FADA Journal - July 2017

Know our Member

Oriental Motors, Jabalpur and Satna

Oriental Motors, a division of Oriental Retailers and Logistics With an objective to expand the business activities in other
Pvt Ltd, is a dealership of General Motors India, engaged in areas, Basant Ghorawat relocated in the year 1997 to a fast
sale, service and spares of Chevrolet vehicles. growing region i.e. Mahakaushal situated in central part of
A new member of FADA, Oriental Motors has been a General Madhya Pradesh.
Motors’ dealer for the last 8 years. Both the set-ups - at
Jabalpur and Satna - are 3-S facilities. While the Jabalpur set-
up has 3 branch outlets, the Satna dealership operations are
carried out from 4 locations.

Highly accomplished, result
driven, Basant Ghorawat has

more than 17 years of varied
business experience including
In addition to slew of other business activities, the Oriental
Group is also venturing into the dealerships of Nissan Motor the functional areas of
India and Tata Motors (CVBU and PVBU) for which the Group
has already received LOI and is in the process of commencing managing diverse business
their operations. activities, policy formulation
To ensure complete customer satisfaction and peace of mind,
Oriental Motors works on a 3-way philosophy, namely, & implementation, Finance,
Transparency, Timely delivery, Customer connect. With sales
of around 350 vehicles and repair & servicing of 8,000, the Resource Management,
dealership clocked a turnover to the tune of Rs. 50 crore during Business growth and Risk
the previous year.
Apart from automobile dealership business, the Oriental Mitigation matrix. Being
Group’s other business interests include: C&F agent for Parle
and Bajaj Corp, Transportation and Logistics, Manufacturing customer centric, Basant’s
and Retail of readymade garments, distribution & retail of focus is always on customer
Castrol oil & lubricants, and Solar power solution.
The man driving the Group’s activities and growth is the young acquisition and retention, by
and dynamic Basant Ghorawat, who originally hails from a
reputed business family in Guwahati, Assam. ensuring customer
His father Shri Laxmipat Ghorawat is engaged in the business convenience and satisfaction.
of Parle C&F in Guwahati, Silcher & Agartala and MPR Foods
in entire area of North East. The Group has witnessed Basant Ghorawat
steady growth & expansion,
thanks to Basant’s ability to streamline business operations

that drive growth, increase efficiency and bottomline. His flair

and competence in developing and implementing financial
controls & processes, coupled with his leadership,

communication & interpersonal skills have earned him the

goodwill and acclaim from his team of managers & other
employees, customers and business & social circles.

FADA Wishes Basant Ghorawat and the Oriental Group
All the Best.

July 2017 51

NADA Musings

Big Oil Just Woke Up to Threat of Rising Electric Car Demand

- OPEC quintupled forecast for battery powered cars in last year
- Oil majors and automakers diverge on outlook for EVs

The world’s biggest oil producers are starting to take electric Others making similar expectations as per BNEF note include:
vehicles seriously as a long-term threat. • The International Energy Agency more than doubled its
OPEC quintupled its forecast for sales of plug-in EVs, and oil
producers from Exxon Mobil Corp to BP Plc also revised up central forecast for EVs, raising its 2030 EV fleet size
their outlooks in the past year, according to a study by estimate to 58 million from 23 million.
Bloomberg New Energy Finance released recently. The • Exxon Mobil boosted its 2040 estimate to about 100
London-based researcher expects those cars to reduce oil million from 65 million.
demand 8 million barrels by 2040, more than the current • BP anticipates 100 million EVs on the road by 2035, a 40
combined production of Iran and Iraq. percent increase in its outlook compared with a year ago.
Growing popularity of EVs increases the risk that oil demand • Statoil ASA, the Norwegian state oil company, says EVs
will stagnate in the decades ahead, raising questions about will account for a 30 percent of new sales by 2030.
the more than $700 billion a year that’s flowing into fossil- Just a fraction of the world’s cars sold today are powered by
fuel industries. While the oil producers’ outlook isn’t nearly batteries instead of gasoline. Many analysts increasingly say
as aggressive as BNEF’s, the numbers indicate an acceleration the market will expand rapidly as almost all major auto makers
in the number of EVs likely to be in the global fleet. bring dozens of new EV models to market. OPEC said in its oil
“The number of EVs on the road will have major implications market report recently that electric vehicle sale targets could
for automakers, oil companies, electric utilities and others,” dampen demand in some parts of Asia as soon as 2018.
Colin McKerracher, head of advanced-transport analysis at Long-term growth depends on a wide range of factors,
BNEF in London, wrote in a note to clients. “There is significant including policy decisions by governments seeking to tackle
disagreement on how fast adoption will be, and views are air pollution to the cost of the lithium-ion batteries that
changing quickly.” account for about a third of the cost of each one.

Yet even as oil majors lift their outlook, they remain much
less optimistic than the automakers. The world’s top
automakers have a combined plan to sell 6 million EVs a year
by 2025, rising to 8 million in 2030, according to Bloomberg
New Energy Finance.

Some big companies plan to go all electric. Volvo AB expects
to have an electric motor in every car by 2019. It joins Elon
Musk’s Tesla Inc as a major EV maker and Geely Automobile
Holdings Ltd, the Hong Kong-based maker of London’s black
cabs, which is re-branding itself to focus on EVs.

BNEF expects electric cars to outsell gasoline and diesel models “What oil companies and car companies are saying is
by 2040, reflecting a rapid decline in the cost of lithium-ion diverging,” said McKerracher, the BNEF analyst. “This is a
battery units that store power for the vehicles. It expects 530 trillion dollar question, and somebody is going to be wrong.”
million plug-in cars on the road by 2040, a third of worldwide Global Automakers Call on China to Ease 'Impossible' Electric
total number of cars. Car Rules
The Organization of Petroleum Exporting Countries raised its Meanwhile, global automakers have urged China to delay and
2040 EV fleet prediction to 266 million from the 46 million it soften planned quotas for sales of electric and hybrid cars,
anticipated a year ago. Battery cars under the new projection saying its proposals will be impossible to meet and would
account for 12 percent of the market within 23 years, severely disrupt their businesses.
compared to 2 percent in the 2015 forecast. Based in Vienna, The June 18 letter addressed to the head of China's Ministry
the group representing 14 nations expects half the number of Industry and Information Technology, is the most cohesive
diesel vehicles as it did a year ago.

July 2017 52

NADA Musings

pushback yet from the industry against ambitious targets for "This will hit the industry pretty hard, especially well-known
so-called new energy vehicles in the world's biggest auto market. companies," said Liping Kang, senior manager at the
Keen to combat air pollution, China is planning to set goals Innovation Center for Energy and Transportation, a Beijing-
for electric and plug-in hybrid cars to make up at least a fifth based think tank.
of Chinese auto sales by 2025, with a staggered system of Although Chinese Premier Li Keqiang and German Chancellor
quotas beginning in 2018. Angela Merkel agreed in June that concessions would be made,
Beijing also sees the policy as a means to help the domestic the ministry later released draft regulations upholding the
car industry to compete with foreign rivals that have decades strict sales quotas.
more experience in internal combustion engines. "The proposed rules' ambitious enforcement date is not
The strict new rules plus planned harsh penalties for non- possible to meet," the letter from US, European, Japanese and
compliance, such as the cancellation of licenses to sell non- Korean auto industry bodies said.
electric cars in China, has the potential to cause much pain "At a minimum, the mandate needs to be delayed a year and
for some automakers in the market. include additional flexibilities."

Auto Imports from Mexico Keep Climbing despite Trump's Threats

- Mexico exported 1.16 million vehicles to the US in the first half of 2017, up 15.6 per cent from a year ago.
- 76.8 per cent of all cars and trucks shipped out of Mexico went to the US.

Almost six months after Donald Trump was sworn in as Not only that, the US has taken on a greater percentage of
President and threatened to penalize automakers who import the total number of vehicles exported from Mexico to markets
cars and trucks from Mexico, the flow of vehicles from south around the world. In Q1 of the year, 76.8 per cent of all cars
of the border has picked up momentum. and trucks shipped out of Mexico went to the US, that is up
New data from the Mexican Automobile Industry Association almost a full percentage point compared with a year ago.
shows the country exported 1.16 million vehicles to the US in In January, Trump tweeted, "The US has a $60 bn trade deficit
the first half of 2017, an increase of 15.6 per cent compared with Mexico. It has been one-sided deal from the beginning
with the same time frame in 2016. of NAFTA with massive numbers of jobs and companies lost."

Love for SUVs and Pickups Surge to Record High in US

A new study by HIS Markit finds that drivers who own an SUV returning to the market for an SUV or crossover already own
or crossover utility vehicle are very likely to buy another one. a utility vehicle, the loyalty rate is over 50 per cent of pickup
The loyalty rate is unusually high, above 60 per cent, the study buyers. It's the highest loyalty rate IHS Markit has ever
reveals. For pickups, the loyalty rate is over 50 per cent. registered for pickup trucks.
Once you drive an SUV, the odds are pretty good the next "We see these SUVs and crossovers all over the place, so many
vehicle you buy will be an SUV. buyers may be saying, 'Why don't we buy that instead of a
The study found that two-thirds of the owners of SUVs and car?'" he said.
CUVs (crossover utility vehicles), who bought another vehicle Increasingly, sedan owners are giving up on buying another
between January and April in the years since 2012 made the car. In fact, the 48.6 per cent loyalty rate for sedans is the first
next purchase an SUV or crossover. time more than half of the sedan buyers returning to the
"It is extremely rare to see a loyalty rate above 60 per cent, let market have decided not buy another sedan.
alone close to 70 per cent, which is what we have with SUVs "Cars are not going away, they are not dead," said Libby. "But
and crossovers right now," said Tom Libby, manager of cars have definitely lost their appeal to SUVs and crossovers."
automotive loyalty and industry analysis at IHS Markit. The shift in tastes for new vehicles is not surprising given the
The analysis of new vehicle registrations for the first four sales numbers for this year. According to the research firm
months of the year since 2012 shows steady and solid growth AutoData, car sales are down 11.4 per cent this year, while
in loyalty for SUVs and pickups. While 66 per cent of those SUV sales are up 7 per cent

53 July 2017





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