideration to support it, that is, as shown in
notification, directs that a tax to be levied on every the definition above, some benefit to the promisor, or
motor vehicle used or kept for use, in a public place in some loss or detriment to the promisee. There is a sufficient
the State. The Sixth Schedule to the Act provides for consideration for a promise if there is any benefit to the
rates of taxation of new vehicles (either three or four promisor or any detriment to the promisee. It may be laid
wheeler) including motor cars and jeeps coming under down as a general rule, in accordance with the definition
non-transport category. The said Schedule mentioned given above, that there is a sufficient consideration for a
that the life tax is to be calculated on the ‘cost of the promise if there is any benefit to the promisor or any loss
vehicle’. or detriment to the promisee. The gist of the term
11. This is not disputed by the learned Special Government “consideration” and its legal significance has been clearly
Pleader. summed up in Section 2(d) of the Contract Act which
12. I am unable to subscribe to the said contention for the defines “consideration” thus:
reason that life tax can be levied only on the ‘cost of the “When, at the desire of the promisor, the promisee or any
vehicle’ under Sixth Schedule to the Act. The term “cost” other person has done or abstained from doing or does
is defined in Concise Oxford English Dictionary Twelfth or abstains from doing, or promise to do or to abstain
Edition as “require the payment of specified sum in from doing, something, such act or abstinence or promise
order to be bought or obtained”. It is thus the value of is called a consideration for the promise;”
the consideration for transfer of the vehicle. Webster’s Third New International Dictionary
13. As per common understanding also ‘cost of the vehicle’ (Unabridged) defines “consideration” as:
is the amount actually paid by the purchaser to the “Something that is legally regarded as the equivalent or
Dealer, and is the consideration for transfer of vehicle return given or suffered by one for the act or promise of
from the Dealer to the purchaser. another.”
14. In Kumari Sonia Bhatia Vs State of UP and others, the 11. In Sonia Bhatia Vs State of UP it was held: (SCC p.
term “consideration” was explained as “a reasonable 595, Para 20)
equivalent or other valuable benefit passed on by the “20. From a conspectus, therefore, of the definitions
promisor to the promisee or by the transferor to the contained in the dictionaries and the books regarding
transferee”. a gift of an adequate consideration, the inescapable

20 F A D A Journal May 2018 | fada.in

Attention: Members

conclusion that follows is that ‘consideration’ means a thereto, may be deferred till the happening of a
reasonable equivalent or other valuable benefit passed contemplated event, so much so that the benefit thereof
on by the promisor to the promisee or by the transferor is extended at a point of time subsequent to that of
to the transferee.” the original sale/purchase. That by itself, subject to
16. No decision of any Court has been cited by the learned proof of such regular trade practice and the contract/
Special Government Pleader in support of this stand agreement entered into between the parties, would not
that the term “cost” of vehicle in the Sixth Schedule render the trade discount otherwise legal and
to the Act means the published ex-showroom price acceptable, either non est or fictitious for evading tax
and not the actual sale invoice price or the cost paid liability.”
by the purchaser to a Dealer. 21. So the State cannot be allowed to levy life tax on the
17. Since the language of the Taxing statute, as per the ex-showroom price shown in the price list, which is
settled principles of Interpretation of Statutes, has not in fact the actual “cost of the vehicle”.
to be interpreted strictly (CCE v. Daoba Steel Rolling 22. There is also no material placed on record by
Mills), the liberal interpretation of the term “cost of Respondents to show that the Petitioner paid the ex-
vehicle” to mean the ex-showroom price published showroom cost of Rs. 55,90,000 and not the invoice
by the manufacturer or dealer, cannot be accepted. price of Rs. 52,90,000. Therefore, the cost of the
18. The contention of the Special Government Pleader is vehicle for calculation of levy of life tax under the
that the very sale by giving discounts by a dealer is Sixth Schedule of the Act can only be on Rs. 52,90,000
unethical and immoral and is a fraud on the State and not on Rs. 55,90,000. The Circular Memo No.13/
exchequer; and the State cannot be deprived of any 4515/R1/2008 d t.30-08-2008 is binding on
amount payable to it as life tax merely because the Respondents and they cannot be allowed to deviate
Dealer had sold the vehicle in question to a party at from the same and levy life tax on the ex-showroom
lesser price than one shown in the ex-showroom price price instead of net invoice price as mentioned
list by giving a discount. According to him, this therein.
amounts to under-invoicing and is not to be 23. The Special Government Pleader relied on a Memo
permitted. No.59/TS/IT/2016 dt.18-02-2016 issued by the 2nd
19. I am unable to agree with this contention. There is Respondent in the case of another dealer, who sold
no law prohibiting the Dealers from giving discounts on discount and in that case a view was expressed
and practice of Dealers in giving discounts cannot that on discounted price life tax cannot be collected.
be said to be unethical or immoral or a fraud on the The said Memo does not represent the correct legal
State. The Court cannot close its mind to such position and cannot be the basis for the demand of
business practices which are permitted and which Rs. 51,000 from the Petitioner in excess of the actual
are not prohibited by law and can take judicial notice life tax payable as per Sixth Schedule under the Act.
that giving of discounts by Dealers is very much 24. The audit report dt.30-06-2014 relied upon by
prevalent and is a valid trade practice. Respondents is also not in accordance with the legal
20. In Southern Motors Vs State of Karnataka, the Supreme position as stated above. So it is also liable to be
court explained the importance of trade practice of rejected.
discount sales, in the context of the Karantaka Value 25. Accordingly, the Writ Petition is allowed and
Added Tax Rules ,2005 in the following terms: Respondents are directed to refund a sum of Rs.
“28. It is a matter of common experience that in the 51,000 collected from the Petitioner towards life tax
present contemporary competitive market, trade in excess of the life tax payable by the Petitioner
discounts not only are dependent on variable factors under the Sixth Schedule to the Act on the invoice
but also might be strategically not disclosable at the sale price, to the Petitioner within four (04) weeks
time of the original sale/purchase so as to be coevally from today. No costs.
reflected in the tax invoice or the bill of sale, as the 26. As a sequel, miscellaneous applications pending if
case may be. The actual quantification of the trade any, in this Writ Petition, shall stand closed.
discount, depending on the nature of the trade and
the related stipulations in any contract with regard JUSTICE M S RAMACHANDRA RAO
Date: 02.05.2018

fada.in | May 2018 F A D A Journal 21



Competition Law Updates

Delhi High Court passes order in favour of Maruti The automaker, however plans to continue the current
three-way alliance with Renault and Mitsubishi Motors
A complaint was filed in January, 2011 against Honda, under which Renault owns a 43.4% stake in Nissan,
Volkswagen and FIAT which in turn holds 15% of Renault and 34% of
before the Competition Mitsubishi. Since the entire point of the alliance is to
Commission of India (CCI) keep its members independent and maximize the
alleging that the car growth of each, Nissan’s CEO Hiroto Saikawa claimed
manufacturers were that he sees no merit in combining both companies as it
engaged in anti- would have certain undesired effects.
competitive/abusive Supreme Court stays Competition Appellate
practices in the spare Tribunal’s (COMPAT) order that imposed penalty on 3
parts market. car companies
The COMPAT by its order dated 09.12.2016 concurred
The CCI extended its with the findings of the CCI and directed Ford, Toyota
investigation to other car and Nissan, to remove all restrictions imposed through
manufacturers, including agreements on auto parts suppliers so as to open up
Maruti and on August 25, market for spare parts and remove all restrictions on
G R Bhatia, Partner & Head, 2014, it found 14 car supply by original equipment suppliers to authorized
Competition Law Practice Group, manufacturers (Maruti, dealers.
Nissan, Honda Cars India, On appeal, the Hon’ble Supreme Court has stayed the
Luthra & Luthra Law Office operation of the COMPAT’s order and the matter, last
listed on 19th April 2018, will now be taken up on 18th
Volkswagen India, Fiat India Automobiles, BMW India, July 2018.
Ford India, General Motors India, Hindustan Motors, The European Commission (EC) conducts deeper
Mahindra and Mahindra, Mercedes-Benz India, Skoda investigation into German carmakers’ collusion
Auto India and Toyota Kirloskar Motor) in India to be The EC has decided to conduct a further in-depth
violating trade norms in the spare parts and after- investigation into the collusive activities of automakers,
services market, and imposed a total penalty of Rs. 2545 which have potentially violated antitrust rules. These
crores on them. activities include discussion on costs, suppliers and
pollution control technology to be used by all carmakers.
While most of the car makers challenged the The ongoing investigation into this collusion has
constitutionality of the CCI decision as well as the revealed that there were attempts by automakers in as
provisions of the Competition Act, 2002, before the Delhi early as 2006 to agree on what size to make car tanks
High Court, Maruti in its plea before the Single Judge containing Adblue, a mixture of urea and water invented
claimed that the CCI had expanded the scope of its by Mercedes that cleans diesel exhaust by eliminating
investigation to include the entire car industry, even pollutants.
though it had originally received a complaint only against Following this investigation, the next step would be to
three automobile firms - Honda, Volkswagen and FIAT. send formal complaints, a type of indictment, to the
companies, which signals that they have finished
The Delhi High Court, on May 09, 2018, decided in collecting evidence and are ready to hand out penalties.
favour of Maruti and directed the CCI, in its interim The carmakers would still have the right to defend
order to not to take any coercive action in connection themselves, but many companies are already preparing
with the levy of penalty of Rs. 471 crores on Maruti, for by hiring cartel specialists to bolster their legal
the alleged abuse of its dominant position in the spare departments
parts market.

Nissan dismisses plans to merge with Renault, seeing
no merit in the same

Japanese automaker, Nissan Motor Co. Ld. has called
off its plans to merge with its French partner, Renault
SA, seeing no merit in combining both companies.

fada.in | May 2018 F A D A Journal 23



Automotive & Mobility BCG
The Boston Consulting Group
Why Carmakers Are Racing
to Go Digital

Automobile manufacturers are hitting a wall of complexity fast-growing startups and competitors from the tech industry
that’s shifting efforts to modernize engineering departments with deep experience in software development.
into overdrive, pushing them to adopt digital technologies to Digitizing engineering processes involves tools that directly
streamline work, improve collaboration, and contain costs. affect the car, such as virtualization, data from connected
New cars are essentially rolling computers, with up to 100 cars, and artificial intelligence (AI). Others tools, such as
processors controlling systems large and small. It’s not cloud-based collaboration platforms, improve how
uncommon for research and development for a new model to engineering personnel communicate and collaborate.
take about five years and cost up to $1 billion. In the past Automakers that have embraced these technologies have
decade, software-powered systems have grown to account realized multiple benefits, including cuts to upfront
for up to half of those costs. To function, features such as engineering and materials costs and to the time needed to
Automatic Braking and Advanced Driver Asistance Services bring a new model to market. The benefits continue after a
(ADAS) have to interact with multiple other systems, car is sold by minimizing the number of vehicles returned to
necessitating changes to all of them. Just adding ADAS to a dealers with warranty issues.
new car model increases the complexity index by 22%,
according to 2016 research by IPG Automotive and the Munich OPTIONS FOR DIGITIZING ENGINEERING
University of Applied Sciences.
While cars’ electronics and digital-based functions have Digital technologies can improve all stages of engineering,
multiplied, however, engineering departments have been slow from predevelopment, when a new model’s features and
to use digital tools to build them, a sign of how entrenched functions are determined, through design, testing, production,
practices can become in a mature industry. But maintaining and diagnostics that engineers can use after the fact to
the status quo is no longer an option. Engineering must adopt continue fine-tuning their work. (See Exhibit 1.)
digital processes and tools now to keep up with developments Virtualization. Automakers have used computer-generated
such as autonomous-vehicle technology. And they must act simulations for close to 40 years to design, test, and build
new-model prototypes and components. But these
sooner rather than later to simulations and the data they yield have not been consistently
address competition from reliable, and the data has not been shared across engineering

Cars’ electronics and
digital-based
functions have
multiplied, but
engineering

departments have
been slow to use
digital tools to build

them.

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

Automotive & Mobility

IT systems. As a result, engineers still use many manual develop tools to assess data quality. By ensuring the accuracy
methods. In product testing, for instance, it’s not uncommon of data, they can create a self-perpetuating circle of trust: the
for companies to build up to 500 prototypes—many by more they trust simulation results, the more likely they are to
hand—to prepare a new model for mass production. use simulations in their work, and the more frequently
simulations are used, the better the resulting data will be.
Recent breakthroughs in
processing power and In addition, engineers may continue asking for physical
algorithms, however, have prototypes because they are not aware that a digital
led to virtualization simulation could fit their needs. Centralizing requests for
Virtualization technologies that make both physical and digital prototypes could allow for
technologies make it simulations cheaper and proactively proposing a digital alternative to a physical
more reliable. Virtual prototype on the basis of criteria such as simulation
easier to detect design reality, augmented reality, predictability.

mistakes early on, 3D printing, and “digital Data from Connected Cars. Automakers once determined
which reduces late- twins”—models that things such as the size of the engine to include in a new
mimic real-world model or where to position the steering wheel on the basis of
products and processes— past experience, technical guesses, and qualitative customer
stage errors. are valuable tools for feedback. Today, OEMs can base such decisions on
quantitative data from connected cars, which tells them how
engineers. These people actually drive, including which features they use and
technologies make it how they use them.
easier to detect design
mistakes early on, which reduces late-stage errors that can
stall the advance of a new model through design and testing. Today’s car components, from the powertrain to side-view
mirrors, generate signals and diagnostic information that
Virtual technologies can be applied to multiple product- and an automaker’s data scientists can analyze to rightsize
process-testing situations. In product design, for example, features and functions so that they deliver only what
they can be used to test acoustics, hydrodynamics, and customers want and use. That limits the time and money
electronic systems, and in crash tests. 3D-printed parts are carmakers spend on underused systems or functions, thereby
less expensive to produce, so using them to create prototypes improving a vehicle’s quality-to-cost ratio.
of subsystems can lower overall prototyping costs. In advance
of a new model’s “body in white” manufacturing phase, when One auto OEM that switched
sheet metal components are bound together, simulations can from designing power
be used to test the feasibility of making welds in hard-to- steering torque based on
reach places. Virtualization can also simulate other stages past experience and guesses
of assembly-line work to prevent problems before they hit to using connected-cars Data from connected
the factory floor. One example is using virtual reality to map
out the best way for assembly-line robots to mount a driver’s data expects to save 5% to cars lets automakers
seat onto a car body. 10% in power steering
materials costs. The same deliver only the

automaker also used features that
Engineers styling a new model’s interior or exterior can use a connected-cars data to
version of virtual reality called Cave Automatic Virtual identify close to a dozen customers want and
Environment (CAVE) to produce a 360-degree view of a
physical environment. The virtual mockup lets engineers spot additional use cases that use.
and flag design imperfections and then use the information cumulatively could save up
to build 3D-printed models for further inspection. to $50 per vehicle, a
substantial amount
considering the millions of
Although virtualization technologies make simulations more cars the company produces a year.
accurate, the age-old problem of “garbage in, garbage out”
still applies. If the underlying data is not accurate, even the Collaboration Platforms. Enterprise social networks and other
best virtual models won’t produce good results, and they types of collaboration platforms can reduce the volume of
could falsely predict how components will behave in real- information stuck in email inboxes and spreadsheets, and
world conditions. To ensure accuracy, engineers must follow replace meetings and memos as a more timely way to share
structured and rigorous data-gathering processes, and updates. Dismantling barriers to effective communication is

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

Automotive & Mobility

important when car companies have thousands of people in Engineers at one automaker used a real-time parts design
engineering departments around the world working on the platform during the design of a new low-cost model. The
same new model. platform let them monitor daily the more than 3,000 parts in
Teams can create channels on enterprise social networks to the prototype to keep close watch on factors such as weight
quickly broadcast problems to a large group, which can lead and cost. Doing so helped the team prioritize features and
to better brainstorming and reduce the time it takes to find a design elements and optimize features-to-cost ratios. When
solution. At one automaker, an engineering team struggled to the car debuted, the features it included at its relatively low
optimize the sound in a new model’s interior, a process called price point made it so popular that the automaker had trouble
spatialization. Eliminating unwanted echoes and other bad keeping up with demand.
acoustics requires input from teams designing the car’s door, Collaboration platforms can also ensure that information
interior, and in-vehicle infotainment system, as well as from remains up to date and consistent across the multiple
the vendors supplying the sound and amplifier systems. A applications used to build mockups of systems and
temporary channel called #Spatialsoundissue was created subsystems. For example, if requirements shift for a high-
on the company’s enterprise social media platform to enable level system, such as the car body, sharing the update
the teams involved to brainstorm and share progress on through the collaboration platform can alert team members
efforts to resolve the issue. Widespread collaboration on working on subsystems to the change. Collaboration
the channel helped the participants find a solution in two platforms also can facilitate interactions between
weeks, far faster than it would have taken if they had relied carmakers and third-party suppliers. Product life cycle
on meetings and other traditional problem-solving methods. management (PLM) software and data-quality verification
Collaboration tools can speed up product development by tools can serve as effective collaboration platforms for
offering a faster way to share progress reports. Historically, making sure that data remains consistent from one phase
creating progress reports on new models involved manually of work to another.
entering data, copying information from multiple systems, Artificial Intelligence. AI has existed in various forms for
and then consolidating and reconciling the information. The decades, but as a result of new algorithms, cheaper
process was so cumbersome it happened only twice a year. processor power, and vast engineering data, modern AI
As a result, if work deviated from set targets between can bring significant improvements to multiple
milestones, the news might not be communicated until months engineering processes. AI’s chief impact comes from
after the fact, which could delay implementing corrective training and deploying algorithms that “learn” from
measures and postpone production. By contrast, experience and then use the information to predict
collaboration platforms and tools that streamline data actions. AI-based natural language processing can be
collection let teams share data in real time, allowing them to used to find information buried in engineering
correct course immediately and steer projects more development project databases faster than other search
effectively. methods. (See Exhibit 2.)

Collaboration tools
can speed up product

development by
offering a faster way

to share progress
reports.

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

Automotive & Mobility

AI holds particular promise for improving automotive Identify pain points. Choose candidates for pilot projects
design. In the typical design process, OEMs define by determining which problems in the vehicle
requirements for parts, components, and systems that tier- development process are most pressing. Select a relevant
one suppliers create and perfect through multiple rounds use case as a jumping-off point on the basis of how much
of design work. OEMs also assemble and validate parts to it could improve a process and how quickly the new
make sure they work as intended. The process remains technology could be implemented. Other considerations
largely manual, involving substantial time and engineering are how ready the project team is to spend time on the
personnel. Engineers can use AI-based algorithms to create pilot and the immediate value the project can create.
design options from specifications and existing designs, Typically, projects are selected because they’re in a
freeing personnel to concentrate on other tasks. AI can development phase relevant to the digital initiative—for
also shorten design time and improve the attractiveness example, launching a collaborative parts design
and quality of new models. A significant barrier to database to handle initializing milestones for engineering
incorporating AI into design work, however, is ensuring bills of materials (BOMs).
that the required data is error-free and accurately labeled Take a test-and-learn approach. If initial pilot projects
so functions such as machine learning can use it in the are successful, use the information from them to address
right context. other pain points on the same vehicle prototype or on
In the later phases of the engineering process, AI can reduce other new models in development. When enough evidence
the time needed to test components, systems, and entire of success is developed through initial use cases, use it
vehicles. For example, ADAS must go through several to launch a wider roll-out of the digital tools into regular
hundred million miles of simulations of real-life driving production.
conditions to make sure it’s reliable and meets regulatory Create a digital innovation center. It’s easier to scale up
standards before it can be added to a new model. Machine digital technologies if the effort is organized and
learning–based AI can create better driving simulations managed through a hub large enough to attract and
and analyze the results to identify irregularities that could allocate talent. A digital innovation center should include
signal a problem. In addition, many other types of tests, people familiar with new technologies and processes such
including tests of physical prototypes, continue to be done as agile coaches, software developers, user experience
manually. AI reduces manual testing by automating test designers, data scientists, and data analysts. Talent could
design, execution, and analysis. When it is used in testing, be collocated with engineering departments to spearhead
AI can cut prototype costs, the number of tests required, the transformation by implementing best practices.
and their duration. By improving testing, AI also reduces Digital innovation center personnel can also take what
the number of new cars with faulty parts. they learn from one project with them when they start a
For all its benefits, AI takes more effort to integrate into new one.
engineering than some more conventional analytics. Before Automotive manufacturers face multiple road blocks.
adopting it, automakers should assess the benefits of AI Research and development, testing, and other
against the effort required to use it so they can identify engineering practices are becoming more complicated at
situations where it could significantly improve results. the same time as tech-savvy competitors are entering
GETTING STARTED WITH DIGITAL TECHNOLOGIES the field, regulation is increasing, and autonomous-vehicle
On the basis of our experience working with car companies technology is moving from drawing boards to highways.
on the digital transformation journey, we recommend One of the most promising options for dealing with these
starting with a limited set of pilot projects on models in changes is digitizing engineering methods, using
development. This allows management to ensure everyone everything from virtualization to AI. But OEMs cannot
is working toward the same goal in the same way and simply hit the gas on such efforts for fear of being left
sufficient budget is allocated to the project, thus reducing behind. They can increase their success rate by identifying
change management risks. Once the digital technologies where new technologies would have the most impact on
tested in pilots are shown to be successful, they can be cost and productivity. Legacy automakers’ years of
deployed in other new-vehicle development projects and experience give them an advantage over younger rivals.
can even be retrofitted for use in ongoing vehicle By integrating digitization into already hard-earned
production. To launch a pilot, we suggest taking the mechanical and manufacturing process know-how, they
following steps. could ultimately lap the competition

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



The Zero Hour

Rishabh Sanghi, 31 is a Management Graduate by qualification and is the Director at Alwar based J S
Fourwheel Motors Pvt Ltd having 2S dealerships of Mahindra PV, CV and Hero MotoCorp. As they say, the
earlier you get in, the better your chance to survive and lead from the front! Trained under the able
leadership of his father Mr. Nikunj Sanghi, a name which needs no introduction in Indian Automobile
Industry, Rishabh got into the nitty-gritty of auto dealership business at quite an early age. When asked
what he would be if not an Auto Dealer, with sparks in his eyes, swift came the reply “a Formula 1
Driver” which means that his hobby and career were both destined to be in and around Automobiles!
In a series first, Saharsh Damani, Editor – F A D A Journal interviewed Rishabh Sanghi and this is what
he had to say:

Not many people in this generation are looking forward to Disruptions like EVs, autonomous vehicles and shared
joining Auto Retail business. What made you take the baton mobility is likely going to change the way the industry operates
of day-to-day business from your father, who has created a today. This should bring in a host of new opportunities.
brand for himself? Business models and the way business is done is going to
Automobiles have always been in the DNA of our family. It change for all stakeholders. The coming decade is going to
was but an obvious choice to join the family business. Having be very interesting for all of us.
worked in the corporate sector for a couple of years, I was How are you preparing JS4Wheel, both internally and
certain that I would want to do business. The idea of externally from these disruptions may it be PV, CV or 2W in
experiencing each day as a day with new challenges and which you operate?
opportunities has immensely appealed to me. Manpower has always been a key differentiator for us. We
are investing heavily in human capital. We are focusing not
Automobiles have always been in the DNA of our only on infusion of fresh talent but also upskilling existing
family. It was but an obvious choice to join the workforce both to match expectations of customers and also
family business. get ready for the nuances in the business. This will ensure us
a healthy job-ready pipeline at all times.
How do you foresee this industry when disruptions like What are the policy changes which you think will create a
electric and autonomous vehicles are knocking at our doors? positive impact for auto retail industry?
The Industry is at the cusp of a major transformation. Electric vehicle policy definitely tops the list. If given the

30 F A D A Journal May 2018 | fada.in

The Zero Hour

right impetus and incentives, EVs are going to be the next big retail, commits time, effort and money to this business.
thing in the auto industry. Another policy which might fillip Majority of the auto dealers are single brand dealers and
the auto industry in the next orbit would be the ‘end-of-life’ therefore a sudden exit by an OEM wipes out the total capital
policy for vehicles. that a dealer might have created over the years. Auto industry
According to you what are the key measures which needs to incl. F A D A & other industry bodies should have a written
be taken to further improve the relationship between OEM guideline duly endorsed by the government where in case of
& their first customer’s? an OEMs sudden exit, the dealer should be made good the
losses incurred because of business closure. There should
The auto retail industry is going be a mechanism where a neutral arbitrator assesses the loss
through a catch 22 situation. and accordingly a standard compensation formula be worked
Customers are required to be offered out. To add to that, there needs to be a clear ‘Exit’ policy
similar service levels across all auto spelled out by all OEMs irrespective of volume of business
retail outlets irrespective of so that reluctant dealers are able to gracefully exit the
geography and location. However, business. Due to a lack of a clear exit policy, dealers have to
given the diversity and complexity in continue doing business unwillingly which is not good for
our country, a lot of decisions with any stakeholder in the long run. The Indian auto industry can
regards to customer offering and refer to practices adopted by OEMs in more mature markets.
experience are very location specific.
The balance between set standard There should be a mechanism where a neutral arbitrator
operating procedures and flexibility assesses the loss and accordingly a standard compensation
available at a dealership is what formula be worked out. Thereneeds to be a clear ‘Exit’ policy
needs to be looked into. Genesis of spelled out by all OEMs irrespective of volume of business.
auto retail and distribution lies in the local flavour that a
dealer is able to bring to the table. The shift towards What is that one industry best practice which you would like
standardization is resulting in micro-management of to share with our members?
dealerships thereby quenching the entrepreneurial spirit of We celebrate 31st August as our Founder’s Day every year.
a dealer. The day is almost like a festival for all members of our
organization. We prepare for this day weeks in advance. Our
The balance between set standard operating procedures entire team along with their families is invited inside the
and flexibility available at a dealership is what needs to dealership premises to spend the day as a one big family.
be looked into. The shift towards standardization is They are treated to an in-house culture entertainment program
resulting in micro-management of dealerships thereby
quenching the entrepreneurial spirit of a dealer.

According to you what are the policy guidelines which should We celebrate 31st August as our Founder’s Day every
be created by industry stakeholders to reduce the negative year. The day is almost like a festival for all members of
impact when an OEM suddenly exits from the country and our organization. The best part of the day is having lunch
how can F A D A play a role in this scenario? with over 1500 people. We make sure that the day is
An auto dealership by its very nature is an extremely capital- completely dedicated to our team.
intensive business as one has to commit lot of funds to both organized and performed by our team. The program is
fixed assets and working capital. The gestation period of a followed by applauding efforts of outperformers of the year,
new dealership is ~3 to 5 years depending on the brand and recognizing people for their commitment, dedication and
the geography. In addition, dealerships work on high overhead loyalty towards the dealership and motivating students to
costs which are mostly fixed in nature. Sudden exit of an give their best in education by offering them scholarships.
OEM results in huge erosion of capital. Realization out of The best part of the day is having lunch with over 1500 people.
liquidation of available vehicle and spare parts inventory is We make sure that the day is completely dedicated to our
even lower than the acquisition price of the inventory. team. The idea is to make our families as much a part of the
Specialized tools & equipment’s are brand specific and dealership as all of us are. We share with them the annual
therefore realization out of them is almost negligible. An auto business report along with broad strategies for the year
dealer despite knowing that the exit barriers are huge in auto ahead

fada.in | May 2018 F A D A Journal 31

Consumer Case Study

National Consumer Disputes Redressal Commission, New Delhi

Rekha Gupta, Presiding Member

Gurbinder Singh Cheema - Petitioner

Versus

New India Assurance Co. Ltd & Anr - Respondents

Revision Petition No. 2712 of 2017 Decided on: 14.12.2017

(Against the Order dated 04.11.2016 in Appeal No. 356/20016 of the State Commission Punjab)

Consumer Protection Act, 1986 – Sections 15, 17, 19 and 21 – Motors Vehicles Act, 1988 – Sections 50 and 157 – Insurance –
Transfer of vehicle – Damage to vehicle in accident – Insurance policy did not stand transferred in name of Petitioner nor was
he covered under deemed cover clause – He has also not mentioned as to when he sold car – On the date of accident he had no
insurable interest in vehicle on two counts 1) he had no insurance policy in his name to claim compensation for damage to car
on that date and secondly, on the date of filling of complaint, he was not the owner of the car as he had already sold the car
– These facts have been concealed in his complaint – No jurisdictional error or material irregularity in impugned order which
may call for interference – Revision Petition dismissed.

Important Point

Transfer of vehicle may take away insurable interest in vehicle.

Order

1. Rekha Gupta, Presiding Member - The present Revision the said Motor Garage. On the same day, he lodged the
Petition has been filed against the judgment dated complaint in the Police Station City, Sangrur, vide DDR
04.11.2016 of the Punjab State Consumer Disputes No.43 dated 06.05.2015 at 5.45 P.M. On 07.05.2015, he
Redressal Commission, Chandigarh ('the State gave written intimation regarding the accidental damage
Commission') in First Appeal no. 356 of 2016. to the Respondents and also furnished the documents,
consisting of the Registration Certificate, Insurance
2. The facts of the case as per the Petitioner/ Complainant Policy and copy of the DDR. He had purchased the said
are that he was the owner of the car, Maruti Swift, bearing vehicle in the month of December, 2014 and the Insurance
Registration No.PB-11-BB-0885; which was fully insured Policy was still in the name of the previous owner. On
with the Respondents/Opposite Parties, vide Policy/ 06.05.2015, he had sent a registered letter to the
Cover Note No. LDH/2014/979331, and the same was valid Respondents for transfer of the Insurance Policy and
from 03.06.2014 to 02.06.2015. On 06.05.2015 at about that letter was duly received by them and it was replied,
5.00 P.M., while he was coming towards his house from vide letter dated 11.05.2015. Rajesh Aggarwal and
Patiala side on the main Sangrur-Patiala Road, suddenly Jaswant Sharma, Surveyor of the Respondents, inspected
one bull came in front of the vehicle and to save the bull, the damaged vehicle in the workshop and the repair work
he turned the vehicle on its right side; as a result of thereof was started by the mechanics, only after the
which one blue coloured Matador, being driven in a rash surveyor inspected the vehicle and collected the
and negligent manner, came from the backside and documents. Bills to the tune of Rs.1,26,915/- for the
damaged the right side of the vehicle. In order to avoid a repairs of the vehicle were issued by the said Motor
major accident, he turned the vehicle to extreme left side Garage and those bills were duly supplied to the
and it struck a tree. In this accident, both the bumpers, Respondents. The Petitioner had been approaching
right side of the vehicle, radiator, air conditioner, rear Respondents since June 2015 for the payment of that
lights, bonnet etc. got completely damaged and the engine claim, but the same was never paid. Hence, the Petitioner
seized. He tried to drive the vehicle to the nearby had initially filed complaint No.690 of 2015 before the
mechanic; namely, Kissan Motor Garage, but it stopped District Forum; which was decided, vide order dated
in-between due to overheating, as the radiator was 03.08.2015, by which the Respondents were directed to
damaged in the accident itself and as a result thereof, decide the Petitioner's claim within 30 days. They
the engine of the car seized. Thereafter, it was towed to

32 F A D A Journal May 2018 | fada.in

Consumer Case Studies

intentionally did not comply with that order. These acts 06.05.2015 was never sent to them and the same had
on their part amount to negligence and deficiency in been antedated. They filed an application for directing
service. Hence, the Petitioner had filed a fresh complaint the Petitioner to produce the postal receipt of that date,
no. 690 of 2015 before the District Forum and prayed for but the same was not produced by him intentionally and,
the issuance of following directions:- as such, an adverse inference was to be drawn against
the Petitioner. After receiving the letter dated 11.05.2015
1) The respondent/ Opposite Parties - insurance from him, the reply was given and he was asked to submit
company may kindly be directed to pay the said the original Policy and "No Objection Letter" from the
accidental claim of Rs. 1,26,915 along with its previous owner and to deposit the transfer fee of Rs.57
interest from the month of June 2015 to the qua the transfer of the Insurance. The other documents
Complainant; were also called from him, vide letter, but he did not

2) To pay exemplary compensation to the tune of Rs. bother to reply the same. In the letter dated 07.06.2015,
he had alleged that the car was damaged by some
50,000 on account of mental agony, pain, loss and unknown vehicle, while it was parked outside his house
harassment at the hands of Opposite Parties; and
on the Sangrur-Patiala Road, Sangrur; whereas in the
3) To pay Rs.22,000 as litigation expenses. DDR, he had mentioned that the car was damaged, when

3. The complaint was contested by the Respondents, who it struck the tree, while he was coming to Phawara Chowk
filed a joint written reply before the District Forum; in
which they admitted that the vehicle, in question, was from Kairon Factory, Patiala Road, Sangrur and when
suddenly one bull had come in front of the car. In order
insured with respondent No.1 for the period, mentioned to save it he had turned the car to the right side, when
in the complaint. The letter dated 06.05.2015 sent by the
Petitioner was duly replied, vide letter dated 11.05.2015. another vehicle came from the backside and scratched
his car on the right side. As a result of this he lost the
They also admitted that letter dated 07.06.2015 was control of the vehicle and turned it on the left side to
received from the Petitioner by respondent No.2 regarding
the accident and that the said respondent appointed avoid a major accident and it dashed against the tree. In
these circumstances, the story put forward by him
Rajesh Aggarwal, as surveyor, for assessing the final regarding the cause of accident and the date of accident
loss to the damaged vehicle. They also admitted that no
amount was paid to the petitoner, as claimed by him. were not believable. He had given different versions
regarding the same accident at different places; which
They denied the other allegations made in the complaint is improbable and unjust. The transfer fee was deposited
and averred that the vehicle was owned by one - Sanjiv
Singla S/o Krishan Singla. As per the affidavit dated on the alleged date of the accident itself and application
for transfer of Policy was also made on the same day. All
01.11.2014 and delivery letter of R S Motors, it was the these facts show that the claim of the Petitioner was
said concern, which had purchased the car from Sanjiv
Singla and the Petitioner was not the owner thereof at doubtful and was rightly rejected. No doubt, insurer had
appointed Er Rajesh Aggarwal for assessing the final
the time of the alleged accident. The transfer fee for loss, but the same was assessed at Rs. 62,334 with a
getting the ownership was deposited on 06.05.2015.
There was no privity of contract between them and the salvage value of Rs. 1,000, vide his report dated
15.07.2015. They cannot be held liable to pay the
Petitioner, as there was no novation of the contract of Insurance claim and were justified in not settling the
the Insurance in his favour. According to GR No.17, in
case of Package Policies, the transfer of 'own damage' in same. The repudiation of the claim was duly conveyed to
the Complainant, vide registered letter dated 28.09.2015.
favour of the transferee can be made by the insurer, only Even at the time of filing of the complaint, he was not the
on the receipt of the request, along with the consent of
the transferor. Even if such a letter dated 06.05.2015 owner of the vehicle, as the same had been sold by him
to one Amandeep Singh on 02.07.2015. Hence, they
was sent to the Respondents by the Petitioner for the prayed for the dismissal of the complaint, with costs.
transfer of the Policy, the same could not have been
transferred without the consent of the transferor and 4. The District Consumer Disputes Redressal Forum,
without submitting the original Policy, along with transfer Sangrur ('the District Forum') vide its order dated 10th
fees etc. Therefore, he had no insurable interest on the March 2016 while allowing the complaint gave the
date, when the vehicle was damaged. Even at the time of following order:

filing of the first complaint, he was not the owner of the "Accordingly, in view of our above discussion, we allow
car and, as such, was not their consumer. Letter dated
the complaint and direct the OPs to pay to the

fada.in | May 2018 F A D A Journal 33

Consumer Case Studies believed that the forms were submitted by the
Complainant before the deposit of the fee itself. He
Complainant an amount of Rs.62,334 along with interest did not care to summon that form from the Registering
@ 9% per annum from the date of filing of the present Authority, in order to prove the fact that he moved the
complaint, i.e., 08.09.2015 till realisation. We further application for transfer of vehicle on 04.05.2015.
order the OPs to pay to the Complainant an amount of 9. The date, the time and the manner of accident were
Rs.5,000 in lieu of consolidated amount of compensation mentioned by the Complainant in his complaint and
and further an amount of Rs.5,500 on account of about the same effect, is the deposition made by him in
litigation expenses. The order be complied within thirty his affidavit, Ex.C-21. The same manner of accident was
days of its communication". detailed by him in the DDR; which was got recorded by
5. Aggrieved by the order of the District Forum, the him on 06.05.2015 itself and which was proved on the
Respondents/ OPs filed an appeal before the State record as Ex.C-6. However, the time of accident was not
Commission. The State Commission vide its order dated given therein. A perusal of that DDR shows that the
04.11.2016 while allowing the appeal and setting aside Complainant himself had gone to Police Station City,
the order of the District Forum ordered as under: Sangrur for lodging the report. He also proved on record
"8. The Insurance Cover Note was proved on the record one letter dated 06.05.2015, Ex.C-5; which was
addressed by him to the Officer In-charge of that Police
by the Complainant himself, as Ex.C-4. It is very much Station. In the report, he did not mention the time of
clear from that document that it was one Sanjiv Singla, accident, but gave that time of accident in that
who, as the owner of the vehicle, in dispute, got the application. Had he given that application in that Police
same insured with the Opposite Parties from Station, the DDR was required to be recorded on the
03.06.2014 to 02.06.2015. The reference to this very basis of that application itself and not on the basis of
Cover Note has been made by the Complainant in the statement, which he himself made in the Police
Para No.2 of the complaint. However, he tried to Station. He himself proved on record one letter dated
conceal the fact that the vehicle was insured in the 07.05.015, Ex.C-7, which was sent by him to the
name of Sanjiv Singla. That fact was pleaded by the Opposite Parties. In that application, he gave totally
Opposite Parties in their written reply. In support of contradictory version about the accident. In that
that fact, they proved on record the Insurance application, he mentioned that on 06.05.2015, his car
Certificate Ex.OP-1; in which the name of the insured was damaged by some unknown vehicle, while it was
is mentioned as "Sanjiv Singla". It was after the filing lying parked outside his house on Sangrur-Patiala Road
of the written reply that the Complainant tendered in and regarding that, DDR dated 06.05.2015 had been
evidence his affidavit, Ex.C-21. In that affidavit, he registered in Police Station City, Sangrur. It cannot be
only deposed about the allegations made in the believed that it was on account of some ill advice given
complaint. He did not depose that he purchased this to him that he changed the actual version. The only
car from that Sanjiv Singla and when. However, he conclusion, which can be drawn from these two totally
proved on record one letter, Ex.C-1; which was written contradictory versions, is that the accident never took
by him to D.T.O., Sangrur. Vide that letter, he sought place in the manner alleged by him and on the date, so
clarification regarding the ownership of this vehicle. It mentioned in the DDR. To me, it appears that it had
was reported by the D.T.O. that as per the records, the taken place, much before 06.05.2015 and the
vehicle was transferred in the name of the Complainant Complainant waited upto that date for getting the
on 06.05.2015. The question arises, whether this registration of the vehicle transferred in his name. All
transfer of registration was effected before or after this shows that the Complainant never came to the
the accident? As per the receipt, proved on the record District Forum with clean hands and that itself was the
by the Complainant as Ex.C-2, the fee for transfer was ground for dismissal of his complaint.
deposited by him on 06.05.2015 at 11:15:59. That 10. However, the Opposite Parties did not produce any
receipt contradicts the contents of the application, evidence, nor any such document was produced on
Ex.C-1; in which the Complainant had mentioned that the record on the basis of which it may be concluded,
the vehicle was transferred by the Registering Authority as to when the accident took place. The view put
on 06.05.2015 on his application for transfer dated forward by the counsel for the Complainant, on the
04.05.2015. As per the rules framed under the Motors basis of the judgments cited by him that the transfer
Vehicles Act, the application for transfer is required to
be made in the prescribed proforma and the same is
to be accompanied by the requisite fee. It cannot be

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



Consumer Case Studies

of the vehicle itself was to operate as the transfer of 6. Hence, the present revision petition.
the Insurance Policy, cannot be endorsed; as those 7. The revision petition has been filed with a delay of 154
judgments were given in "Third Party" case and not in
"Own Damage" case. The judgments, so relied upon days. I have gone through the application for
by the counsel for the Opposite Parties, pertained to condonation of delay. The reasons given in the
the "Own Damage" case. It was made very clear by application for condonation of delay are as under:
the Hon'ble Supreme Court in M/s Complete "After the disposal of the appeal on 04.11.2016, the
Insulations (P) Ltd.'s case (supra) that the requirements Petitioner received the certified copy of the judgment
of Chapter XI of the Motors Vehicles Act are in relation through post on 02.01.2017 which was dispatched by
to "Third Party Risks" only and hence the fiction of the State Commission, Punjab on 20.12.2016.
Section 157 of the New Act must be limited thereto. It Thereafter the Petitioner contacted the present counsel
was in view of the fiction contained in Section 157 and handed over the file on 11.03.2017. Due to Holi
that the counsel for the Complainant raised the above vacations, the present counsel went on vacation and
said argument. Therefore, the mere transfer of the after coming back, the counsel prepared the draft of
vehicle was not to operate as the transfer of the revision petition and got the annexures typed.
Insurance Policy. However, as per GR No.17 of the The present counsel gave the file to his clerk to file the
Indian Motor Tariff, the Complainant had 14 days' same before this Commission, however, due to some
time from the date of the transfer, for submitting unavoidable circumstances, the clerk left the office of
application to the Opposite Parties for the transfer of the Advocate and the present counsel remained under
the Insurance Policy. If the date of the accident is taken the impression that the Petition was filed.
as 06.05.2015, there was still 14 days for the In August 2017, when the Advocate for the Petitioner
Complainant to apply for the transfer of the Insurance checked the diary and could not find the date in the
Policy, but as already said above, the accident had present matter, then he traced the file and filed the same
already taken place before that date, when the vehicle before this Commission.
was registered in the name of Sanjiv Singla. Therefore, 8. The Petitioner has failed to explain this long delay
the Complainant was not entitled to the benefits under between 02.01.2017 when he received the impugned
the Insurance Policy, in question. order and on 11.03.2017 when he handed over the file to
11. It is pertinent to note that the Opposite Parties took the present counsel, Thereafter, no date wise reason for
up specific plea in their written reply that before the the long delay from 11.03.2017 to August 2017 have been
filing of the complaint itself, the Complainant had given. The revision petition was finally filed on
transferred the vehicle to one Amandeep Singh and, 21.08.2017. The Petitioner has failed to give the day to
as such, was not the owner thereof and, therefore, day explanation for condoning the inordinate delay of
was not a consumer. The Complainant in his affidavit, 154 days.
Ex.C-21, never denied that fact. The Opposite Parties 9. In fact the number of days of delay has neither been
proved on record the letter dated 12.08.2015, Ex.OP- mentioned in the application for condonation of delay
12; which was written to D.T.O., Sangrur, for the nor in the prayer. The application has been filed in a
verification of that fact. As per the report of the D.T.O., very casual manner. The revision petition deserves to be
endorsed on that letter, the ownership of the vehicle, dismissed on the ground of limitation alone.
in question, was transferred from the name of the 10. Coming to the merits of the case, the learned counsel for
Complainant to Amandeep Singh S/o Bharpur Singh the Petitioner, Bharat Bhushan has contended that the
on 02.07.2015. From that report, it stands proved that State Commission had erred in not appreciating that the
the Complainant was not the owner of the vehicle on Petitioner herein had a time of 14 days to apply for the
the date, he filed the complaint. The Insurance Policy transfer of insurance after transfer of the registration
regarding that vehicle was never transferred in his certificate of the vehicle and till then the insurance is
favour and, therefore, he could not have maintained deemed to be transferred in the name of the purchaser.
the complaint, after he ceased to be the owner of the He further contended that the State Commission had erred
vehicle. in holding that the vehicle in dispute was sold to
12. In the result, this appeal is allowed and the order Amandeep Singh son of Bharpoor Singh on 02.07.2015,
passed by the District Forum is set aside. The complaint hence, the Petitioner could not file the complaint.
filed by the Complainant is dismissed."

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Consumer Case Studies

11. Section 157 of the Motor Vehicle Act, 1998 reads as under: (I) the receipt obtained under sub-section (2)
"157. Transfer of certificate of insurance - of section 48; or (II) the postal
(1) Where a person in whose favour the certificate of acknowledgment received by the transferee
insurance has been issued in accordance with the if he has sent an application in this behalf
provisions of this Chapter, transfers to another by registered post, acknowledgment due to
person, the ownership of the motor vehicle in respect the registering authority referred to in
of which such insurance was taken together with section 48, together with a declaration that
the policy of insurance relating thereto, the he has not received any communication
certificate of insurance and the policy described in from such authority refusing to grant such
the certificate shall be deemed to have been certificate or requiring him to comply with
transferred in favour of the person to whom the any direction subject to which such
motor vehicle is transferred with effect from the date certificate may be granted;
of its transfer.
1[Explanation- For the removal of doubts, it is hereby (b) the transferee shall, within thirty days of the
declared that such deemed transfer shall include transfer, report the transfer to the registering
transfer of rights and liabilities of the said certificate authority within whose jurisdiction he has the
of insurance and policy of insurance.] residence or place of business where the vehicle
(2) The transferee shall apply within fourteen days from is normally kept, as the case may be, and shall
the date of transfer in the prescribed form to the forward the certificate of registration to that
insurer for making necessary changes in regard to registering authority together with the
the fact of transfer in the certificate of insurance prescribed fee and a copy of the report received
and the policy described in the certificate in his by him from the transferor in order that
favour and the insurer shall make the necessary particulars of the transfer of ownership may be
changes in the certificate and the policy of insurance entered in the certificate of registration".
in regard to the transfer of insurance".
13. As per the Complainant, the Petitioner had purchased
12. Here section 50 of the M V Act, which reads as under: the said car in Dec’14. There is nothing on record to
"50. Transfer of ownership - show if the transferor had reported the sale and transfer
(1) Where the ownership of any motor vehicle registered of the vehicle within 14 days to the registering authority
under this Chapter is transferred,-- as also the insurer. Nor is there anything on record to
(a) the transferor shall,- show whether the transferee, that is the Petitioner, within
(i) in the case of a vehicle registered within thirty days of the transfer reported the same to the
the same State, within fourteen days of the registering authority, within whose jurisdiction he
transfer, report the fact of transfer, in such resides. In fact, as per record he applied and got the car
form with such documents and in such was transferred only on 06.05.2015. His period of
manner, as may be prescribed by the Central fourteen days to apply for the transfer of policy in his
Government to the registering authority name would start from the date of transfer of the car to
within whose jurisdiction the transfer is to him. While he has not given the date, it was certainly
be effected and shall simultaneously send sometime in Dec’14. Hence, he had by all accounts not
a copy of the said report to the transferee; applied for transfer of insurance within fourteen days.
and
(ii) in the case of a vehicle registered outside 14. The Petitioner had placed on record a letter from the
the State, within forty-five days of the District Transport Officer, Sangrur to the effect that the
transfer, forward to the registering ownership of the concerned vehicle had been transferred
authority referred to in sub-clause (i)- in the name of the Petitioner on 06.05.2015 as per the
(A) the no objection certificate obtained records of their office. He had further placed on record
under section 48; or (B) in a case where that the ownership of vehicle no. PB BB 0885 had been
no such certificate has been obtained,- transferred in the name of Aman Deep Singh with effect
from 02.07.2015. However, the Petitioner has
intentionally not mentioned or placed on record any
documents, to show the date on which he had purchased
the vehicle from Mr Sanjeev Singhla and on which date
he had sold the vehicle to Mr Aman Deep Singh. These

fada.in | May 2018 F A D A Journal 37

Consumer Case Studies

dates are very crucial. The Petitioner should have applied Transfer fee amounting to Rs.57;
within fourteen days of the purchase of the car from Copy of your driving licence and name and relations of
Sanjeev Singhla for transfer of insurance to his name. nomination for personal accident to owner driver".
Further, the benefit of deemed transfer under section 157 15. Hence on the date of the accident, i.e., 06.05.2007, the
is only applicable to a 3rd party insurance. If the policy insurance policy did not stand transferred in the name
of insurance covers other risks as well as damages of the Petitioner nor was he covered under the deemed
caused to the vehicle of the insured himself, that would cover clause. Further, he has also not mentioned as to
be a matter falling outside the Chapter XI of the Act and when he sold the car to Aman Deep Singh, but only when
in the realm of contract for which there must be an the registration was transferred to his name. He has also
agreement between the insurer and the transferee, the not mentioned the date on which he had informed the
former undertaking to cover the risk or damage to the RTO and the insurance company about the sale of the
vehicle. In the instant case, in response to the application said vehicle to Aman Deep Singh. Hence, on the date of
dated 11.05.2015 for transfer of insurance of vehicle, the accident, i.e., 06.05.2007, he had no insurable
the respondent have sent a letter to the Petitioner asking interest in the said vehicle on two counts (i) he had no
for the documents required for transfer of the insurance insurance policy in his name to claim compensation for
policy. The letter reads as under: the damage to the car as on that date and secondly, on
"We are in receipt of your letter dated 06.05.2015 for the the date of filing of the complaint, he was not the owner
transfer of insurance in your name. The following of the car as he had already sold the car to Aman Deep
documents are required for the transfer of the insurance, Singh. These facts have been concealed in his complaint.
kindly supply us the same: 16. In view of the discussion above, I find no jurisdictional
Original Policy of insurance, No objection letter from error or material irregularity in the impugned order which
previous owner for the transfer of insurance in your name; may call for interference in exercise of powers under
Produce the vehicle for inspection at our Divisional section 21 (b) of the Consumer Protection Act, 1986.
Office Sangrur/ Patiala and get the pre-inspection report Revision Petition is, therefore, dismissed as also the
and submit the same to us; complaint is dismissed with no order as to costs.

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]

38 F A D A Journal May 2018 | fada.in

Know Our Member

Amit Motors Pvt Ltd, Faizabad, Uttar Pradesh

Amit Motors Pvt Ltd, a life member of F A D A, came into The dealership having customer centric approach is
existence as Amit Auto Sales in Faizabad, Uttar Pradesh in professionally managed and has earned tremendous loyalty
1989 on the banks of river Saryu. The authorized dealership from customers resulting in large percentage of business
of Mahindra & Mahindra Ltd was set-up by Late Yashpal Ghai coming through references from existing customers.
and his elder son Sanjay Ghai with passion to provide
mobility solution to people to enhance their quality of life. At Amit Motors, a high standard of excellence in sales and
They were joined in this journey by Amit Ghai, younger brother service is maintained by sending its personnel for training
of Sanjay Ghai as Director. and development on regular basis to Mahindra & Mahindra

to update them with latest technological
advancements in automotive sphere. For
consistent training, development and
capacity building in sales and service
domain, the dealership has full time In-house
trainers to keep standards of knowledge, skill
and attitude of staff at the peak.
In October 2017, Amit Motors ventured in as
distributors for Mahindra Electric 3-
Wheelers for Central Uttar Pradesh covering
16 districts under the aegis of it’s new
company - Amit Motocorp Pvt Ltd.
To meet the demands of the Clean Fuel Public
Transport Requirements, management at Amit
Motors is working on putting into place a
separate sales channel.

Over the years, Amit Motors Pvt Ltd has grown exponentially
with operations spreading across six districts of Uttar
Pradesh viz. Faizabad, Gonda, Bahraich, Shrawasti,
Balrampur and Ambedkar Nagar converting Amit Auto Sales
to Amit Motors Pvt Ltd, a private limited company in 2012.
All the outlets provide 3S facility at all locations. The
dealership has earned a repute of being a respectful brand
in automotive retail business. The current lines of business
include: Vehicle Sales, Servicing & Repair.

The dealership at Faizabad having showroom area of over Sanjay Ghai Amit Ghai
50,000 sq feet is able to service 55 vehicles at a point of time
and around 160 vehicles in a day. The dealership remains All the businesses are being managed very professionally by
committed to the mission of delivering value to its esteemed young and energetic team. Plans for the future are also very
customers, employees and the society as a whole. ambitious, as the Management intends to make Amit Motors
With a dedicated workforce of 530-plus employees, Amit a leading Auto Solutions Distribution Company.
Motors has achieved an annual turnover close to Rs. 255
crores, selling 4,726 vehicles and servicing 58,477 “Growing Together & providing delightful sales and service
vehicles. It has been the hard work and the vision of its experience to all customers” is the motto at Amit Motors.
management and their professional team that today, Amit
Motors is a renowned name. The motto of the dealership F A D A wishes Amit Motors Pvt Ltd all the best in their
is to provide delightful sales and service experience to all endeavour and quest for further growth
its customers.

fada.in | May 2018 F A D A Journal 39

New Unveils

The New MINI Countryman
Launched in India

Locally-produced at BMW Group Plant Chennai, the The interior blends modern aesthetics and refined
second-generation all-new MINI Countryman was craftsmanship with practical functionality. The typical MINI
launched at Bird Automotive, authorised MINI cockpit impresses with its clear horizontal structure,
Dealership in New Delhi on May 3. The new MINI stretched lines and generously sized surfaces. The iconic
Countryman will be available in both petrol and circular central instrument panel is surrounded by an LED
diesel variants with deliveries beginning from June ring offering a brilliant colour display in 6.5-inch or 8.8-
2018 onwards. inch touchscreen. The intuitive use is complemented by the
Vikram Pawah, President, BMW Group India said, controller on the middle console for easy operation of
“The new MINI Countryman is built for adventure multimedia, phone and car functions.
and an ideal companion for city trips to country
getaways and long journeys. The second generation Using the cargo function, boot capacity can be increased
of the MINI Countryman is a perfect fit for an urban from 450 litres to 1,309 litres by folding down the rear
environment offering unique driving comfort, refined backrest with its 40:20:40 split.
interiors and clever functionality.”
Powered by a new range of petrol and diesel engines The all-new MINI Countryman is stacked with cutting-edge
developed from the latest MINI TwinPower Turbo Technology safety technology. The standard safety equipment comprises
offering outstanding performance and efficiency, the 2-litre of front and passenger airbags, Brake Assist, 3-Point Seat
4-cylinder petrol engine with TwinPower Turbo Technology Belts, Dynamic Stability Control, Crash Sensor, Anti-lock
makes the MINI Countryman Cooper S, high on performance Braking System, Cornering Brake Control and Run-flat tyres
and light on fuel. It mobilises a peak output of 141 kW/192 as standard.
hp and a maximum torque of 280 Nm torque. It sprints to 100
km/hr in 7.5 seconds and the top speed is 225 km/hr. The The all-new MINI Countryman will be available in five
MINI Countryman Cooper SD 4-cylinder diesel engine colours: Island Blue, Light White, Chilli Red, Melting Silver
generates a peak output of 140 kW/190 hp and a maximum and Thunder Grey as well as British Racing Green offered
torque of 400 Nm torque. It sprints to 100 km/hr in 7.7 exclusively for the MINI Countryman Cooper S JCW
seconds and the top speed is 220 km/hr. Inspired.
The standard 8-speed automatic steptronic transmission
offers even more efficient, comfortable and sporty driving The ex-showroom prices (effective June 2018) of the three
due to a broader gear spread and smaller engine speed steps. variants of MINI Countryman are as follows -
The 8-speed sports automatic steptronic transmission in the
MINI Countryman Cooper S JCW Inspired with shift paddles Cooper S (Petrol) : INR 34,90,000
makes for even sportier driving.
Exterior of the new MINI Countryman goes even further in Cooper SD (Diesel) : INR 37,40,000
versatility, agility and premium character. Its powerful
proportions lend a particularly distinctive presence that Cooper S JCW Inspired (Petrol) : INR 41,40,000
combine iconic MINI design language with enhanced
functionality. Precise contours on the surface underline the
cars athletic shape and vertical orientation. Contrasting roof,
upright rear lights, hexagonal radiator grille and large
headlamps have undergone revolutionary development. The
roof-rails in satin-finished aluminium are combined with
silver-coloured side sill tops, thereby lending greater visual
emphasis to the height of the car. The distinctive, slightly
asymmetrically rounded contour of the LED headlamp together
with the radiator grille produces a distinctive front view.

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

Upgrades

Maruti Introduces Vitara R S Kalsi, Sr Executive Director, Marketing and Sales, MSIL
Brezza with AMT said: “Vitara Brezza has been a game changer for India’s SUV
market. We have enhanced its allure to meet aspirations of
Maruti Suzuki India Ltd (MSIL) introduced SUV Vitara Brezza our young customers. They now have the option of Auto Gear
with a new, enhanced look, and the convenience of the Shift, the acclaimed two-pedal technology, for enhanced
acclaimed Auto Gear Shift (AGS) as an option. convenience. AGS has been very well accepted by customers
The exterior and interior features have been given a makeover, and sales of AGS variants in the Maruti Suzuki portfolio have
enhancing the bold & sporty character of the country’s tripled in three years. By making this technology available
popular SUV. The new alloy wheels, in glossy black finish, on Vitara Brezza, together with a refreshed design, we expect
add sportiness to the SUV's muscular wheel arches. To India’s number one SUV to become even more attractive.”
complement the premium look, the front chrome grille and Vitara Brezza now complies with advanced safety regulations,
back door chrome garnish have been made standard across including pedestrian safety, ahead of regulation timelines.
all variants. The compact SUV’s interiors have been refreshed The refreshed Vitara Brezza comes loaded with new safety
with an all-black colour scheme & complementing accents. features comprising ISOFIX child restraint system, high speed
MSIL’s revolutionary two-pedal technology, Auto Gear Shift, warning alert, dual air bags, ABS with EBD, reverse parking
is now being offered on Vitara Brezza. It has been fine-tuned sensors and front seat belt pre-tensioners and force limiters.
for an optimum performance on Vitara Brezza. These features have now been made standard across all
variants. Vitara Brezza is already certified for offset and side
• Cumulative sales of around 2.75 lakh units since launch impact crash tests since its launch.
• 2017-18 sales at 148,462 units (up 36.7%) Priced in between Rs. 8,54,000 – 10,49,000 and offered in
• Average monthly sales : over 12,300 units VDi, ZDi and ZDi+ variants, Vitara Brezza is available in 11
• Top variants (Z/Z+) contribute 56% of total sales colour options - Autumn Orange with Pearl Arctic White roof
• Sporty and stylish looks have made V itara Brezza top (New) | Autumn Orange (New) | Blazing Red with Midnight
Black roof | Fiery Yellow with Pearl Arctic White roof | Pearl
choice among customers. Arctic White | Granite Grey | Premium Silver | Blazing Red |
Fiery Yellow

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

Dealer in News

Tata Motors Expands PV Dealership Network

Inaugurate Puneet Automobiles Pvt Ltd in Lucknow and Lexus Motors in Rajarhat, Kolkata

Tata Motors inaugurated new state-of-the-art full-range Dealer Principal, Puneet Automobiles Pvt Ltd, said, “Equipped
passenger vehicle dealerships, M/s Puneet Automobiles Pvt with the latest technology, this new dealership will retail
Ltd in Lucknow and Lexus Motors in Rajarhat, Kolkata on new generation passenger vehicles. Tata Motors aims to
May 2 and April 25, respectively. Both of the dealerships increase its reach aggressively and through these
were inaugurated by Guenter Butschek, CEO and MD, Tata touchpoints it will continue to offer best value and experience
Motors and Mayank Pareek – President, PVBU, Tata Motors. to customers.”
Expanding its class-leading automotive experience, the
inaugurations of these dealerships is a step towards Tata Lexus Motors, Rajarhat, Kolkata
Motors’ aggressive expansion plans.

Additionally, the Company also announced the launch of its
newest product in the AMT segment – the NEXON Hyprdrive
Self - Shift Gears (S-SG) at Puneet Automobiles Pvt Ltd.

Guenter Butschek, CEO & MD, Tata Motors, said - “With
‘Connecting Aspirations’ at the center of our brand promise,
we at Tata Motors are working with our network partners to
offer our customers a solid product mix and a delightful
experience. We continue to enhance and expand our network
to cater to our demanding customers with high expectations.

Puneet Automobiles Pvt Ltd, Lucknow

Strategically located in Tiwariganj, Faizabad Road at Lucknow, Lexus Motors is the Company’s 7th showroom in Kolkata and
this dealership has been luxuriously designed with 5,500 sq spans across 8,000 sq ft of area. Strategically located in the
ft area dedicated only for display of vehicles to attract new upmarket Auto Mall at Rajarhat, the showroom has been
customer profiles. Additionally, a workshop area that is luxuriously designed with 4,000 sq ft showroom area
spread over 14000 sq. ft. provides the visitors with dedicated only for display of vehicles to attract new customer
technologically advanced services like auto car washer and profiles.
body paint shop; along with ample parking space. Guenter Butschek said, “We have strategically chosen this
Guenter Butschek, CEO & MD, Tata Motors said , “The location to create a noticeable brand presence in the most
inauguration of this new 3S facility and the launch of the active hub of the city. This flagship showroom in Kolkata is a
NEXON Hyprdrive Self-Shift gears is a testimony to our step forward in the right direction.”
continuous efforts towards this endeavor.” Prabash Mishra, Binod Agarwal, Dealer Principal, Lexus Motors, said, “With a
long standing relationship with Tata Motors since 1991, we
are happy to launch this showroom at a prime location like
Auto Mall, Rajarhat. With a commitment to provide best-in-
class purchase experience during sales and after service to
all our customers, we look forward to working with Tata
Motors and strengthen our relationship in the years to come.”
Equipped with the latest technology, this new showroom will
retail new generation passenger vehicles. Tata Motors aims
to increase its reach aggressively and through these
showrooms it will continue to offer best value and experience
to customers.

42 F A D A Journal May 2018 | fada.in

Dealer in News

Bird Automotive Opens New Facility in Gurugram

BMW India announced the opening of a new facility of Bird new facility further strengthens our commitment towards our
Automotive in Gurgaon. Located at Address One (BAANI), 1 discerning customers in one of the most promising markets
Golf Course Road, Sector 56, Gurugram, Haryana. The in India. It will play an important role in BMW’s growing
dealership is headed by Gaurav Bhatia. market offensive.”
With this new addition, Bird Automotive now represents BMW Spread over an area of 4,622 sq ft, the ultra-modern
India with a total of three dealership facilities in Gurugram showroom will display up to 7 cars based upon the signature
and one MINI facility in Delhi. ‘Urban Street Display’ concept and sales lounges close to the
display area. The dealership will also display original BMW
Vikram Pawah, President, BMW Group India said, “BMW is Lifestyle Collection, which includes a wide range of new
committed to providing ‘Sheer Driving Pleasure’ with its clothing, accessories and luggage. Customers can also select
aspirational products, immersive brand experience and BMW M Performance Accessories to enhance the motorsports
unrivalled aftersales service. The launch of Bird Automotive’s DNA of theirs BMW cars.
Gaurav Bhatia, Dealer Principal, Bird Automotive said, “For
the last ten years, Bird Automotive has been constantly setting
benchmarks in luxury automotive retail in the millennium
city of Gurugram. The perfect mix of world-class facilities,
dynamic BMW cars, extremely high standards of service,
coupled with our sound experience allows us to anticipate
and cater to every demand of our customers. We are delighted
to present our third facility in Gurugram and are confident
that this expanding footprint will lead to further business
growth for us.”
Bird Automotive has employed a strong workforce of over
250 employees across all its facilities. The team of service
engineers has also been trained at BMW’s training centers in
Gurgaon, Singapore, Malaysia and Germany.

Toyota Inaugurates New State-of-the-Art Dealership in Bilaspur

Toyota Kirloskar Motor (TKM) fortified its reach in the country In addition to retailing the entire range of Toyota products in
by inaugurating its 305th dealership - J D Toyota in Bilaspur, India, the new dealership is fully stocked to facilitate
Chhattisgarh. The dealership denotes facilities such as 3S, distinctive experience to customers with services like Express
2S, 1S, 2S Body & Paint and Satellite in India. The dealership Maintenance, Body & Paint Repair and other Value Added
was inaugurated by N Raja, Dy MD, TKM along with Girish Services. Toyota has employed its unique customer centric
Saluja, Dealer Principal, J D Toyota initiative of Best-in-Town to achieve the BEST with
Spreads over 5,800 sq meters, J D Toyota is well-equipped INNOVATIONS. This is the company’s road ahead to offer the
with ultra-modern amenities manned by skilled, well-trained most remarkable experience to its customers in achieving
& enthusiastic sales and service team, to ensure every customer delight.
customer has the most enjoyable and hassle-free car buying
& owning experience with Toyota. Girish Saluja said, “It is indeed our privilege to associate
N Raja said, “The inauguration of J D Toyota in Bilaspur marks with Toyota, one of the best carmakers in the world. Customers
yet another milestone in our continuous endeavour to will receive best-in-class purchase and service experience
establish fruitful and everlasting relationships with our at our modern facility. We are extremely delighted to bring
patrons. Our approach is to offer advanced amenities and Toyota’s global standard products & services to the people
quality services through strategically located networks set in the region, while we ensure the highest level of customer
up in different parts of the country.” satisfaction and bolster the reliable and dependable image
of the brand.”

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

Dealer in News

Mercedes-Benz Strengthens its Presence in Gujarat

Revamps Benchmark Cars in Ahmedabad

Mercedes-Benz strengthened its presence by inaugurating a successfully expanding into new and established markets
refurbished sales facility - Benchmark Cars - in Ahmedabad. and are confident of creating new benchmarks in the industry.”
The facility was inaugurated by Michael Jopp, Vice President Located strategically at Sarkhej-Gandhinagar Highway, the
- Sales & Marketing, Mercedes-Benz India and Sanjay Thakker, ultra-modern facility is a one-stop automotive luxury
Chairman, Benchmark Cars. destination hosting 12 new cars along with 5 Pre-owned car
Speaking on the occassion, Michael Jopp said, “Ahmedabad display. It also boasts of a plush customer lounge, café
remains a key market for Mercedes-Benz India, thanks to the Mercedes integrated with exclusive area for accessories and
steady growth we have witnessed in this city, with significant merchandise display and 9 screen video wall.
contributions to our overall volumes. We have been The facility is built in a time span of 7 months with an
investment of Rs. 2 crore. The facility is staffed with 16
professionally trained sales personnel to ensure superlative
customer experience and satisfaction.

Sanjay Thakker, Chairman, Benchmark Cars said, “Benchmark
Cars has been associated with Mercedes-Benz for the last 9
years and we are extremely pleased to continue this strong
relationship. The state-of-the-art luxury facility that
incorporates intricately curated modern interior architecture,
which exudes modern luxury. Benchmark Cars is strategically
located in Ahmedabad and is now integrated with a Mercedes-
Benz Certified section which assures you to Trust the Best
with many features, viz. Verified vehicle history, 5-day
exchange policy, On road assistance, 139 check point
evaluation, Flexible service packages, etc. The convenient
location backed by state-of-the-art infrastructure will make
this is a landmark of retail luxury in Gujarat.

Škoda Auto India Partners with Global Motocorp

ŠKODA AUTO India (ŠAI) launched its newly designed 3S (Sales,
Service and Spares) facility, Global Motocorp LLP, in Kolkata
on May 3, 2018.

Commenting on the inauguration of the new facility, Ashutosh
Dixit, Director - Sales, Service & Mktg, ŠAI, said, “ŠKODA AUTO
India is fully geared to further expand its brand presence in
the eastern markets of our nation. In line with our expansion
strategy and West Bengal being one of the key markets, we
are pleased to partner with Global Motocorp LLP.”

The sales facility of Global Motocorp LLP is strategically “We are delighted to partner with ŠKODA AUTO India to unveil
located at AJC Bose Road, Kolkata and sprawls over an area our newly designed facility. The new appearance & optimized
of 3,884 sq. ft. of premium showroom space that can business processes will provide the ideal backdrop for the
accommodate a six car display. The showroom is supported presentation of ŠKODA products to our customers. The
by a service facility, accessibly located at Village Chowbaga, advancement of ŠKODA makes us more affirmative, confident
PS - Anandapur, 853, Anandapur Road, Kolkata, which spans and committed to our valued customers in this region.”
across a substantial 20,340 sq. ft. (1890.3 sq. m.) area.
Kunal Agrawal, Dealer Principal, Global Motocorp LLP, said,

44 F A D A Journal May 2018 | fada.in



News Basket

Bihar Gets its First Institute of Driving Training & Traffic Research
in Collaboration with Maruti Suzuki

Hon’ble Chief Minister of Bihar - Shri Nitish Kumar state governments, as part of its CSR efforts to promote road
inaugurated the State’s first Institute of Driving Training and safety and bring down fatalities.
Traffic Research (IDTR) in Aurangabad in the presence of The IDTR has been set up under Public Private Partnership
senior officials from the State Government, on May 4, 2018. mode, between the Government of Bihar and MSIL, and with
The institute is set up in collaboration with Maruti Suzuki guidance and support from Ministry of Road Transport and
India Ltd (MSIL).
The IDTR will set standards for quality driving training and Highways. The Government has
also impart driving training, theoretical and practical, to provided the land and building, while
aspiring and existing drivers. The institute will focus on the MSIL will manage and run the facility.
‘Train-the-Trainer’ model, to have a multiplier effect and The Company has set up modern class
upgrade the driving skills of a larger number of people. MSIL rooms, scientifically designed driving
already manages six IDTRs across India, in partnership with tracks and provided driving
simulators, vehicles and qualified
trainers. This IDTR spread across 15
acres will also host a 150-seater
auditorium, a library, laboratory and
a hostel to accommodate 80 trainees.
IDTR will follow MSIL’s exhaustive
course curriculum, designed to
include all critical aspects of driving
training and traffic research.
In addition to imparting driving
training to the people in the state,
MSIL will support the Government in conducting road safety
awareness programmes for people and school children.
MSIL already manages six IDTRs in partnership with State
Governments across India in Delhi (2), Haryana (2),
Uttarakhand (1) and Gujarat (1).

New Honda Amaze 2018 Production Begins

Honda Cars India Ltd (HCIL) has commenced the production The New Honda Amaze is a true expression of One Class
of New 2nd Generation Honda Amaze. The car is being Above Premium Sedan with an all new bold design, spacious
manufactured at HCIL’s Tapukara plant in Rajasthan, India. premium interiors, outstanding driving dynamics with
The New Amaze is scheduled to be launched on May 16. strong focus on stability and latest in safety technologies
Commenting on the start of production, Rajesh Goel, SVP & & convenience features. This car is built on an all-new
Director, HCIL, said, “We are delighted to announce the platform incorporating Honda’s advanced engineering
beginning of production of new Honda Amaze. This model prowess and expertise in research and development.
will be a game changer for Honda Cars India – both in terms Introduction of Diesel CVT in the Amaze, which offers
of boosting our business and further strengthening our model- powerful and effortless driving experience, is Honda’s first
lineup with advanced technology. The 2nd Generation Amaze such technology in the world and also an industry first in
has received excellent response from customers since its the Indian market.
world premiere at the Auto Expo. As a special gesture to the The first generation Amaze was introduced in India in year
customers who are booking the car even before knowing the 2013. It marked Honda’s entry into compact sedan segment
price and variant details, we have decided to offer a special and was the first car in the company’s product line-up to get
introductory price for the initial 20,000 bookings.” the advanced i-DTEC diesel engine technology.

46 F A D A Journal May 2018 | fada.in

News Basket

Honda 2-Wheelers India Hits a Sixer in the Start of FY18-19

Honda Motorcycle & Scooter India Pvt Ltd (HMSI) has made a Honda’s motorcycles sales too breached the 2 lakh unit mark
flying start for the fiscal year 2018-19 with announcement of for the first time, growing 16% from 1,83,182 units in April
its big bang sales in the month of April itself. 2017 to 2,12,284 units in April 2018.
Exports too grew by whopping 70% to close at EVER HIGHEST
1. Honda’s domestic sales BREACH the HISTORIC 6 LAKH+ of 46,077 units.
mark for the first time HIGHLIGHTS OF APRIL 2018
• FY2018-19 plan announcement: Honda guns for third
2. Scooter sales cross the 4 lac unit sales milestone for
first time in single month consecutive year of double digit growth and earmarked
Rs. 800 crore investment outlay for this fiscal year.
3. Domestic sales grow by double-digit 15% to HIGHEST • New Brand & Communications operation announced to
EVER of 6,35,811 units propel Honda’s brand power in India.
• Record Festive retails: Backed by customer choosing to
4. Total sales zoom 18% to HIGHEST EVER of 6,81,888 units celebrate with Honda, single day retails on Akshay
5. Honda’s motorcycle sales too breach the 2 lac mark for Tritiya, the first major festival of the year grew by 80%
plus to highest ever.
first time • Milestone: Honda’s advanced-urban 125cc scooter
6. Exports too grows by a whopping 70% to the HIGHEST GRAZIA sales cross 1 lac mark in just 5 months.
• Road Safety: Honda spreads road safety awareness to
EVER of 46,077 units. 70,000 people during National Road Safety Week.
• Motorsports: Honda announces biggest directional shift
HMSI domestic sales breached the 6 lakh mark for the first to develop Iconic Indian rider for National & International
time ever in April 2018. Domestic sales grew 15% from racing. Honda 2wheelers India forms the Indian team
5,51,732 units in April 2017 to 6,35,811 units in April 2018. and rookie rider Anish Shetty scores first points in round
Both Honda’s scooter and motorcycle sales are at highest 2 of Asia Road Racing Championship in Australia.
ever in the start of FY’2018-19.
Creating new benchmark of scooterization, Honda breached
the 4 lakh scooter sales mark in single month for first time.
Scooter sales sky-rocketed by 15% from 3,68,550 units in
April 2017 to 4,23,527 units in April 2018.

Nissan India Saves Million Litres of Water

In line with the vision of enriching people’s lives, Nissan in
India has saved 95 million litres of water over the past four
years though an innovative cars wash technique called Foam
Wash. Introduced in 2014 at most of the service centres
across India, the Foam Wash technique uses only 90 litres of
water per car compared to the conventional car wash which
consumes 162 litres, thereby reducing water consumption
by 44%. Car washes at service centres are a major component
of after sales and servicing of customers’ vehicles that require
a large amount of water.

Commenting about the initiative, Sanjeev Aggarwal, Vice
President, After Sales at Nissan Motor India Pvt Ltd, said,
“Nissan aims to contribute towards sustainable
development of society through our product and services.
The Foam Wash initiative is quite popular amongst
Nissan and Datsun car owners and allows us to
collectively save water, time and contribute towards a
sustainable eco-system.”

fada.in | May 2018 F A D A Journal 47

Surveys & Studies

Customer Perception of Brand Image Strongly Influenced by Tyre
Quality, J D Power Finds

Apollo Ranks Highest in Small Car Segment; MRF Ranks Highest in Midsize Cars and Utility Vehicle Segments

Improvement in product quality over the past five years has
resulted in a higher frequency of tire brand image being cited
as an important purchase criteria during the replacement
process, according to the J D Power 2018 India Original
Equipment Tyre Customer Satisfaction Index (TCSI) Study,
released on May 2, 2018

The number of customers experiencing problems with original
equipment (OE) fitted tyres has declined by 7 percentage
points during the past five years (12% in 2013 vs. 5% in 2018).
Within this same period, the proportion of customers citing
brand image as an important driver for selection of their tire
replacement has increased by 12 percentage points (45% in
2013 vs. 57% in 2018).

“Sustained efforts in quality improvement among tire brands
is being reflected in the Voice of the Customer,” said Kaustav
Roy, Regional Director at J D Power, Singapore. “A positive
product experience, coupled with end-customer engagement,
is likely to help drive replacement demand.”

The following are additional key findings of the study:

OE tyre brand preferred: Preference of the OE tyre brand
during tyre replacement has increased to 54% in 2018 from
48% in 2017.

Tyres replaced less often in first two years: The replacement
of tyres during the first 12–24 months of ownership is
declining (5% in 2018 vs. 10% in 2013).

Small car tyres outperforming other segments: With respect
to vehicle segments, satisfaction with tires in the small car
segment (889 on a 1,000-point scale) is higher than in the
midsize car segment (872) and utility vehicle segment (882).

High satisfaction drives loyalty and advocacy: The study finds The 2018 India Original Equipment Tyre Customer
that 88% of owners who are highly satisfied (overall Satisfaction Index (TCSI) Study is based on 3,620 responses
satisfaction scores of 989 and above) with their original from new-vehicle owners who purchased their vehicle
tires say they "definitely would" recommend their tire brand. between May 2015 and August 2016. The study was fielded
Among customers who are less satisfied (814 and below), between May and August 2017.
only 42% say they would do the same. The study, now in its 18th year, measures satisfaction among
original equipment tire owners across three segments: small
Study Rankings cars, midsize cars and utility vehicles. The study covers the
first 12 to 24 months of ownership across four factors (listed
Apollo ranks highest in the small car segment (899), followed in order of importance): appearance; durability; ride; and
by JK Tyre (894). MRF ranks highest in the midsize car segment traction/handling.
(877), and Apollo ranks second (876).In the UV segment, MRF
ranks highest (891), followed by Bridgestone (890).

48 F A D A Journal May 2018 | fada.in

Surveys & Studies

TVS Tops in Customer Satisfaction for Third Consecutive Year: J D Power

Although vehicle manufacturers (OEMs) place a strong focus communication activities within the optimum time parameters,
on executing service quality-related processes, such as work is 799 points, which is 51 points higher than industry average.
done right the first time and washing the vehicle after The following are additional key findings of the study:
servicing, these processes alone do not necessarily Scheduling service improves satisfaction: Instances of
correspond to the highest levels of customer satisfaction, customers scheduling their service visit through a prior
according to the J D Power 2018 India Two-Wheeler Customer appointment have increased to 31% in 2018 from 20% in
Service Index (2WCSI) Study, released on April 26, 2018. 2016. Satisfaction is higher among customers who schedule
Among the 88% of two-wheeler owners who were provided an appointment for servicing than among those who drop by
with these two service quality processes during their most the service dealer without an appointment (768 vs. 738,
recent service visit, satisfaction is 764 points (on a 1,000- respectively).
point scale), which is 16 points higher than the industry average. Comfort and connectivity key at service facility: Among the
“Vehicle servicing is often considered as a necessary chore, various facilities available in the service outlet, internet
and customers appreciate it when the manufacturer or access and an air-conditioned waiting area have the highest
workshop helps execute a service visit as effortlessly and positive impact on customer satisfaction.
conveniently as possible,” said Kaustav Roy, Regional Director Competitive pressure from non-authorized network: Nearly
at J D Power, Singapore. “The focus needs to shift from servicing 1 in 5 (18%) customers indicate having visited a non-
the vehicle to engaging the customers. Two-wheeler OEMs authorized service network within 24 months of vehicle
that take the first step in providing these activities will likely ownership. Manufacturers can retain more of these
be able to differentiate their service offering from that of customers in the authorized network by providing a richer
other OEMs and the non-authorized service network.” experience. Among customers who are highly satisfied with
Overall satisfaction among customers who were provided the authorized network (overall satisfaction score of 855
with key service quality processes, supported by relevant points or higher), the defection rate to a non-authorized
network drops to 12%.

Study Rankings

TVS ranks highest in customer satisfaction for the third
consecutive year, with a score of 784, performing particularly
well in all five factors. Royal Enfield ranks second with a
score of 749. Overall customer satisfaction with two-wheeler
after-sales service is 748. In the two-wheeler segments, the
overall satisfaction score averages 746 for scooters and 749
for motorcycles.

The 2018 India 2WCSI Study is based on evaluations from
7,436 two-wheeler owners in 45 cities across India. These
owners purchased a new two-wheeler between November
2015 and March 2017 and had a service experience within
three months of evaluation. The study was fielded from
November 2017 to March 2018.

The study, now in its third year, measures customer
satisfaction with the after-sales service experience at OEM-
authorized service centers during the first 12-24 months of
ownership. The study examines overall satisfaction in five
factors (listed in order of importance): vehicle pick-up (22%);
service advisor (21%); service quality (20%); service facility
(19%); and service initiation (18%). Overall customer
satisfaction is measured on a 1,000-point scale

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

Global News

Consumers Overwhelmingly See Personal Vehicle Ownership as
Key to Future Mobility

Consumer demand for personal vehicle ownership remains This sentiment is overwhelming even among millennials, who
overwhelmingly strong across all demographics, according prefer vehicle ownership by a 80-20% margin. Importantly,
to a new study commissioned by the National Automobile millennials in the suburbs or rural areas were six points
Dealers Association (NADA). less interested in ride-hailing than their urban counterparts.
Released at the 2018 Automotive Forum in New York, the study Consumers overwhelmingly view vehicle ownership as
consisted of a large national survey of US consumers on convenience, not a cost-drag or nuisance to own, as several
their attitudes toward autonomous vehicles, ride-hailing, car studies suggest. Only 6.5% of consumers in the survey viewed
sharing and personal vehicle ownership. The survey’s owning a car as a hassle or costly nuisance.
findings run contrary to a number of recent reports predicting Consumers view wait times as a significant drawback of ride-
that the convergence of electric vehicles (EVs), autonomous hailing services. More than 88% of consumers said they would
vehicles (AVs) and ride-hailing services will dramatically cut need to save at least $15 per day to incur an hour of aggregate
the number of personally owned vehicles. waiting for ride-hailing services over a day. Half of consumers
“Consumers overwhelmingly prefer the freedom and flexibility in the survey said they would need to save $50 per day to
of owning a personal vehicle to ride-hailing services,” said incur an hour of aggregate waiting time.
Jonathan Collegio, NADA’s senior vice president of public Consumers are open to autonomous vehicle technology. 56%
affairs. “This sentiment cuts across all demographics and is of consumers said they would purchase a fully or highly
a durable, fundamental desire of most consumers, even autonomous vehicle, while 44% said they would not.
millennials. Ride-hailing will continue to supplement Consumers by an 80-20 margin would prefer to capture 80%
personal vehicle ownership going forward, but it will not of the safety benefits from semi-autonomous vehicles they
supplant it.” can still drive, as opposed to 100% of the benefit from fully
Key findings from the study include: autonomous, driverless vehicles.
Nine out of 10 respondents (89%) said they would rather “As an industry we have to understand our customers,”
continue owning a car, versus one out of 10 respondents continued Collegio. “And as the industry plans for the future,
(11%) who said they would prefer using ride-hailing as their we hope they will deeply study and investigate how consumers
exclusive mode of personal transportation. This question use, value, and enjoy relying on their personal vehicles.”
was asked after presenting the strongest arguments for the The survey of 1,200 consumers was commissioned by NADA
safety, affordability and accessibility of autonomous ride- and fielded by Luntz Global from March 2-5, 2018.
hailing services.

US Truck Dealers Push for Repeal of Federal Excise Tax on HD Trucks

Last month, Debra Gilkey, Executive VP and GM of Wallace truck cost the buyer $19,560 in FET along with a 6% sales tax
International Trucks in Fort Myers, Fla., hosted first-term of $9,780. In addition, over the past 15 years, EPA increases
Congressman Francis Rooney (R-Fla.) at the dealership, which in emissions standards have raised the base cost of trucks
has been a family-owned business since 1972. by more than $21,000 each. This increase, along with the
FET, has extended the buying cycle for the majority of our
Rep. Rooney, who met with employees and toured the customers, which in turn leaves older, less efficient trucks
dealership, was the first co-sponsor of HR 2946, a bill that on our highways.”
would repeal the 12% Federal Excise Tax (FET) on the sale of “We found out that many members of Congress who we visited
heavy-duty trucks and trailers. were totally unaware of the 12% FET on new heavy trucks and
trailers,” she added. “I urge all dealers to contact their
“We were pleasantly surprised to find out that Congressman Representatives and request they cosponsor HR 2946.”
Rooney was familiar with the FET on HD trucks because of his Laura Perrotta, ATD/NADA Senior Director of Legislative
family’s construction business, which purchases and Affairs, said the FET routinely adds between $12,000 to
operates commercial trucks,” Gilkey said. “During our visit $22,000 to the price of a new heavy-duty truck.
with him, we pointed out that a recent sale of a new dump

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