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August 2017 issue of FADA Journal

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Published by FADA Journal, 2017-08-26 01:36:31

FADA Journal - August 2017

August 2017 issue of FADA Journal

Office Bearers PRESIDENT’s MESSAGE contents

President 7 Confusion Abounds

JOHN K PAUL INDUSTRY TRACK 8 Pent-Up Demand Drives Vehicle Sales in July
Popular Vehicles & Services Pvt Ltd
Kuttukaran Centre, Mamangalam, Kochi - 682 025 INSIGHT 10 How Shared Mobility Will Change the Augmotive Industry
Tel: +91-484-234 1134 / 7872 / 5013 DECODING GST - McKinsey & Co.
E-mail: [email protected];
13 Queries on GST in FADA’s Whatsapp Groups
[email protected]
FUEL WATCH 20 Thank Finance for Sharp Oil Price Decline
Vice President - Steve Austin for OIL-PRICE.NET

ASHISH KALE 22OPINION Tyre Demand Growth Pegged at 7-8% for FY18 and FY19: ICRA
Provincial Automobile Co. Ltd
Kingsway, Near Railway Station, Nagpur - 440 001 COMPETITION LAW 25 Competition Law Updates - G R Bhatia
Tel: +91-712-391 1129 / 1150
E-mail: [email protected]; NEW ON WHEELS 26 • Yamaha Fazer 25 Launched
• Hyundai Launches ‘Next Gen Verna’ in India
[email protected]

Secretary General & Editor, FADA
Journal

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

ADVERTISERS’ INDEX UPGRADES & VARIANTS 30 • Mercedes-Benz Commemorates 70 Years of Indian Independence
with Launch of GLC 'Celebration Edition'
Back Cover
V E Commercial Vehicles • Suzuki Unveils Gixxer SF ABS at Rs. 95,499

Front Inside Cover 60 • Audi Drives in the Audi Q7 Design Edition
Tata Capital Financial Services • TVS Motor Introduces TVS Jupiter Classic Edition

352 KNOW OUR MEMBER Profile of Abhijit Auto Agency (I) Pvt Ltd, Guwahati

Back Inside Cover 59 NEWS BASKET 36 • Popular Nexa Sweeps Awards
Tata Motors • GST Council Recommends Increase in Cap on Cess on Motor
CONSUMER CASE STUDIES Vehicles from 15% to 25%
Inside Pages SALES REPORTS • Ashok Leyland Introduces Digital Market Place
• DetroitWantsTrumptoPushforWiderAdoptionofUSVehicleStandards
• Mahindra & Mahindra Financial Services 3 • Toyota Plans Truck, Possibly SUV Production in Mexico After
• Bagga Link 4 Trump Threat
• HPCL 6 & 33 • Shriram Automall Wins Best Service Provider of the Year Award
• Olympia Honda 12 • Honda 2W Inaugurates 4th Assembly Line at its Karnataka Plant
• Autobix 14 • Maruti Suzuki Revamps its True Value Pre-Owned Car Business
• AMPL 18 • Tractor Sales Heading Towards All-Time High: CRISIL Research
• Mahindra Truck & Buses 23 • China July Vehicle Sales Up 6.2 % Y-o-Y
• Prime Honda 24
• Maurya Motors 24 44 NCDRC : Cargo Motors (Gujarat) Pvt Ltd - Petitioner
• Action Construction Equipment 28 Versus
• United Group of Institutions 29 Consumer Education and Research Society & Ors - Respondents
• Kotak Mahindra Prime 32
• Talbros Panray 34 48 Vehicle Sales & Exports and Y-o-Y Growth - July 2017
• Shriram Transport Finance 38
• Marikar Group 46 NADA MUSINGS 56 Major developments affecting Automobile Industry in US
• Shriram Automall India 47
• Satyam Centre of Professional Excellence 50 Printed and Published by G K Ahuja on behalf of Federation of Automobile Dealers Associations,
• SKF Group 51 805, Surya Kiran, 19, Kasturba Gandhi Marg, New Delhi-110001.
• Manmachine Works 54 Printed at Sita Fine Arts P Ltd, A-22, Naraina Industrial Area, Phase-II, New Delhi-110028.
• KKE Auto Care 55 Editor: G K Ahuja
• Carazoo Online Solutions 58

For Advertisement query, please contact
Ankush Sethi at [email protected]



President’s Message

Confusion Abounds

Dear friends,
The much-awaited GST has become a reality effective from 1st July 2017.
A revolutionary and path-breaking step, heralding a new phase in India’s
tax regime, GST will, hopefully, go a long way in avoiding multiplicity of
taxes and cascading effect thereof in pre-GST era. However, there are
quite a few sore points and grey areas in the GST law, as it stands today,
which are causing confusion and concern among the members of business
community. The magnitude of confusion can be gauged from the fact
that FADA has been receiving loads of queries and issues on various aspects
of GST – be it the procedural aspects, conditions attached to various
provisions,, rates, classification and compliances – through the medium
of various Whatsapp Groups and otherwise.
While FADA has engaged GST experts to reply to the members’ queries
and taken up the concerns of automobile dealers with the appropriate
Government authorities, redressal mechanism of the Government is
working at snail’s pace. As a result, the apprehensions and worries
continue to grip the members of automobile retail trade.
It is but natural that a paradigm shift of staggering proportions, which GST has brought about, is likely to encounter teething
problems and hiccups. Addressing the issues and concerns, arising out of the implementation of GST, with a sense of urgency
is the need of the hour. Otherwise, it will have a severe adverse impact on business environment in the country.
Adverting to auto market, after the slowdown in sales in June due to rationalisation of inventories by OEMs at their ends and
at their dealerships before the advent of GST and expected reduction in vehicle prices post-GST, the July sales numbers are
reassuring.
As the dust around GST settles down, the auto market is expected to stay on course. The expectation is not unfounded, as the
inflation is sitting low and the interest rates remain benign. The long-awaited cut in Repo Rate by the RBI by 25 bps – though
too little and too late – is expected to give further impetus to the economic activity. The rain God has also been kind and
bountiful. The extent and coverage of monsoon rainfall in the country, barring few areas, has largely been good for the second
year in a row. With two-thirds of India’s 1.3 billion population relying on agriculture for their livelihood, it is good news for the
economy, in general and rural sector, in particular. The flipside is that the performance of services sector, as the latest data
indicate, is not something to rave about.
Regarding development in auto retail trade and activities of FADA since my previous column, I am happy to inform that FADA
has created 30 Statewise/citywise Whatsapp Groups that have become important medium for the sharing of information and
experiences amongst members of automobile dealer fraternity spread across the country. The chats within the Groups have
been quite helpful in addressing the queries and concerns relating to GST in particular. Through these Groups, members are in
the loop as to what is happening in the auto retail trade at the State and national levels. Members across the country are
constantly engaged with FADA and their fellow dealers across the State. What is heartening is that these Whatsapps Groups
have also promoted camaraderie and fellowship amongst the automobile dealers and united them never seen before.
You will be glad to know that programme of FADA’s 53rd Annual Session and AGM is being finalised. The programme will be
circulated to all members as and when finalized. All FADA members are cordially invited to attend FADA’s 53rd Annual Session
and AGM.
Kindly feel free to send your suggestions and inputs, if any, for further strengthening the activities of FADA and making them
more meaningful for the automobile dealers at large.
With best wishes,
Yours sincerely,

John K Paul

7 August 2017

Industry Track

Pent-Up Demand Drives Vehicle Sales in July

Auto market that witnessed depressed sales in June due to growth momentum on the strength of strong performance
expected fall in vehicle prices post-GST bounced back strongly by the Grand i10, Elite i20 and Creta.”
in July 2017 with all segments of the market, except 3- Homegrown UV major, Mahindra & Mahindra (M&M)
wheelers, witnessing healthy growth. Total domestic sales, reported domestic sales of 20,962 passenger vehicles,
across various segments of the automotive market, including including cars, utility vehicles and vans, in July 2017, witnessing
passenger vehicles, commercial vehicles and 2/3-wheelers, at a decent 20.8% increase over 17,356 passenger vehicles sold
2,078,313 units in July 2017, grew by 13.3% over 1,834,302 by the company in the domestic market in July 2016.
units in July 2016. The exports were also on growth trajectory, Rajan Wadhera, President, Automotive Sector, M&M,
rising by 3.9% y-o-y to 316,957 units during the month. commented, “We are happy with the overall performance in
July 2017. The benefit of a good monsoon, the successful
Passenger Vehicle sales driven by compact SUVs back rollout of GST and a good run up to the festive season, starting
on track from August, give us confidence of continuing a robust growth
in Q2.”
The passenger vehicles (PVs), riding on continuing robust Another Indian player, Tata Motors witnessed a modest
demand for SUVs, posted a healthy growth of 15.1% in growth of 6.6% in domestic sales of passenger vehicles (cars,
domestic sales that stood at 298,997 units in July 2017 vis-à- UVs and vans), which stood at 16,793 units in July 2017 (July
vis 259,720 units a year ago. The UV sub-segment, propelled 2016: 15,756 units). While the car sales in domestic market
by compact SUVs launched in the market of late, was the star slipped marginally by 0.7% to 12,125 units, the domestic sales
performer, clocking domestic sales of 86,874 units in July 2017, of Tata UVs saw a quantum jump of 109.9% at 2,808 units,
which reflected a handsome 35.5% increase over 64,105 units due to strong demand for Tata HEXA.
in July last year. Toyota Kirloskar Motor (TKM), which had seen depressed sale
Leading the charge, Maruti Suzuki India (MSI), the largest numbers in June, bounced back with sales of 17,758 units in
player in the Indian car market, saw an impressive 21.9% the domestic market during July 2017, registering a robust
upswing in domestic sales that added up to 153,298 units in growth of 43.2% over 12,404 units in the same month last
July 2017, compared to 125,764 units in July 2016. Importantly, year, thanks to a big price cut in UV prices on implementation
the company witnessed decent growth across all passenger of GST.
vehicle sub-segments – cars, utility vehicles and vans. Maruti “The Innova Crysta has seen impressive growth in July, with
Suzuki’s quartet of Gypsy, Ertiga, S-Cross and Vitara Brezza over 9,300 units sold. We are delighted that this month our
comprised in utility vehicles crossed the 25,000-unit sales- MPV leader has achieved the milestone of highest-ever sales
mark in a month for the first time, posting a mammoth 48.3% globally. The new Fortuner has also been a major contributor
growth with domestic sales volume of 25,781 units in July to overall growth with over 3,400 vehicles sold, which is the
2017 (July 2016: 17,382 units). The domestic sales of entry highest ever in India since the vehicle’s launch. However, the
level duo of the Alto and Wagon R at 42,310 units, were up customer demand for our strong hybrid product Camry Hybrid
20.7% y-o-y, indicating that these two popular hatchbacks are has seen a significant fall owing to the price hike as per
still force to reckon with. The company’s compact cars applicable tax under the GST framework,” N Raja, Director and
comprising the Swift, Ritz, Celerio, Ignis, Baleno and Dzire also Senior VP (Sales & Marketing), TKM commented.
came up with a solid performance, selling 63,116 units in the
Indian market, which translated into a growth of 25.3% (July
2016: 50,362 units).

Hyundai Motor India Ltd (HMIL), the Sales (Domestic + Exports) during July 2017 viz-a-viz July 2016
No. 2 carmaker in India, registered
domestic sales of 43,007 units in July
2017, up 4.4% (July 2016: 41,201
units).

Commenting on the numbers, Rakesh
Srivastava, Director (Sales and
Marketing), said: “Hyundai with a
growth of 14.5% month-on-month
and 4.4% year-on-year, continued its

August 2017 8

Industry Track

Ford India reported a decent 19.0% uptick in domestic sales With domestic two-wheeler sales volume at 66,135 units in
at 8,418 units in July 2017 (July 2016: 7,076) units. The July 2017, India Yamaha Motor witnessed a modest growth
company’s exports of passenger vehicles soared by hefty 65.5% of 1.4% y-o-y. Yamaha’s two-wheeler exports were, however,
y-o-y to 17,657 units during the month. in top gear, rising by 26.0% y-o-y to 15,972 units during the
Honda Cars India Ltd (HCIL) was in fast lane too, with its month.
domestic sales tally surging by 21.7% to 17,085 units in July Royal Enfield, continuing its dream run, saw domestic sales
2017 vis-a-vis 14,033 units a year ago. WR-V become Honda’s of its motorcycles grow by 21.2% to 63,157 units in July 2017
best-seller in India, driving past longstanding topper, Honda (July 2016: 52,128 units).
City. HCIL’s modelwise sales break-up for July read as follows: Likewise, Suzuki Motorcycle India was also on fast track, the
WR-V - 4,894 units; City - 4,854 units; Jazz - 2,971 units; Amaze company’s domestic sales of its two-wheelers soaring by a
- 2,913 units; BR-V - 1,042 units; Brio – 396 units; and CR-V - mammoth 78.8% y-o-y to 34,037 units in July 2017.
15 units. Among the major two-wheeler players in the Indian market,
Renault India and Nissan Motor India are running out of Bajaj Auto was the only company to have recorded a dip in
steam. While Renault India saw its domestic sales fall by 25.1% sales. The company’s domestic sales of two-wheelers at
y-o-y to 8,964 units in July 2017, Nissan Motor India’s domestic 164,915 units in July 2017 witnessed a 5.4% decline from
sales were down 32.1% y-o-y to 4,360 units during the month. 174,324 units a year ago. The two-wheeler exports of Bajaj
Auto were down 9.8% y-o-y to 100,267 units during the month.
Two-Wheelers stay on growth trajectory
Commercial vehicles stage recovery
Cheered by good monsoon rains, two-wheeler sales stayed
on course. Total domestic sales of two-wheelers across Recovering from the blow dealt in by the Supreme Court
companies, grew by 13.7% to 1,679,055 units in July 2017 from order on BS III vehicles and the pre-GST apprehensions,
1,476,332 units a year earlier. All two-wheeler majors, except commercial vehicles were back on growth path. Total
for Bajaj Auto, recorded decent growth in July. domestic sales of commercial vehicles at 59,000 units in July
Carrying forward the momentum of its highest-ever quarterly 2017 were up 13.8% y-o-y. While M&HCVs recovered to clock
sales in the first three months (April-June) of FY ‘18, Hero a modest growth of 6.7%, LCVs stayed on course, posting a
MotoCorp, the world’s largest two-wheeler manufacture for year-on-year increase of 18.7% in domestic sales during the
16 consecutive years, commenced the second quarter of the month. The reduction in vehicle prices in the wake of GST
fiscal with a robust six-lakh plus sales for the month of July, implementation also helped boost the sales numbers.
despite sluggish sales for the first few days of the month due The leader in CV market, Tata Motors witnessed a 17.9% uptick
to the transition to GST. in domestic sales of its commercial vehicles, which stood at
Hero MotoCorp sold 611,307 units of two-wheelers in the 25,982 units in July 2017 vis-à-vis 22,033 units in the same
Indian market during July 2017, registering a healthy growth month last year, due to ramp-up of production of BS IV
of 17.4% over the corresponding sales volume of 520,559 two- compliant vehicles.
wheelers a year ago. The company’s two-wheeler exports Rival, Ashok Leyland registered a 13.5% uptick in domestic
increased by 3.5% y-o-y to 11,962 units during the month. sales, which added up to 10,524 units in July 2017, as against
The July was the third consecutive month of six-lakh plus sales 9,269 units a year ago.
for the market leader in this fiscal, having clocked 624,185 Mahindra & Mahindra (M&M) posted a 14.1% growth in
units in June and 633,884 units in May. domestic commercial vehicles sales at 15,027 units in July 2017
Honda Motorcycle and Scooter India (HMSI) was also in over vis-à-vis 13,168 units in July 2016.
drive. The company saw a healthy 19.2% surge in domestic Volvo-Eicher Commercial Vehicles (VECVs) clocked 3,714 units
sales of its two-wheelers, which aggregated 511,960 units in in domestic sales of Eicher branded CVs, posting a paltry 1.4%
July 2017 Vs 429,551 units in July 2016. HMSI’s exports also growth year-on-year.
clocked a staggering 33.8% growth to 32,569 units in July from While vehicle sales have been encountering bumps from time
24,333 units a year ago. time, the mood remains upbeat. With monsoon rains shaping
TVS Motor Company reported total two-wheeler sales of up true to the forecast, bringing cheers to the economy and
219,396 units in the Indian market during July 2017, witnessing GST taking root gradually, auto market is headed for brighter
a 6.2% uptick, compared to 206,605 units in July last year. The days ahead
company’s two-wheeler exports at 43,940 units were up 33.0%
year-on-year.

9 August 2017

Insight

How Shared Mobility Will Change the Automotive Industry?

McKinsey & Co.

While sharing cars likely means slower growth of vehicle sales, Sizing the shared-mobility market
it also suggests strong new opportunities for automakers, In three core regions—China, Europe, and the United States—
suppliers, and many more mobility players. the shared-mobility market was nearly $54 billion in 2016,
The increasing popularity of shared mobility will slow global and it should continue to experience impressive annual growth
vehicle sales but not reverse them. Although there likely will rates in the future. Under the most positive scenario, which
be fewer new vehicles on the road because of sharing, car involves strong customer demand for self-driving taxis or
sales in developing countries will outpace shared mobility’s shuttles (so-called robo-taxis or shuttles), in low-density
impact over the next 15 years. Still, through 2030, roughly a locations and in cities that take steps to enable them, the
third of the expected increase in vehicle sales from market could see 28 per cent annual growth from 2015 to
urbanization and macroeconomic growth likely will not 2030. Even the least aggressive scenario points to steady
happen because of shared mobility (Exhibit 1). Nonetheless, growth based on convenience and economics; it projects 15
the shared-mobility story isn’t all bad for the industry, per cent annual expansion, even if customers do not readily
especially if automakers, suppliers, and the other mobility adopt robo-taxis and cities do not support them.
players take steps now to position themselves for it. Currently, China and the United States are the two largest
markets for shared mobility, at $24 billion and $23 billion,
respectively. Both markets are dominated by e-hailing players,
which hold market shares that exceed 80 per cent in each
country. Europe’s market, on the other hand, is much smaller,
at just under $6 billion, and leans toward car sharing with a
more fragmented landscape (cities regulate sharing
individually, and the business is more asset intensive).

Vehicle sales will outpace the impact of shared mobility One insight that’s already apparent from the industry is the
primarily because of strong expected growth in Asia and the lack of a one-size-fits-all mobility model. That means
high replacement frequency of shared vehicles due to their participants need to conduct market segmentations at the city
high utilization. Research also suggests that shared mobility level. Berlin, for example, runs on convenient car sharing, with
will only partially replace car ownership. A 2017 McKinsey multiple players and limited e-hailing opportunities because
survey reveals that 67 per cent of all US respondents prefer of taxi-related regulation. Meanwhile, Beijing, a mid-income,
driving their own cars over using ride-hailing apps, and 63 densely populated city, has a shared-mobility market of more
per cent aren’t interested in trading their vehicles for shared- than $700 million. Focused mainly on a strong e-hailing
mobility rides—even if they’re free.
While the shared-mobility industry remains embryonic, its new
players are already over-taking some much larger automakers
with respect to market valuations, suggesting strong investor
support.

August 2017 10

Insight

platform, Beijing is a winner-takes-most market where one passengers who are basically strangers, while a solo ride-share
company controls nearly the entire market. commute may be too expensive for most people to use daily.
McKinsey’s 2017 consumer survey indicates shared mobility Purpose-built vehicles offer one solution to current issues,
should see further growth (Exhibit 2). Of those currently using especially those concerning cost (Exhibit 3). For instance, in
non-taxi ride-hailing services, 63 per cent expect to increase the United States, a typical vehicle might cost nearly $24,000
their usage “a lot” in the next two years, and even more (67 because it represents a compromise developed to appeal to
per cent) say they will do the same concerning car sharing. the broadest spectrum of consumers in target segments. A
While those who use shared mobility clearly expect to use it purpose-built vehicle, on the other hand, could feature lower
much more in the future, it still only accounts for a small levels of complexity; less powerful engines; simpler, easier-
fraction of total vehicle miles travelled. In fact, today, shared to-clean interiors; less complicated assembly processes; and
mobility makes up about one per centage point of the 30 per lower distribution costs. Such a car could cost almost 25 per
cent of annual vehicle miles travelled that it could currently cent less than a typical vehicle.
address. Limitations include the lack of availability of these However, the real game changer is likely to be autonomous
solutions in rural settings, and sharing tends not to favour vehicles. Take the current limits on shared mobility imposed
frequent commuting due to its cost and the availability of less by population size and density. Today, car sharing is rarely
expensive options such as carpooling. It’s also less attractive economically viable in cities with fewer than half a million
for running errands or multi-stop shopping trips. Shared- inhabitants. Self-driving cars would enable mobility players
mobility solutions do, however, make sense for travelling to to reposition vehicles optimally, allowing smaller fleets to
social events in urban areas. provide adequate coverage and reducing the fixed cost base.
Changing the mobility game Autonomy would also let companies target different user
Further growth in shared mobility will depend on how segments via smaller differentiated fleets of vehicles. Vehicle
effectively the industry eliminates existing customer pain self-parking capabilities could reduce inner-city congestion (for
points. For example, some uses such as shared-mobility vehicle instance, by self-parking in less densely populated areas).
pooling can create uncomfortable dynamics among These inherent benefits could make car sharing more
acceptable to local governments and would likely also increase
customer use of the service.
Eliminating the cost for the driver is the unique benefit offered
by autonomous vehicles. Roughly 45 per cent of the costs of
operating an e-hailing vehicle relate to the driver; taking him
or her out the equation offers early adopters a huge
competitive advantage.
Evolving or transforming completely?
We see two different paths for the future of shared mobility:
the industry could grow steadily in its current state through
2030, or it may become an entirely different market. In our
view, three drivers will decide which scenario becomes reality:
customer preferences, regulation, and technology.
The status quo path would likely involve steady growth based
on convenience and economics, as industry players offer cost-
efficient alternatives to taxis and public transportation. The
transformative path could see rapid acceleration with the
introduction of autonomous vehicles and supportive city
initiatives, enabling companies to offer new options for user
experience and monetization based on purpose-built vehicles.
While today’s market valuations might suggest otherwise, it
remains unclear that the industry’s two leaders will ultimately
dominate in a winner-takes-all market. The transformative
path could disrupt the current shared-mobility business model

11 August 2017

Insight

if cities regulate self-driving taxis as they do public • Take advantage of product testing and data opportunities
transportation, if automakers and others operate autonomous (both paths). Provide components for fleet vehicles and
vehicle fleets, and if small fleets of self-driving cars prevail. employ shared mobility to test technologies and
Automakers attempting to position themselves for the future components and gain access to customer data, where
must determine how to benefit from a market that could take legally permissible.
these two alternate paths. The following strategic options
might be relevant to either pathway, or to both: • Become an expert (transformative path). Be the first to
• Prepare for purpose-built vehicles (transformative path). develop components for purpose-built vehicles, or build
capabilities and become a thought leader in component
Strive to be the first to develop purpose-built vehicles, design for shared-mobility vehicles.
and cooperate with providers of shared-mobility
platforms to scale up quickly and gain market share. • Become a fleet operator (transformative path). Build or
• Use shared mobility as an indirect channel (either path). strengthen relationships with leading original-equipment
Use shared mobility to ensure fleet emission compliance manufacturers (OEMs) to cooperate on (or initiate
(via electric vehicles), test new technologies or designs, dialogues regarding) purpose-built vehicles.
and gain access to customer data.
• Become a platform player (status quo path). Find ways Global OEMs and suppliers should prepare themselves for both
to access the platform business, and develop strategies paths, since the shared-mobility market is likely to grow at
to attract a customer base. different speeds and take different forms in various regions.
• Become a fleet operator (transformative path). Develop This is also true for many other mobility players beyond the
relationships with key cities and invest in capability building. traditional automotive industry.
Automotive-component suppliers can also take steps to
prepare for shared mobility opportunities. Suggestions include As shared mobility continues to gain momentum, OEMs and
the following: their suppliers need to understand what’s driving its popularity,
which will vary from country to country and city to city. While
shared mobility will probably inhibit new vehicle sales to an
extent, automotive players can nonetheless position
themselves to benefit from its ultimate success

August 2017 12

Decoding GST

Queries on GST in FADA’s Whatsapp Groups

Queries relating to GST received through various Statewise IV. In case the tax payable as per the return in FORM GSTR-
Whatsapp Groups constituted by FADA have been clarified 3B is greater than the cash amount deposited as per (ii)
by the GST expert – CA Dr Sanjiv Agarwal and shared within above, deposit the balance in cash along with interest
the Groups. Some of the queries and answers thereto are @18% calculated from 26.08.2017 till the date of such
published hereinbelow for the information of FADA Members deposit. This amount will also get credited to electronic
cash ledger;
Query: Which returns are to be filed in GST for the month of
July and August 2017 ? V. File the return in FORM GSTR-3B on or before 28.08.2017
after discharging the tax liability by debiting the electronic
Central Board of Excise and Customs (CBEC) vide Notification credit or cash ledger.
Nos. 18/2017, 19/2017, 20/2017, 21/2017, 23/2017 & 24/2017
- Central Tax, has relaxed / extended the due dates and time Query: What are the details to be filed in GSTR-3B ?
frame for filing GST returns for the initial two months of GST Details to be provided in GSTR-3B are as follows:
regime i.e., July, 2017 & August 2017. As a result, the GST • Basic Information;
payable will be required to be paid on the basis of Form GSTR- • Details of Outward Supplies and inward supplies liable to
3B. Form GSTR-3B for July 2017 will be filed by 25.08.2017
and for August, 2017 by 20.09.2017. However, the invoice wise reverse charge;
details to be furnished as per GST rules in GSTR-1, GSTR-2 and • Details of inter-State supplies made to unregistered
GSTR-3 shall be filed later as per following schedule:
persons, composition taxable persons and UIN holders;
Return Form Period/Due Date Period/Due Date • Details of Eligible and Ineligible ITC;
for July 2017 return for August 2017 return • Value of exempt, nil-rated and non-GST inward supplies;
• Detail of Payment of Tax;
GSTR-3B 25.08.2017 20.09.2017 • Details of TDS / TCS credit.
Query: What are the consequences of not filing GSTR-3B?
GSTR-1 01.09.2017 to 16.09.2017 to
05.09.2017 20.09.2017 No late fees and penalty may be levied for the interim period
as clarified in CBEC Press release dated 18.06.2017. However,
GSTR-2 06.09.2017 to 21.09.2017 to there is no notifification in support thereof.
10.09.2017 25.09.2017
Query: Is there any implication of GST on the advance
GSTR-3 11.09.2017 to 26.09.2017 to booking amount standing in books of accounts as on 1 July
15.09.2017 30.09.2017 2017?

Further, according to Notification No. 23/2017 - Central Tax As per section 142(11)(b) of CGST Act, no tax shall be payable
dated 17th August 2017 and Notification No. 24/2017 - Central on services under this Act to the extent the tax was leviable
Tax dated 21st August 2017, registered persons planning to on the said services under Chapter V of the Finance Act, 1994.
avail transitional credit for discharging the tax liability for
the month of July 2017 need to follow the steps as detailed Advances received in pre GST regime would have suffered
below: Service Tax at the time of receipt of such advances, if
I. Calculate the tax payable as per the following formula: applicable. Therefore, GST may not be applicable on such
advances standing on 1st July 2017 in the books. It may be
Tax payable = (Output tax liability + Tax payable under noted that there was no tax on advance for goods earlier.
reverse charge) – (transitional credit + input tax credit
availed for the month of July 2017); Query: Whether the bookings which have been made after
II. Tax payable as per (i) above to be deposited in cash on or 1 July 2017 will attract GST?
before 25.08.2017, which will get credited to electronic
cash ledger; As per section 142(10) of CGST Act, save as otherwise provided
III. File FORM GST TRAN-1 (which will be available on the under this chapter, the goods or services or both supplied on
common portal from 21.08.2017) before filing the return or after the appointed day in pursuance of a contract entered
in FORM GSTR-3B;

13 August 2017



Decoding GST

into prior to the appointed day shall be liable to tax under the According to section 16(3) of CGST Act, where the registered
provisions of this Act. person has claimed depreciation on the tax component of the
Therefore, advances received prior to appointed date will be cost of capital goods and plant and machinery under the
covered by section 142(11)(b) as discussed in above query. provisions of the Income-tax Act, 1961, the input tax credit
Further, advances received after the appointed day (i.e. 1st July on the said tax component shall not be allowed, i.e., one can
2017) for goods or services supplied after such date shall not claim input tax credit and depreciation, both on the same
attract GST. Thus, for the first time, booking advance shall also amount.
be liable to GST. Therefore, a car dealer may claim ITC for both capital goods
Query: What GST Rate to be charged on Annual Maintenance as well as trading stock provided the same are used for
Contract (say, for car maintenance post sales)? business purpose. However, ITC is not available in case of
As per section 2(30), “composite supply” means a supply made motor vehicles, including demo vehicles, u/s 17(5).
by a taxable person to a recipient consisting of two or more Query: Can input credit be taken on demo cars / motor
taxable supplies of goods or services or both, or any vehicles used for mobile services etc. even if same falls under
combination thereof, which are naturally bundled and capital goods? Is there any restriction on taking credit on
supplied in conjunction with each other in the ordinary course such vehicles?
of business, one of which is a principal supply; According to Section 17(5) of CGST Act, input tax credit shall
The rate of GST shall be the rate applicable on the principal not be available in respect of the following, namely:-
supply. (a) Motor vehicles and other conveyances except when they
As per section 2(74) “mixed supply” means two or more
individual supplies of goods or services, or any combination are used –
thereof, made in conjunction with each other by a taxable (i) For making the following taxable supplies, namely:-
person for a single price where such supply does not constitute
a composite supply. (A) Further supply of such vehicles or conveyances;
In mixed supply, a mixed supply comprising two or more or
supplies shall be treated as supply of that item, which has the
highest rate of tax. (B) Transportation of passengers; or
Supply of car maintenance services involves supply of goods (C) Imparting training on driving, flying, navigating
along with services appears to be naturally bundled and
supplied in conjunction with each other. such vehicles or conveyances.
Therefore, the above services may be covered under (ii) For transportation of goods.
composite supplies and the principal supply being Repairs and Therefore, input tax credit may not be taken on demo cars /
Maintenance of car, the rate of GST will be of repairs and motor vehicles used for mobile services, as the same is
maintenance services i.e. 18%. specifically excluded under section 17(5) ibid.
Query: Demo cars are an asset for the company after getting Query: In the case of extended warranty, kindly clarify
registered in the name of the company, so it should be whether billing has to be done on actual labour charges or
considered as Capital Goods. For Cars (demo Cars) not on material cost also?
registered and transferred to the trading stock, can company According to section 15(1) of CGST Act, the value of a supply
claim input tax credit? of goods or services or both shall be the transaction value,
According to section 16(1) of CGST Act, every registered person which is the price actually paid or payable for the said supply
shall, subject to such conditions and restrictions, as may be of goods or services or both where the supplier and the
prescribed, be entitled to take credit of input tax charged on recipient of the supply are not related and the price is the
any supply of goods or services or both to him, which are sole consideration for the supply.
used or intended to be used in the course or furtherance of Section 15(2) specifies the items, which shall be included in
his business. the value of supply. Section 15(3) specifies that discounts given
shall be excluded from the value of supply.
Therefore, the value of supply shall be the transaction value
actually payable for such supplies, which shall include value
of both goods as well as services supplied.

15 August 2017

Decoding GST

Query: What are the tax implications if free insurance or per cent on such goods, which attract central tax at the
accessories are given to the customer? rate of nine per cent or more.
Input tax Credit of free samples will not be available in view • Forty per cent for other goods of the central tax applicable
of clause (h) of section 17(5) of CGST Act. Therefore, value of on supply of such goods after the appointed date and
freebies will become part of your cost and GST needs to be shall be credited after the central tax payable on such
paid on actual cost of the accessories/insurance at the time supply has been paid.
of purchase. • Provided that where integrated tax is paid on such goods,
Query: Whether handling charges, charged to customer the amount of credit shall be allowed at the rate of thirty
through a separate debit note would attract GST at 18% or per cent and twenty per cent, respectively, of the said tax.
the rate of original product, i.e., car sale rate say 43%? Query: Whether local body taxes will be subsumed in GST?
According to Section 34(3) of CGST Act, where a tax invoice No, all local body taxes have not been subsumed in GST.
has been issued for supply of any goods or services or both However, states like Maharashtra have agreed to subsume
and the taxable value or tax charged in that tax invoice is found entertainment tax and octroi, which was being levied by local
to be less than the taxable value or tax payable in respect of bodies of that state at the rate of 14.5 per cent.
such supply, the registered person, who has supplied such Query: When vehicle is sold to the customer, the registration
goods or services or both, shall issue to the recipient a debit and insurance of the vehicle is generally done by the
note containing such particulars as may be prescribed. company in the name of the customer. Whether GST has to
Where a debit note is issued, it must have been issued where be paid on registration and insurance charges under RCM?
taxable value or tax charged is less than what was needed to As per section 15 of CGST Act, transaction value includes
be charged; therefore, rate of original product i.e. car sale incidental expenses, including commission and packing,
rate would be applicable in this case. charged by the supplier to the recipient of a supply and any
Query: Please advise on percentage of input availed on stock amount charged for anything done by the supplier in respect
in hand on 30.06.2017 in case of the following situations: of the supply of goods or services or both at the time of, or
Case 1: before delivery of goods or supply of services. These expenses
a) Goods were purchased after 01.07.2016 can be considered as reimbursement of expenses, if incurred
b) Invoices are available as a pure agent.
c) Goods used to make taxable GST supplies Query: Dealers generally collect exact/exempt amount
According to section 140(1) of CGST Act, a registered person, payable to insurance company from customer and there is
other than a person opting to pay tax under section 10, shall no margin collected. Whether GST will be levied on insurance
be entitled to take, in his electronic credit ledger, the amount amount?
of CENVAT credit carried forward in the return relating to the According to CGST Rules, “pure agent” means a person who-
period ending with the day immediately preceding the (a) enters into a contractual agreement with the recipient of
appointed day (01.07.2017), furnished by him under the supply to act as his pure agent to incur expenditure or
existing law in such manner as may be prescribed. costs in the course of supply of goods or services or both;
Therefore, input tax credit for purchases made on or after (b) neither intends to hold nor holds any title to the goods
01.07.2016 will be available provided the same has been or services or both so procured or supplied as pure agent
carried forward in returns and proper duty paying documents of the recipient of supply;
are available. (c) does not use for his own interest such goods or services
Case 2: so procured; and
a) Goods were purchased after 01.07.2016 (d) receives only the actual amount incurred to procure such
b) Invoices not available goods or services in addition to the amount received for
c) Goods used to make taxable GST supplies supply he provides on his own account.
According to Rule 117(4) of CGST Rules, Registration and insurance services are supplied by the
• The input tax credit shall be allowed at the rate of sixty company to customers as a pure agent. Therefore, as per
determination of value rules in case of pure agent, the

August 2017 16

Decoding GST

expenditure incurred by supplier as a pure agent of the According to Section 7(1) of IGST Act, subject to the provisions
recipient of supply shall be excluded from the value of supply. of section 10, supply of goods, where the location of the
Therefore, GST may not be applicable on such charges supplier and the place of supply are in - (a) two different States;
recovered from customer. (b) two different Union territories; or (c) a State and a Union
territory, shall be treated as a supply of goods in the course of
Query: Where registration fee is collected along with some inter-State trade or commerce
margin, whether GST be applicable on such margin amount According to Section 8(1) of IGST Act, subject to the provisions
only or on total value including Government fees? of section 10, supply of goods where the location of the supplier
GST may be applicable on the gross amount including and the place of supply of goods are in the same State or
Government fees as per section 15 of CGST Act , 2017. same Union territory shall be treated as intra-State supply.
Therefore, IGST may be applicable in case vehicle is coming
Query: Whether GST will be applicable on stock transfer from other states and CGST plus SGST may be levied in case
within the state ? vehicle is coming from Kolkata.
No, GST shall not be applicable if the transactions are under Query: Whether the accident repair bills should be in the
same GSTIN number within the State. name of the customer or in the name of the insurance
Company who settles the claim?
Query: Whether road tax is to be included in transaction It will be depend upon the nature of agreement and parties
value for the leviability of GST ? to the agreement. Normally, repairs bills should be in the name
According to Section 15(2) of CGST Act, the value of supply of customer only. It may vary in case of cashless insurance.
shall include any taxes, duties, cesses, fees and charges levied Query: What will be the taxability of second hand goods
under any law for the time being in force other than CGST (vehicles) in case of intra-state supply from unregistered
Act, the State Goods and Services Tax Act, the Union Territory person?
Goods and Services Tax Act and the Goods and Services Tax Intra-state supply of second hand goods from unregistered
(Compensation to States) Act, if charged separately by the person to registered person, dealing in buying and selling of
supplier. second hand goods and who pays the goods and services tax
compensation cess on the value of outward supply of such
Therefore, GST will be levied on the amount including road second hand goods shall be exempt from levy of GST vide
tax as per section 15 of CGST Act, 2017. Notification No. 10/2017-CT (Rate) dated 28.06.2017.
Query: In case of intra-state supply, made by unregistered
Query: If Dealer ABC invoices a demo car to ABC (i.e., to own person to registered person , will GST Compensation Cess
dealership) in order to convert the sale or capitalization of be levied ?
the car as a demo car, will GST be leviable on the transaction? Intra-state supply of second hand goods (including vehicles)
Self supplies are not taxable under GST. If dealer ABC invoices by an unregistered person to registered person, dealing in
for the demo car, then GST may not be applicable on the same. buying and selling of second hand goods and who pays the
goods and services tax compensation cess on the value of
If the supply is between two distinct entities (i.e., having 2 outward supply of such second hand goods, shall not attract
separate GSTIN number), then GST may be applicable on that Compensation Cess vide Notification No. 4/2017- CC (Rate)
transaction. dated 20.07.2017
Query: Vehicles for repair service may come from within the
State as well as from other states as well. Where the supply
of material and services is provided in workshop located in,
say Kolkata, whether IGST will be applicable or CGST and
SGST be applicable?

Note: These question-answers are published for education purpose only and are not to be quoted or used as legal opinion,
which may vary based on actual context, legal position at that time and fact on case-to-case basis. Contact professional
advisors for your business specific queries. It is advisable for the automobile dealers to join 1-month GST course being

conducted by GSTStreet.com, in association with FADA, for education/guidance on various aspects of GST through digital
medium. This online training course, led by Dr Sanjiv Agarwal, is customized to the needs of Automobile Dealerships in
creating familiarity with the new & evolving GST law in India. For further information and registration for the course, you
may visit www.fada.in and www.gststreetmall.com

17 August 2017



Attention: Members

Engagement of GST/Service Tax Consultant

A GST/service tax consultant – Ms Puloma Dalal, FCA based in Mumbai, has been engaged by FADA on retainership to
help members deal with the complexities of GST/service tax law and procedures. She will, on reference made by FADA,
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FADA will forward the queries raised by members to Ms Puloma Dalal for her opinion.

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

Members seeking clarification or legal position relating to GST/service tax as relevant to automobile dealers, may send
their queries to FADA office at 804-805, Surya Kiran, 19, K G Marg, New Delhi (E-mail Id: [email protected]).

The service is offerred to FADA Members free of charge.

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19 August 2017

Fuel Watch

Thank Finance for Sharp Oil Price Decline

Steve Austin for OIL-PRICE.NET

Already, crude oil prices are down by well more than 18% percent of the world's proven reserves. Now, the extraction
compared to early 2017. Oil production has risen in countries of these reserves is another ballgame, altogether.
like Libya and Nigeria. Quite naturally, with above 'target' Oil reserves are defined as "the amount of oil that can
production in Saudi Arabia too, oil supply rose by 720,000 technically and economically be recovered", as opposed to
barrels a day across the world including 340,000 barrels a day "oil resources" which denotes the quantity of oil in the ground,
in OPEC countries this June. Global stockpiles remain on the regardless of market conditions. So, when you read decline in
high, which makes it easier to reason out the tepid oil prices, oil reserves, it doesn't mean that oil evaporates with the
we'd say. However, what's the reason for the persistent downward spiral of prices. Instead, it's just that oil, still in the
downward trend of recent months? Often times, lower oil ground, has become economically unviable to extract when
prices (always welcome by consumers) are credited with oil prices plunge. And, take a look at the oil price lagging below
advances in technology. As it turns out, advances in market $50 a barrel. Now, why would anyone finance something
efficiencies on the finance side are responsible for the recent providing such meager returns?
decline of oil prices below $50. Well, today it looks like some of that oil can kiss financing
Big picture goodbye.
Up until a few years ago, the world was relying on some very Money leaves long-term projects
large oil fields for most of its oil supply. Drill in; pump out, as The fact is that because of oil price volatility, the investment
the saying goes. Most of the largest producing conventional world is shying from large funds needed in ambitious projects
oil fields still in use today are in the Middle-East, under the in favour of more modest fracked wells with a near-immediate
control of OPEC-aligned countries. production and favourable ROI. One, fracking, the technology
Oil was extracted from these fields using "conventional whereby oil is extracted from shale, has changed the energy
technologies". From a technical standpoint, all conventional landscape of the US. As per our previous article, it has enabled
fields behave in similar fashion and have a similar depletion oil production to ramp up by 10% since mid-2016 to 9.34
rate. In addition, it takes huge investments (sometimes in the million barrels a day. Astonishing considering that fracking
billions) to discover and prospect such conventional fields but contributed less than 2% to US oil production in 2000.
the bonanza payouts are usually well worth it - especially when Secondly, addition of drilling rigs has seen a 24 week of
oil prices were hovering in the hundred. If you ask, that's increase with total rig count standing at 763, the highest we've
because some wells contain billions of barrels of crude oil as seen since April 2015. With the road still long and unchartered,
reserves. Of course, not all of the reserves can be extracted. this is just the tip of the iceberg in the history of shale.
That's why oil experts come up with 'potential estimates' while With strong basics, all signs point to the assumption that oil
making assessment of wells out of economic necessity. It's production will continue to surge in the US. US crude exports
these 'proven' oil reserves, in tandem with oil prices, are estimated to touch 2.25 million barrels a day in 2020, which
companies work with, as heavily invested projects often take will put the US alongside Kuwait and UAE. That is, the production
decades to give returns. is all set to grow four times the 2016 levels. As of now, US
Remember we are dealing with variables here, a hugely exports about 500,000 barrels of oil a day and rising. And the
expensive 'variable' at that. Oil companies spend a lot, in terms proceeds are usually re-invested or paid out as dividends to
of money, manpower, time and energy to receive a future investors - in any case turned into something productive, not
lucrative profit. Put in two penny, take out five. It was rather taxed out to sustain Middle-Easter welfare theocracies. So,
simple, when you put it so. "Was" is the key here, however. you will understand how, by contrast, the economic model of
All of this was only possible provided investors were willing to Gulf conventional oil resources seems a tad riskier.
bet large funds on the positive outcome of oil exploration in Well, it makes economic sense for investors to divert funds
some less than friendly part of the world. And we know how from Middle-East exploration to US shores and other regions
sustainable that is. with an eye on the -better- long term outlook. That they are
In other terms, there are parts of the world with lots of oil in doing it is something to be taken into account. In fact, this
the ground and what gets it out of the ground is financing. includes not only US and western investors, but also Middle
Without financing it will just sit there. For example, Saudi Eastern and Saudi investors.
Arabia has proven reserves of about 265 billion barrels or 22

August 2017 20

Fuel Watch

US, for good measure, has strengthened infrastructure with Investors shy Gulf state oil projects
regard to energy projects. It seems another age when crude Nasser, the CEO of state owned Oil Company, Saudi Aramco's
oil export was banned in the US. Drifting across the pipelines, statement that the lack of investments in conventional oil fields
shale oil has brought a seismic shift to how we view energy in was caused by unconventional oil and gas (read shale) in the
the US. Shale explains the increased oil production. market reeks of the pot calling the kettle black. Further, these
Why wouldn't the investors, savvy as they are, sniff up the statements are not helping his company's IPO set for 2018,
opportunity out for grabs? After all, it's common knowledge which could use more help to lure investors. Also, the 85% tax
that smaller incremental investments help hedge risks. Thus, rate to which the state-owned oil company is subjected in
the flood of new money into projects with immediate results Saudi Arabia is a tough sale by all parametres.
has resulted in a renewed oversupply of fresh oil from the US. In fact, the IPO of trillion-dollar company touted as "the biggest
This is why prices declined so significantly. in history" could not have come at a worst time, given how
US wins, Middle East loses the Kingdom has in short order managed to lose control of
While US scores with increased rig count and production, the OPEC. To cut the story short, it was the master plan of Saudi
oil industry in the Middle-East is festering with under Arabia that forced OPEC to overreact in cutting oil production
investment. Said to be in trillions, the lack of investment could to boost oil prices that eventually culminated in Saudi Arabia
boomerang as supply deficit within a decade. Let's not forget losing market share and clout in OPEC. Lately, Saudi Arabia
that oil exploration is a long term development in which a has even turned against its long-standing ally Qatar too,
decade is but short. Why are the investors moving away? prompting Qatar to retaliate with damaging revelations on
Quite simply western investors are unwilling to invest in the the Saudis' role in funding terrorism in Syria. Not stopping
Middle East, a region they increasingly consider an "economic there, the Kingdom is running through its cash reserves while
basket case" with a bleak future. Lack of (major) new signing 100$ billion in US arms deals. Some calculation.
discoveries, profusion of mature wells, political uncertainties Investors are dubious about a lot of things when it comes to
are but some of the reasons. the IPO. Many analysts doubt whether the IPO is worth the
In a smart move, Saudis themselves have been heavily touted $2 trillion. Revenue from Aramco contributes to the
investing in US energy assets rather than developing their own operating budget of the Kingdom; so investors would be wary
resources. ExxonMobil and Saudi Basic Industries (SABIC) are of the political ramifications. Aramco's claim to 260 billion
all set to build a petrochemical project on US Gulf coast. The barrel of recoverable oil being one of them. But that's not the
multibillion dollar investment deal includes an Ethane steam biggest reason: Saudi investors are also leaving Saudi Arabia
cracker weighing 1.8 million tonnes and derivative units. to invest in the US petroleum industry instead. This really gives
The Blackstone Group's investment is another significant deal. Saudi Aramco the allure of a sinking ship.
Saudi Arabia has committed $20 billion to a Fund created by The world's biggest crude exporter is conceding ground to
the Group, Blackstone infrastructure fund. Point to be noted enact a steep oil production cut in order to prop up the low
is that the fund's primary investment is in the United States. global price of oil, causing the Kingdom to rapidly lose market
Safe to say, the Saudis know where to invest in when their share and influence over other OPEC members.
domestic market is less than favourable. Back to the question of how Middle-East can tide the loss, it's
How is Saudi Arabia viewing all this? The CEO of Saudi Aramco, about going back to the basics. Now that cash is hard on the
Amin Nasser predicts an oil shortage, as fall in investment pocket, the industry has to rethink, grasp and opt for better
doesn't make up for depletion. Already, most of the Middle planning and technology to increase efficiency in each project.
Eastern countries are relying on their sovereign wealth funds Conclusion
to tide over the public deficit caused by low oil prices and loss Obviously, it's financing that gets oil out of the ground. When
of oil revenues. Indeed, OPEC cut production earlier this year investment dries up, the pump getting oil out of the ground
to take on the challenges put up by shale oil. However, with a gets put away. With sluggish oil prices what we have in hand
terrible aftertaste, the move proved futile. Now, OPEC are wary and over-cautious speculators. Who gets the cake?
acknowledges demand for its oil to fall by 60,000 barrels a As it is, right now, the big money is betting on US fracking
day this year because of shale. Oil, the lifeline of the Middle- instead conventional exploration in Gulf States, and that
East, is dealing with existential problems. includes Middle Eastern investors. Since Gulf projects will not
The US is winning but can Gulf states stem the loss? be renewed at a sustainable rate, these are long terms changes
that are reshaping the industry for good

21 August 2017

Opinion

Tyre Demand Growth Pegged at 7-8% for FY2018 and FY2019: ICRA

Profit margins to fall for FY2018 but long term return indicators remain strong

Tyre volume demand is expected to grow by 7-8% during FY18 On the other hand, tyre imports have surged in the last five
and FY19, boosted by higher OEM demand and stable years (13% CAGR till FY2017), which has considerably impacted
replacement demand, says an ICRA research report. the domestic TBR segment, where domestic players have made
Replacement demand for the truck and buses (T&B) is likely sizeable investments. Imports too were affected by
to pick up to 5 % in FY18 following the 0-3 % decline witnessed demonetisation and were almost flat in FY2017. Imported tyres
in FY17 (Provisional). Though demand in Q1FY2018 suffered largely cater to the cash-based unorganized, replacement
due to destocking by dealers before GST rollout, this is a short market. Despite the demonetisation impact, T&B imports still
term aberration and volumes should recover in H2FY2018. grew by 9% for FY2017, while two-wheeler tyre imports, which
According to Subrata Ray, Sr Group Vice President, Corporate saw a sharp growth in recent years, fell by 11% on a full year
Sector ratings, ICRA, “The FY2017 (provisional) estimates basis as the domestic capacities came online closing the supply
indicate tyre industry volume demand were robust at 9%-9.5%, gap in the Indian markets. Even before demonetisation, the
led by stronger than expected replacement demand (accounts segment witnessed a 3% de-growth.
for over 65% of the industry ) of 10%-13%; offsetting muted Given the sizable accrual build-up in the industry over the
OEM growth of 5%. Tyre volumes stood at 16.7 lakh units past few years, ICRA research expects new capacity
against an expected 16.2 lakh units. This was primarily due to announcements to pick up in the coming quarters.
higher than expected demand for two wheeler tyres.” Commissioning of some of these plants is phased across 4-6
Expected growth in demand in the commercial vehicle (CV) quarters, like the CEAT’s Halol and Butibori plants, which have
and two-wheeler industry will result in automotive production started phased production over the past four quarters.
growing by 9-10% in FY2018, compared to the 5.2% growth in Domestic natural rubber (NR) prices for FY2017 averaged Rs.
FY2017. During FY2017, demonetization and impending GST 135/kg, the highest over the last four years. Sharp volatility
rollout led to considerable demand volatility. The impact of was witnessed with the peak domestic and global NR prices
the transition to GST is visible in the CV segment and given hitting Rs. 160/kg and Rs. 190/kg respectively. The prices since
the inventory destocking across the board in June-17, the the end of Feb’17 have corrected.
automotive demand is likely to be relatively muted during The synthetic rubber (SR) prices, which is linked to movement
Q1FY2018. in crude oil and butadiene (key RM) prices, apart from
Adds Ray, “The Aug’17 recommendation of imposition of fundamental demand and supply, increased sharply during
definitive anti-dumping duties (ADD) on the import of Truck Q4FY2017. This was because of the lag effect of rising crude
and Bus radial (TBR) tyres from China, by Directorate General prices and tight supply for feedstock (butadiene) due to
of Anti-dumping and Allied Duties (DGAD) is a positive closure of large crackers for maintenance in key markets. The
development for the industry. If the ADD is imposed, there prices have moderated since Apr’17 with the fall in oil prices.
would be sharp reduction in tyre imports from China, thus Among other inputs, carbon black has largely mirrored the
enhancing the demand potential for domestic players. The oil prices while caprolactum prices witnessed sharp volatility
duty recommended ranges between $277.53 per tonne and in last two quarters with fluctuation in crude and benzene
$452.33 per tonne.” prices.

As for tyre exports, they rebounded in FY2017 following two ICRA expected a contraction in profit margins for FY2018;
years of negative growth. Led by demand revival across but long term return indicators remain strong. Weighed
product segments, export volumes grew at a robust 29%, while down by weak realizations with rising RM prices, the growth
in value terms the growth was lower at 10%, affected by falling in industry revenues has been subdued in recent quarters.
realizations. As per ICRA, realisations were down due to Industry wide operating and net margins crashed during
downward price revisions taken by exporters, especially in Q4FY17 (down 600 bps Y-o-Y and 240 bps respectively). “For
agriculture / construction and T&B segments, with the gradual FY2018, the profit margins is expected to contract due to
fall in raw material prices. Despite intense global competition, the effect of high cost inventory held by tyre makers and
tyre exports grew at ~10% while exports to the top ten consequent margin collapse in Q1FY2018. While the margins
countries grew by ~20%, overall. USA and Germany remain are likely to improve in ensuing quarters, the profit margins
the preferred destinations for export of Agri / construction for FY2018 is expected to be much weaker than FY2017,”
tyres. concludes Ray

August 2017 22



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]

August 2017 24

Competition Law Updates

National Company Law It is also alleged that the collusion began in mid 90’s
Tribunal stays Rs. 87 and continues till now and that the manufacturers met
crore penalty on Hyundai in secret committees of employees to set prices,
suppliers and other forms of collusion.
G R Bhatia, Partner & Head, CCI, in a recent order had
Competition Law Practice Group, penalized Hyundai Rs. 87 Bundeskartellamt, the German cartel enforcer, imposes
fines on automotive part manufacturers
Luthra & Luthra Law Office crore for setting the
maximum discounts that The Bundeskartellamt has imposed fines amounting to
their dealers could offer 9.6 million Euros on three manufacturers of heat shields
and their representatives.
to their customers for
fixing the maximum resale No fine, however, has been imposed on Carcoustics
price at which cars could International GmbH, Leverkusen (Germany), as it
cooperated with the Authority in uncovering and busting
be sold, thereby the cartel. In India, a similar provision exist, whereby a
amounting to illegal resale leniency applicant can disclose details of cartels and
price maintenance. have the benefit of concession in the penalty.

On appeal, the NCLAT by its order of 18th July, 2017, European Commission opens in-depth investigation into
stayed the fine on the ground that CCI had violated Knorr-Bremse's proposed takeover of competing brakes
Hyundai’s right to fair hearing and that CCI’s order is manufacturer Haldex

without adhering to the principles of ‘natural justice’, The European Commission has opened an in-depth
as it failed to give Hyundai an opportunity to respond investigation to assess the proposed takeover of Haldex
when it changed the definition of the relevant market. by Knorr-Bremse under the EU Merger Regulation.

Buyers sue German Car makers in New Jersey The Commission has concerns that the deal may reduce
competition for brake systems and related components
Three car buyers have filed a class action suit in New for commercial vehicles in Europe. Knorr-Bremse and
Jersey federal court accusing luxury German automakers Haldex are two of the world's largest manufacturers of
of getting together to raise prices by sharing sensitive commercial vehicle brake systems and components.
information and reaching illegal agreements regarding Knorr-Bremse announced its public offer for Haldex on
technology, costs, suppliers, markets, emissions 5 September 2016 and eventually outbid the competing
equipment and other competitive attributes during a offer of ZF Friedrichshafen, another car parts
two decade-long conspiracy. manufacturer.

The three buyers, on behalf of all individuals, who Supreme Court stays COMPAT order that imposed
bought or purchased a luxury German car between 1 penalty on 3 car companies

January 1990 and till date, are seeking relief and The COMPAT by its order dated 09.12.2016, concurred
damages for an alleged violation of the Sherman Act. with the findings of the CCI and directed Ford, Toyota
and Nissan, to remove all restrictions imposed through
European Commission’s DG along with German agreements on auto parts suppliers so as to open up
Competition enforcer investigate a possible German car market for spare parts, remove all restrictions on supply
collusion of spare parts by original equipment suppliers to
authorized dealers, etc.
The European Commission and Germany's competition

enforcer are reviewing certain information that suggests
that BMW, Volkswagen and Daimler may have colluded
to restrain the price of crucial ‘emissions technology’.

According to the US Environmental Protection Agency, On appeal, Hon’ble Supreme Court has stayed the
Volkswagen in 2015 had cheated the emissions test by operation of the COMPAT’s order and the matter is yet
masking the amount of pollutants that its cars emitted. to come up for arguments

25 August 2017

New on Wheels

Yamaha Fazer 25 Launched

India Yamaha Motor Pvt Ltd added Fazer 25 to its with a high-quality look, making it an irresistible option as
successful and popular FZ Series with a price tag of Rs. the top-end model of the FZ series. At the same time, it
1,29,335, Ex-Showroom, Delhi. The new FAZER 25 offers the nimbleness and easy-to-use character for daily
mounted with a newly designed air-cooled, 249 cc, 4- use as well as long distance riding in a variety of usage
stroke, SOHC, 2-valve, single-cylinder, fuel-injected engine scenes.
on a lightweight frame to realize the product concept of Speaking on the occasion, Masaki Asano, Managing
a "powerful new mid class tourer." Fazer is already Director, Yamaha Motor India Sales, said, "Yamaha is known
recognised for its edgy design, sporty look and high as the manufacturer of some of the versatile sport tourers
performance. that has created excitement in the motorcycling culture of
Fazer 25 delivers riding comfort during long distance rides the world. Since 2008, Yamaha has seen similar excitement
along with fuel-efficiency and environmental performance in customers with the introduction of performance
and is targeted for youngsters in their 20s and early 30s. motorcycles in India. Now, it's time Yamaha takes it to an
With the theme of 'Great stories begin on weekends', all new high with the next line of the FZ generation bikes.
Yamaha Fazer 25 will be hitting the Indian roads by With its improved looks and other suitable changes, the
September 2017. new Fazer 25 will keep up with the expectations of the FZ
The new offering from the company will be available at breed of riders."
Yamaha dealerships in 2 exciting colour schemes "Soulful Roy Kurian, Senior Vice President, Sales & Mktg, Yamaha
Cyan" and "Rhythmic Red". Motor India Sales, added, "The new trend of motorcycling
Based on a reliable 249 cc single-cylinder engine - proven has ushered in India as the touring culture is trending
on sport bikes in the Japanese market - the model's engine everywhere in motorcycling society. The new Fazer 25 with
has been fine-tuned and optimized for the Indian traffic superb control and balance will further meet the
conditions as well. Primarily the intake/exhaust systems and expectations of the touring enthusiasts who look for
the ignition system have been tuned to meet the Indian smooth cruising with undiluted power-balance delivery.
conditions. Building on the reputation, the new model has Besides, the bike will also meet the expectations of both
been developed with Yamaha's New Generation Engine advanced riders and calm commuters and thus, aims to fulfil
Development Ideal - Blue Core* featuring overall improved the aspirations of a diverse age group."
performance, including fuel efficiency, acceleration and With the new launch, the company is confident that it will
environmental friendliness. The model complies with BS- be able to make new inroads in the customer base,
IV emission standards. especially those who wants to step up to a premium
With its maximum power output of 20.9 PS at 8,000 rpm touring-friendly motorcycle. The company is very bullish
and maximum torque of 20 Nm at 6,000 rpm, the 249 cc on the new launch and is optimistic that it will keep up with
model also offers an impressive array of new features the strong growth numbers the company has witnessed in
including the LED headlight and an LCD instrument cluster the last few years.

August 2017 26

Hyundai Launches ‘Next Gen Verna’ in India

Hyundai Motor India Ltd (HMIL) launched the 5th Generation super body structure ensures adequate weight control, thus,
Next Gen ‘VERNA’ with SUPER BODY STRUCTURE on August enhancing both performance and fuel-efficiency.
22, 2017 with price tag starting Rs. 7,99,900 for petrol variant The Next Gen Verna has outstanding low NVH characteristics
and Rs. 9,19,900 for diesel variant. by the use of enhanced sound absorption materials and Strong
The Next Gen Verna is technologically more advanced than Body Structure (AHSS) and improved engineering of design.
its predecessor because of its Futuristic Design, Dynamic Multiple measures have been taken to contain NVH to barely
Performance, Safety and other features. perceptible traces, such as engine and transmission mount
Speaking at the launch of Next Gen Verna, Y K Koo, MD and design change, implementation of tunnel insulator, extensive
CEO, HMIL said, “ The Next Gen Verna is ‘Intelligent by Design’ application of foam filler in cavity, etc.
and an All-rounder car with Human Technology Connect Superior Ride & Handling
comprising Futuristic Design, Smart Connect, Ingenious Next Gen Verna is engineered to deliver superior ride and
Detailing, Superior Dynamics and Super Body Structure for handling for utmost driver confidence and enthusiastic driving
new age aspirational customers. The Verna brand has been a experience. The new Verna is built on K2 platform, thus,
landmark product in Hyundai growth story winning many enabling precise tuning of key suspension components for
prestigious accolades worldwide.” enhanced cornering and high speed stability, superior ride
Engine and Transmission comfort and precise handling performance, making it the Next
The Next-Gen Verna is equipped with the most powerful Gen Sedan optimised for Indian conditions. The rear suspension
powertrain options with a choice of two power packed 1.6- geometry has been modified for stable and comfortable ride
litre Dual VTVT petrol and 1.6-litre U2 CRDi VGT diesel engines. for rear passengers by vertical angle of rear shock absorbers
The engines with advanced 6-Speed Manual and 6-Speed and coil springs on the coupled torsion beam axle.
Automatic Transmissions have been tuned to provide superior The front suspension uses an optimally designed McPherson
low and high speed performance to suit city & highway driving strut with coil springs and gas shock absorbers, along with a
with high fuel-efficiency. front stabilizer to help reduce the body roll when cornering.
The powerful 1.6-litre Dual VTVT petrol engine offers 123PS The standard Motor-Driven Power Steering System (MDPS)
of power with high fuel-efficiency and 1.6-litre U2 CRDi VGT has been tuned to provide superior feedback while cornering
diesel engine generates 128PS of power. and at high speeds thus delivering precise handling response
Super Body Structure and confident drive. The front wheel caster angle has been
The Next Gen Verna with ‘SUPER BODY STRUCTURE’ is built modified to further enhance the steering feedback to the
on Advanced High Strength Steel (AHSS) body structure, driver at Highway speeds.
including Hot stamping Applications, which ensures superior Colours and Variants
performance and unmatched safety. The Rigid and Responsive To match the Sporty and Dynamic characteristics of The Next
Chassis, and improved impact Harshness offers Superior Road Gen Verna, 4 new colours have been introduced making it an
feedback to the driver for a confident driving experience. The array of 7 exterior colours options with 12 Variants.

27 August 2017





Upgrades & Variants

Mercedes-Benz Commemorates 70 Years of Indian Independence
with Launch of GLC 'Celebration Edition'

Luxury car maker - Mercedes-Benz announced the launch of enhance the car's stunning and dynamic looks and luxury
a special GLC 'Celebration Edition’ on August 14 to mark the quotient.
70th anniversary of India's Independence and also the The GLC 220d 'Celebration Edition' is priced at Rs. 50.86 lakh
successful run of the GLC in the Indian market, since its debut and the GLC 300 'Celebration Edition ' at Rs. 51.25 lakh (Ex-
in June 2016. Showroom, All India). It is the perfect product for a customer,
Continuing the winning streak of GLC in India, the Mercedes- who aspires to own a unique SUV, which is a combination of
Benz 'Celebration Edition' is an exclusive product, as it will be sportiness and luxury. With this launch, Mercedes-Benz India
available in limited numbers only. The GLC 'Celebration Edition' adds yet another exciting paint option in the GLC series in
offers sporty exterior and a plush luxurious interior that India - the 'Designo hyacinth red'.
Launching the GLC ‘Celebration Edition’, Roland Folger, MD
and CEO, Mercedes-Benz India, said “We are glad to launch
the GLC 'Celebration Edition' to commemorate India's 70th
Independence day and also celebrate the SUV's overwhelming
success in the Indian market since its debut, a year ago. The
GLC underscores our philosophy of introducing world-class
products from our global portfolio, for our discerning Indian
customers. The sporty exterior and interior accessories offered
in the 'Celebration Edition' enhances the car's striking
appearance. We are positive that the 'Celebration Edition' will
delight the customers who desire to make the best of every
ground. With the launch of GLC 'Celebration Edition',
Mercedes-Benz celebrates its long-standing relationship with
the Indian customers.”

Suzuki Unveils Gixxer SF ABS at Rs. 95,499

Augmenting expansion in motorcycles segment, Japanese two- combustion efficiency, offering customers better fuel-
wheeler manufacturer Suzuki unveiled, on August 11, Gixxer efficiency and a more exciting ride. The Carbureted (Standard)
SF ABS (Anti-Lock Brake System) at Rs. 95,499 in the capital.
variant is priced at Rs. 95,499, while the fuel injected variant
Gixxer SF ABS comes in two variants - Carbureted (Standard); is available for Rs. 99,312, the company added.
and Fuel Injected (FI) and will be available across Suzuki
dealerships in India, the company said in its statement.

Commenting on the accomplishment, Sajeev Rajasekharan,
EVP, Sales and Mktg, SMIPL, said, “We are pleased to announce
the ABS fitted variant of Gixxer SF. The safety and well-being
of our customers is of paramount importance for us at Suzuki.
The new variants not only enhance the rider’s safety, but also
make every ride more exciting.”

The ABS is a supplemental system that automatically controls
the braking force more efficiently and avoids wheel lock-up in
case of slippery road conditions, inconsistent road contours,
or sudden braking. Besides ABS, the Gixxer SF advanced fuel
injection technology is equipped with 6 sensors that calculate
the optimum amount of fuel to be injected for better

August 2017 30

Upgrades & Variants

Audi Drives in the Audi Q7 Design Edition

Audi announced on August 17 the introduction of the Audi • Ambient Lighting Package
Q7 Design Edition in India with a host of new features to • Interior mirror with automatic anti-glare action
supplement the class defining features of the SUV. • Leather-covered multifunction plus steering wheel, 4-

Powered by 45 TDI (3.0 TDI) - that engine churns out 249 hp spoke with paddle shifters
(183 kW) of power and 600 Nm of torque, propelling from 0 • Electromechanical power steering
to 100 kmph in 7.1 seconds, Audi Q7 with Design Edition • Electric Steering Wheel Adjustment
package is available at Rs. 81.99 lakh. • Cruise Control and Audi Drive Select
• Adaptive Air Suspension with All-road and off-road modes
Rahil Ansari, Head, Audi India, said: “We have been at the • Electrically adjustable front seats with Driver seat
forefront of creating the luxury SUV segment in India and the • 4-Way Lumbar Support
Audi Q7 has been the model that set the ball rolling for us. • 4-Zone Deluxe Automatic Air Conditioning
The Audi Q7 has always been for luxury connoisseurs who • Electric opening & closing of luggage compartment lid.
appreciate the finest in life and I am confident that the Audi
Q7 Design Edition will appeal to India’s best.” Infotainment
• MMI Navigation Plus with MMI Touch
Design Edition features • 8 Specific favorite buttons, configurable for music,

• Audi Smartphone Interface contacts, radio and Navigation POI
• 20-inch cast aluminium alloy wheels, 5-Spoke star design • BOSE Surround Sound system with 3D sound
• Full Paint Finish • Audi Virtual Cockpit
• Smoked Tail Lamps • Bluetooth Interface and Voice Dialogue System.
• Door Puddle Projection Lamps with Audi logo - front
• Door Puddle Projection Lamps with quattro logo - rear Safety & Assistance Systems
• Running Board and Exhaust Trims in gloss black. • Cruise Control System with Speed Limiter function
• Audi Pre Sense Basic
Exterior • Automatic Anti Slip Differential with electronic
• Audi Matrix LED Headlamps with dynamic indicators
• Exterior Mirror housing in body color stabilization control
• Exterior Mirrors, electrically adjustable, heated, folding, • Electronic Vehicle Immobilization Device
• 8 Airbags
dimming and memory function • Space-saving spare wheel
• Panoramic Sunroof and High Gloss Package. • Auto Park Assist with 360-degree Surround Camera.

Interior
• Upper inlays in brushed aluminium
• Lower inlays in Walnut terra brown

31 August 2017



Upgrades & Variants

TVS Motor Introduces TVS Jupiter Classic Edition

TVS Motor Company launched the new TVS Jupiter Classic Commenting on this launch, Aniruddha Haldar, V ice
edition on August 8. The new edition comes with enhanced President (Marketing) – Commuter Motorcycles, Scooters &
features, which are set to evoke a sense of timeless Corporate Brand, TVS Motor Company, said, “Unchanging
reassurance in customers. and yet always contemporary that’s how we have always
seen our offering of TVS Jupiter to our consumers. And
The new edition offers a variety of features such as a sunlit continuing its promise of ZYADA KA FAYDA, we celebrate
ivory body colour, ‘classic-edition’ decals, elegant full chrome timeless value in celebrating CLASSIC, the new TVS Jupiter
mirrors, a classy chrome backrest, along with other designed Classic Edition. Its unique features cover style, practicality,
features like a smart USB charger and dual-tone seat. and value, like the pillion back rest or the stylish windshield."
TVS Jupiter Classic edition is powered by a next generation,
TVS Jupiter Classic Edition: New Feature Highlights all-aluminium, low-friction 110cc engine that delivers an
• Stylish Windshield incredible mix of power, superior acceleration and best-in-
• Elegant Round Shaped Full Chrome Mirrors class fuel-efficiency. The metal bodied, TVS Jupiter Classic is
• Unique Sunlit Ivory Body Colour styled to have a substantial on road presence, which delivers
• Special “Classic” Decals high-performance ride quality with superior ride comfort
• Premium Dual Tone Seats with Stitching making it a perfect, sensible companion. The scooter also
• Exclusive Silver Oak Panels comes with TVS patented Econometer, which guides riders
• Sleek Chrome Finish Handle Dampeners in both 'Eco Mode' and 'Power Mode' and the engine delivers
• Classy Chrome Backrest best-in-class fuel economy in 'Eco' mode.
• Smart USB Charger and Classic Dial Art TVS Jupiter Classic Edition is priced at Rs. 55,266, Ex-
• Disc Brake. Showroom, Delhi and will be available in all TVS dealerships
across the country.



Know Our Member

Abhijit Auto Agency (I) Pvt Ltd, Guwahati

Abhijit Auto Agency (I) Pvt Ltd, a new Life Member of FADA, in for repair & service, the dealership clocked a turnover of
based at Guwahati in Assam, is dealership of Tata Motors, Rs. 128 crore during the year 2016-17.
engaged in sale, service and spares of Tata buses and the SCV,
LCV and ICV range of Tata trucks. Customer satisfaction is the buzzword at Abhijit Auto Agency
The company ventured into the automotive business 7 years and forms the core of the management’s philosophy. There
ago and has been witnessing steady growth ever since its is a special designated team within the dealership to handle
inception. onsite repair and maintenance service. The workshop
operates two shifts and is also open on Sundays to cater to
Abhijit Auto Agency boasts of an exquisite, tastefully designed
showroom at Guwahati with 3,000 sq ft of vehicle display the customer needs. The dealership
area and 10,000 sq feet of back office, having all the modern regularly organizes sales & service camps at
facilities for the comfort and convenience of its customers. far-flung areas to maintain its connect with
the customers.
The driving force behind the phenomenal
growth of Abhijit Auto Agency is the father-
son duo - Vijay Kumar Jasrasaria, Managing
Director and Abhijit V Jasrasaria, Director.
Both Vijay Kumar Jasrasaria and Abhijit V
Jasrasaria are reputed businessmen in
North-East and manage a number of
business interests, operating from Guwahati,
Kolkata and New Delhi.
In addition to the automotive auto retail
trade & servicing, other major business
entities managed by the father-son duo are:
(i) Neelkanth Finbuild Ltd, which is engaged
in the business of finance and real estate (ii)
Antique India Pvt Ltd – a company in the
business of warehousing and renting of premises; and (iii)
M/s Abhijit International – a firm that owns and operates a
bonded warehouse, dealing in the wholesale of alcoholic
beverages in India and abroad.

The dealership’s state-of-the-art workshop, with 5,500 sq ft
of back office, has 12 bays equipped with the latest tools and
machinery for effective repair and servicing of the entire range
of Tata buses, pick-ups and trucks. The ISO certified (ISO
9001:2008) world-class workshop rigorously follows all the
safety and environment norms. The repair and servicing is
efficiently backed by readily available spare parts that are
handled by a separate division within the dealership.

While Guwahati is the hub of its business activities, Abhijit Vijay Kumar Jasrasaria Abhijit V Jasrasaria
Auto Agency also has sales outlets at Goalpara, Jagiroad,
Rangia, Chhaygaon, and Agia. The area of dealership
operations encompasses Guwahati, Kamrup and Districts of
Goalpara, Morigaon and South Dubri.

The operations of Abhijit Auto Agency are carried on with FADA Wishes Abhijit Auto Agency, Vijay Kumar Jasrasaria
the support of a strong, dedicated team of 212 employees. and Abhijit V Jasrasaria, as also their entire team All the
With a sales tally of 4,342 vehicles and 2,563 vehicles driving Best

35 August 2017

News Basket

Popular Nexa Sweeps Awards

Bags 22 Awards in the first Nexa Dealer Conference

Making its advent a year ago, Popular Nexa has created history Categories in which Popular Nexa bagged the awards
of sorts, bagging 22 Awards across categories in the first ever
Nexa Dealer Conference for the FY 2016-17 held at CATEGORY PLACE
Mahabalipuram. This leaves the others way behind in the
race, thereby setting quite a tough benchmark for all in the All Model Highest Test Drive % Kochi
industry. Popular Nexa operates from Kochi, Calicut and All Model Highest E to R Conversion Kochi
Chennai and all three units have bagged awards on various All Model Highest Retail Volume Kochi
parameters. A fourth unit at Marthakkara, Trichur has started All Model Exchange Volume % Kochi
functioning recently. Highest Quality of Sales Score Kochi
Speaking on this stupendous achievement, John K Paul, MD, All Model Highest ISL Volume Kochi
Popular Vehicles & Services Pvt Ltd that operates a network Lowest Attrition Rate Kochi
of Maruti Suzuki’s dealerships, including exclusive Maruti Highest Baleno Retail Volume (All India No:8) Kochi
Suzuki Nexa outlets for premium range of passenger vehicles, Highest CRM Retail Conversion Kochi
in the State of Kerala and Tamilnadu, said, “Such a feat of Highest S-CROSS Retail Volume Kochi
sweeping an entire gamut of awards is rare in dealerships Highest All Model Walk-in-Conversion Kochi
and all Kudos to Team Popular Nexa for their brilliant efforts Highest All Model Home Visit % Calicut
in holding the flag aloft..!!! At Popular Nexa, each one is Highest S cross GNA Retail Per Car Calicut
committed to excellence and on this occasion of celebration, Highest Tie-Up PSU (Less SBI group) Penetration Calicut
a reiteration too goes along that we shall retain our Highest GNA Per Car Retail ( All India No.8) Calicut
supremacy in the industry at all times, adding value to our All Model Highest ISL Volume Chennai
customer service.” All Model Highest Exchange Volume Chennai
Highest S-CROSS Retail Volume Chennai
All Model Highest Retail Volume Chennai
Highest EW Penetration (All India) Chennai
All Model Exchange Penetration Chennai
Highest S-CROSS All India No. 1 Chennai

GST Council Recommends Increase in Cap on Cess on Motor
Vehicles from 15% to 25%

GST Council considered the issue of cess leviable on motor After introduction of GST, the total tax incidence on motor
vehicles in its 20th meeting held on 5th of August 2017 and vehicles [GST + Compensation Cess] has come down vis-a-vis
recommended that Central Government may move legislative the total tax incidence in pre-GST regime. The Schedule to
amendments required for increasing the maximum ceiling of the Goods and Service Tax (GST) (Compensation to State) Act
cess leviable on motor vehicles falling under headings 8702 2017, specifies the maximum rate at which Goods and Service
and 8703 including SUVs, to 25% instead of present 15% . Tax Compensation Cess may be collected. In respect of motor
However, the decision on when to raise the actual cess leviable vehicles, the maximum rate at which Goods and Service Tax
on the same will be taken by the GST Council in due course. Compensation Cess may be collected is currently 15%.

August 2017 36

News Basket

Ashok Leyland Introduces Digital Market Place

Potential of Rs. 1,000 Cr Revenue in 3-5 Years

Ashok Leyland, flagship of the Hinduja Group, launched the bring process efficiencies and operations improvement. Today,
Digital Market Place, an industry-first combination of four we are extending the use of digital medium to enhance our
innovative digital solutions, on August 10. These solutions, customer efficiency, performance, and profitability through
developed on the brand philosophy of ‘Aapki Jeet, Hamari various means of “anytime, anywhere” support for their
Jeet’, have the potential to transform the commercial vehicle vehicles. These initiatives will be a growth driver for us and
business in the country. Riding on the exponential smart phone will take us closer to our goal of achieving one-third of our
growth, these digital solutions are simple to use, compatible revenues from the aftermarket business. We estimate that
with all smart phones, and work like any other, everyday app. these initiatives have the potential of generating Rs. 1,000 Cr
The four digital solutions, will help customers manage their in the next 3 years.”
business with a simple tap, by making it simpler for them to 4 Pillars of Ashok Leyland’s Digital Market Place:
log on to their business from anywhere and manage their 1 iALERT is a state-of-
operations with ease.
the-art telematics
technology that lets
customers track and
trace their vehicles in real time. i-Alert’s live dashboard
displays information regarding all the vitals of their
vehicle’s health in real time. Moreover, if their vehicle
needs attention, i-Alert sends the alerts directly to their
mobile.

2 ServiceMandi
connects the
customers with the
Ashok Leyland
trained and qualified
mechanics wherever
their vehicle is. They
can get live status updates of their vehicle repair directly
on their mobile. Once done, they can pay digitally on the
pre-agreed rate, all from the comfort of their home.

Based on the latest technology platform, Ashok Leyland’s 3 e-DIAGNOSTICS is
Digital Market Place will empower customers to better manage first-of-its-kind
their business and enhance their profitability, as well as
provide an opportunity for Ashok Leyland to sell services in Bluetooth diagnostic device that can easily pinpoint the
error code for customers’ vehicle by connecting the phone
the aftermarket. with their vehicle via Bluetooth. A handy troubleshooting

Speaking at the launch, Vinod K Dasari, MD, Ashok Leyland, list pops up to help the mechanic or the driver resolve
said, “Ashok Leyland has always been at the forefront of the error in a simple step by step visual process.

innovation and technology. Following our belief of ‘Aapki Jeet, 4 LeyKart offers round
Hamari Jeet’, we have consistently strived to bring many the clock availability
industry-firsts which have disrupted the norm and helped us
earn our customers’ trust and respect. To support this rapidly of genuine spare parts. Customers can search for the
specific part they require by entering their vehicle
growing network of customers, we have consciously invested registration number or selecting the relevant part from
in creating a digital market place to support them. These digital
solutions are an integral part of our growth plan and has the the parts list. They can add their choice to the Kart and
pay digitally. The parts will be dispatched to their address
potential to overhaul our commercial vehicle ecosystem. We from the nearest Warehouse and they can track the
have been using the digital medium for the past five years to
shipment on their mobile.

37 August 2017



News Basket

Detroit Wants Trump to Push for Wider Adoption of US Vehicle Standards

US automakers are pushing for broader acceptance of US European officials have marketed their auto standards as a
vehicle standards as a way to increase exports. They want the de facto international standard because they are developed
Trump administration to go on offense, arguing that through the UN Economic Commission for Europe, which all
eliminating barriers to exports will do more to support the countries can participate in even though it is a regional body.
domestic industry than defensive measures to punish imports. A US-certified vehicle must undergo 26 changes, including for
A big part of their game plan: get US negotiators to aggressively external mirrors and defrosting systems, to make it compliant
push other nations to accept US safety and performance for the EU market. Those changes can cost as much as $1,150
standards for vehicles, alongside European Union or domestic per unit, making it unprofitable for certain US-made vehicles
standards. to be sold in markets that exclusively recognize EU standards,
The standards issue factors in the heated competition between according to the American Automotive Policy Council filing.
US and European manufacturers for global sales. Broader "What we encourage other countries to do is to accept both,"
acceptance of US standards is needed, US automakers say, council President Matt Blunt said.
because it is too expensive to build vehicles to comply with Japan and South Korea, notably, have long had standards that
disparate standards. effectively limit US auto imports.
"Inaction in the face of the EU's efforts to promote its auto In the 1990s, Japan approved US vehicle standards, but only
safety standards, and inaction in response to the broader for a small annual quota.
regulatory fragmentation the industry is experiencing will lead The US has had modest success countering EU efforts in Latin
to a further isolation of the US and a shrinking ability to export America and the Middle East. However, a more sustained
vehicles to key emerging and growing markets," the American global effort is necessary to keep open markets that accept
Automotive Policy Council, which represents the Detroit 3, US-certified vehicles, as well as to expand the number of
said recently in comments submitted to the US Trade countries that accept US auto standards, the American
Representative as part of its investigation into trade deficits. Automotive Policy Council said.
• Mexico, Canada: Accept motor vehicles certified to US It also urged the government to re-engage with the UN's
special working group where global technical regulations are
safety and environmental standards. negotiated to jump-start a moribund process.
• Japan, European Union: Require vehicles to be Automakers saw the Obama administration's pursuit of a US-
EU free-trade agreement as an opportunity to achieve mutual
significantly modified to comply with UN Economic recognition of auto standards, which could have opened other
Commission for Europe safety standards, plus unique markets that endorse the European standards. But the Trump
national auto standards. administration, which is hostile to multilateral trade pacts, has
• South Korea: Allows 25,000 US imports per year, per scuttled the Transatlantic Trade and Investment Partnership.
manufacturer as long as they meet US safety standards.
Emission and other standards are not included, so
modifications are still needed to sell in Korea.

Upcoming talks to renegotiate the North American Free Trade The automakers' new game plan includes an old play: pushing
Agreement and tweak the bilateral trade pact with South Korea the US government to write strong, enforceable rules against
are expected to heavily focus on automobiles. currency manipulation into free-trade agreements. Countries
Industry officials and trade experts say the European Union in such as South Korea and Japan, they argue, have benefited
recent years has masterfully persuaded countries in other from keeping their currency artificially weak to boost exports
regions to accept vehicles certified to European safety and deter imports.
standards, which often effectively freezes out cars built to US
standards. The potential damage to US companies is even Other trade associations for US-based automakers and
greater when EU standards are incorporated into free-trade suppliers have joined the Detroit 3 to urge the Trump
agreements, such as with Vietnam, because regulators in administration to lock in standards recognition and currency
participating countries often interpret the language as an manipulation as provisions in NAFTA so it can be a model for
exclusive standard. future deals, even though the problems don't exist in Canada
and Mexico.

39 August 2017

News Basket

Toyota Plans Truck, Possibly SUV Production in Mexico After
Trump Threat

Toyota Motor Corp said it planned to build pickup trucks and US assembly plant and work together on electric vehicles.
possibly SUVs at a new plant in Mexico, a move that followed A move to produce SUVs in Guanajuato would mark a
threats by US President Donald Trump to penalize the company continuation of a "burgeoning trend" of Mexican
if it built small cars south of the border. manufacturing meeting quality standards needed to
produce more expensive vehicles, said Christopher Wilson
Toyota initially planned to produce Corolla sedans at the plant of the Woodrow Wilson International Center. "Instead of
it is building in the central state of Guanajuato but will now building lower value cars that generally offer smaller
switch production of the small cars and a new Mazda SUV margins in Mexico and keeping high-value SUV and luxury
crossover to a new assembly plant planned for the United model production in the US, they are moving in the
States. Trump threatened in January to impose a hefty fee on opposite direction," said Wilson, deputy director of the
the world's largest automaker if it built Corollas for the US think tank's Mexico institute. The moves by Toyota seem
market in Mexico. Toyota de Mexico spokesman Luis Lozano to be designed to reduce political pressure on the company
said, the global automaker would study producing SUVs in from President Trump. Toyota's Lozano said he expected
Guanajuato, in addition to the Tacoma truck model. "We're the company's level of investment in the region to remain
going to concentrate only on pickups at the beginning and similar despite the shift in plans. "The investment that we
are studying the potential for SUVs in the future," he said. calculated when we announced the decision to make a
Trucks and SUVs represented some 65% of the North American plant for Corolla was for $1 billion dollars," he said. "At
market, Lozano said. The decision came as Toyota planned to present, we don't have a final figure for what this change
take a 5% share of smaller Japanese rival Mazda Motor Corp means for our assessments. Up to now, it seems it won't
as part of an alliance that will see the two build a $1.6 billion vary substantially," Lozano added.

Shriram Automall Wins Best Service Provider of the Year Award

Shriram Automall India Limited (SAMIL), Service Provider for On the occasion Sameer Malhotra, CEO, Shriram Automall,
Exchange of Used Vehicles & Equipment, was presented with said “The award for ‘Best Service Provider of the Year’
“CIA World Builders & Infra Award 2017”, under the category strengthens the fact that SAMIL is a brand, which always puts
of ‘Best Service Provider of the Year’. customer first. Its professional services and transparent
bidding platforms are aimed to empower customers with the
power of choice and transparency. With our professional
services, we have changed the lives of thousands of customers,
by transforming them from a driver to an owner himself.”

SAMIL offers services and customer experience, meeting the
strict quality standards across all locations in the country.
Customers come to SAMIL to choose from the wide range of
available inventory options and transact through the most
trusted and transparent platforms and are benefitted with a
number of programs like Drive Your Trust (DYT) Cards, Free
Meal Facility during Event, Free Training for Online Bidding
Participation, Scholarship for Children of Truck Drivers, Free
Medical Checkups during the event etc.

The award ceremony was conducted on 31st July 2017, at Within a span of just six years the company has expanded its
Grand Hyatt, Santacruz (East), Vakola, Mumbai by CIA World wings from national highways to remotest corners of the
Magazine. country. SAMIL achieved some benchmark feats for conducting
over 42,000 bidding events, resulting in around 5.8 lakh
transactions and acquiring over 6.7 lakh customers.

August 2017 40

News Basket

Honda 2W Inaugurates 4th Assembly Line at its Karnataka Plant

Total annual capacity from Honda’s four plants is now at 6.4 million units

Continuing to invest in ‘Make in India’, Honda Motorcycle & Narsapura plant creates global record as ‘World’s largest &
Scooter India Pvt Ltd (HMSI) inaugurated the fourth assembly highest productivity plant of Honda’
line at its landmark third two-wheeler plant at Narsapura (near • India is now the biggest production base of Honda
Bengaluru, Karnataka) in India on August 2. With this latest
expansion of 0.6 million units, HMSI’s combined annual worldwide
production capacity from all four plants is 6.4 million units o New 4th line of 0.6 million annual capacity at Honda’s
annually – making India the No. 1 production hub for Honda’s
two-wheeler operation globally for the first time. Narsapura plant starts commercial production
o With this expansion, Karnataka plant is now
Present at the line inauguration at Honda’s third plant in
Karnataka were Shinji Aoyama, Chief Officer - Asia and Oceania Honda’s biggest plant worldwide with 2.4 million
Regional Operations, Honda Motor Co., Minoru Kato President units annual production capacity
& CEO – HMSI and senior management officials from Honda. o India becomes No. 1 production base of Honda
Elaborating how Asia Oceania region contributes 60% to worldwide: HMSI’s total capacity from 4 plants
Honda’s global 2-Wheeler, automotive and power product increases from 5.8 million to 6.4 million units in
sales and how India is driving the growth, Shinji Aoyama, said, FY’17-18.
“Honda’s 2-Wheeler business spans more than 120 countries • Honda and its allied suppliers invest over Rs. 5,400
worldwide and India is leading the demand. In 2016-17, India crore in Karnataka
alone contributed 28% to Honda’s global 2-Wheeler sales and o Honda 2W cumulatively invests over Rs. 2,600 crore
became the No. 1 contributor to Honda’s 2-Wheeler business. directly at its 3rd plant
The growing Indian 2-Wheeler market is top priority for Honda. o 26 suppliers invest additional Rs. 2,800 crore and
To better meet dynamic market demand and to prepare for set up ancillary plants in Karnataka.
the future opportunities, today Honda has inaugurated the • Direct & indirect employment to 22,000 people in
fourth assembly line in the Karnataka plant.” Karnataka
o Honda provides over 7,000 direct employment at
its new 4th assembly line
o Another 15,000 indirect employment opportunities
ushered in by Honda’s suppliers.
• Honda’s 3rd plant has many firsts in Manufacturing
technology worldwide
o The Green factory is Honda’s first plant with 100%
Rain-water harvesting & Solar power system
o State-of-the-art Paint booth automatic air balancing
system (World First in Honda’s 2W operations)
o Cutting-edge manufacturing with advanced
automated processes and 78 robots
o Increased automation in machine shop, paint shop,
weld shop, aiming at higher efficiency and superior
quality.

Detailing on Honda’s growth trajectory in India, Minoru Kato Honda is now also the new No. 2 motorcycle brand of India.
said, “In Q1FY17-18, HMSI aggressive growth led the industry The latest expansion further fortifies Honda’s ability to serve
momentum. Growing double the speed of industry at 19%, the market faster with its increased annual production capacity
Honda alone contributed 68% to industry’s new volumes to 6.4 million units from all plants. In the long term, HMSI’s
resulting in 3% market share gain to ever highest of 30%. While steady and strategic investments will power our dreams to
expanding leadership in scooter segment (59% market share), make India the Export hub worldwide.”

41 August 2017

News Basket

Maruti Suzuki Revamps its True Value Pre-Owned Car Business

Maruti Suzuki announced on August 10, a complete revamp To ensure quality and reliability, pre-owned Maruti Suzuki cars
of its True Value operations, designed to make pre-owned cars will be carefully selected, refurbished at Maruti Suzuki workshops
more attractive and transparent for the customers. and offered to customers with warranty and free services.
MSIL Managing Director and CEO Kenichi Ayukawa said, “We
As a part of Maruti Suzuki’s transformation, a network of want to offer buyers of pre-owned cars the same experience
independent True Value outlets will be set up across the as buyers of new cars. A network of spacious new outlets,
country, with a larger display area for a variety of pre-owned using digital technology for customer convenience, will be a
cars of Maruti Suzuki. These outlets will be digitally integrated highlight of True Value. Our focus will be on quality cars,
through a portal so that customers can access details of all refurbished and certified with the assurance of warranty. A
the cars available at True Value outlets nation-wide. This will star-rating for each car will help the True Value customers to
help customers to make their choice and visit the relevant make a right choice”.
True Value outlet for a test drive.
He added: “As a part of Maruti Suzuki’s transformation, we
True Value 2.0 have introduced new products, entered new segments and
launched the NEXA channel for sales and service. All these
• A network of new True Value outlets to be set up initiatives have been appreciated by our customers. A
• “Star rating” of cars revamped True Value is a part of these efforts.” Certification
• Seamless digital interface to empower customers of a car is an exhaustive process which starts with evaluation
• Focus on quality cars of the car on 376 check points. The refurbishment and service
• Offered with warranty and free service requirements are also identified during evaluation. Then the
• Advanced infrastructure car is refurbished at Maruti Suzuki workshops. Post
refurbishment, the cars are inspected and rated on six
- Brand new stand-alone outlets parameters – engine, suspension, brakes, electrical,
- A wide display area for variety of cars. transmission & steering control and exteriors & interiors. With
this a True Value certificate is issued for the car. Further, a
• Seamless digital experience certified car comes with multiple free services and company-
- Customers can select cars online and visit the respective backed warranty up to one year.
TrueValueoutlet fortestdriveand completingthetransaction
- All details of the car (specifications, features, star ratings Up to 150 new True Value outlets by March 2018
and other details) will be available online.
True Value was first launched by MSIL in 2001. It redefined
• Improved transparency the pre-owned car market by offering a safe, reliable and hassle
- Pre-owned cars will be checked on 376 parameters free purchase experience for buyers of pre-owned cars.
before sale As part of the transformation, up to 150 standalone outlets
- Star ratings for cars (1 to 5 Star) to empower customers will be set up across India by March 2018. Customers will be
to make an informed choice. offered a seamless experience from accessing car details on
portal to test drive and purchase.
• Customers’ delight
- Trust, reliability, transparency and warmth
- Hassle-free documentation
- Standardized and seamless digital and retail customer
experience
- Certified cars will have a warranty period and free after
sales service like new cars.

• True Value ‘certified’ cars
- Maruti Suzuki car not driven for more than 1 lakh km
and less than 7 years old
- Not more than two ownerships
- Vehicle not used for commercial purposes
- No retrofitted CNG or LPG kits.

August 2017 42

News Basket

Tractor Sales Heading Towards All-Time High: CRISIL Research

Good monsoon a big leg-up; credit outlook positive

CRISIL expects tractor sales to touch a new peak of over 6.5 average tractor penetration in India is very low at ~20 per
lakh units this fiscal given prospects of a successive normal 1,000 hectare. That underlines the kind of headroom for
monsoon, with declining interest rates and farm loan waivers growth available over the long term.”
by states also helping matters. Additionally, the farm loan waivers in states such as
Sales had risen 18% last fiscal on good rains — and despite Maharashtra, Punjab, and Uttar Pradesh which account for
demonetisation – after declining more than 10% in 2015 and more than a quarter of the domestic tractor sales – plus the
2016, when monsoon had played truant – underscoring the fact that other states could follow suit — will put money in
strong correlation between weather and the toplines of tractor the hands of the farmers. This, along with declining credit cost
makers. will support tractor sales. The increase in minimum support
Yet last fiscal’s sales, at 5.8 lakh units, were lower than in 2014, price will also help.
suggesting some pent-up demand could manifest given Data suggest loan waivers can also offset the adverse impact
conducive conditions. of bad monsoons on tractor sales. For example, the waiver
announced by the central government in fiscal 2009 had led
TRACTOR INDUSTRY PERFORMANCE to 30% growth in tractor sales in 2010 that, in turn, saw
deficient monsoon. To be sure, there was another bolster here:
Month Total Total Sales Exports subdued sales in the two fiscals preceding, which meant there
Production (Including Exports) was pent-up demand. And the momentum seen in fiscal 2010
continued through 2011 and 2012 because of normal
Jan-17 45,444 42,019 5,998 monsoons.
Feb-17 53,381 40,937 6,445 In the longer term, there are other tailwinds, too: a doubling
Mar-17 68,834 55,142 6,982 of budgetary allocation for long-term irrigation funds,
Apr-17 61,324 60,133 5,216 expansion of crop insurance coverage, sharper focus on
May-17 70,309 64,810 7,212 mechanisation, and increasing usage of tractors beyond tilling
Jun-17 64,913 71,639 6,831 and haulage.
Jul-17 69,385 50,510 6,755 As a result, CRISIL’s credit outlook for tractor makers – it rates
Mahindra & Mahindra and TAFE, two of the biggest in India
Source:TMA with a combined market share of ~65% — is positive,
supported by strong demand and healthy balance sheets. With
The Indian Meteorological Department (IMD) has predicted a capacity utilisation in the industry at ~60%, companies can
normal monsoon this fiscal, too. And thus far, showers have easily address surges in demand without fresh capex.
been well-distributed, with cumulative rainfall at 102% of the In the very near term, the extent of farm loan waivers and the
long period average. spatial and temporal distribution of rains will be key
monitorables.
Says Manish Gupta, Director, CRISIL Ratings, “While the
cascade of good tidings from weather to farm to farmer is on,
there is another structural positive to note, which is that

China July Vehicle Sales Up 6.2 % Y-o-Y

China's overall vehicles sales grew 6.2% in July from a year of Automobile Manufacturers (CAAM) predicted sales would
earlier to 1.97 million vehicles, showing that the world's largest rise 5% this year, slowing from 13.7% in 2016, citing the
auto market continues to rebound from the weakness it saw rollback of a tax incentive for small-engine cars and economic
in April and May, the China Association of Automobile pressures.
Manufacturers (CAAM) reported. Sales of so-called new energy vehicles – all electric battery
In June, vehicle sales volume rose 4.5% from a year earlier. In cars and plug-in hybrid vehicles – increased 55.2% in July from
the first seven months of the year, sales grew 4.1% from the a year earlier to 56,000 vehicles. New-energy vehicles sales
same period last year to 15.3 million vehicles, the association totaled 251,000 vehicles during the first seven months of 2017,
said at a briefing in Beijing. In January, the China Association up 21.5% from a year ago

43 August 2017

Consumer Case Studies

National Consumer Disputes Redressal Commission, New Delhi

Dr B C Gupta, Presiding Member

M/s Cargo Motors (Gujarat) Pvt Ltd – Petitioner

Versus

Consumer Education and Research Society & Ors – Respondents

Revision Petition No. 743 of 2011 Decided on 17.11.2016

(Against the Order dated 30.11.2010 in Appeal No. 1386/2007 of the State Commission Gujarat)

Consumer Protection Act, 1986 – Sections 15, 17 19 and 21 – Central Motor vehicle Rules, 1989 – Rule 42 – Automobile –
Purchase of a car from dealer – Offer of damaged car instead of new one – Complaint allowed by Fora below – OPs should
not have delivered vehicle to Complainant without temporary or permanent registration number and violation of Rule 42
on their part is duly proved from their own admission – It is also admitted in reply of OPs that when vehicle was being taken
to RTO for the purpose of temporary registration, accident did take place with a cycle rickshaw, although OPs have stated
that temporary registration number had been obtained by that time – Dispute arose as Complainant insisted on getting a
brand new car and not the vehicle damaged during accident – When vehicle has already been delivered back to Complainant
after repairs, there does not seem to be any justification for award of whole purchase value of vehicle to Complainant or to
replace vehicle with a new one – However, since accident took place while car was in custody of personnel of Petitioner
and also considering violation of Rule 42 of Central Motor vehicle Rules, 1989, it is found appropriate that a lumpsum
compensation of Rs. 25,000 is made by Petitioner to Complainant – Directed accordingly (paras 11 to 14)

Important Point

Dealer is bound to deliver duly registered car to buyer.

Order

1. Dr B C Gupta, Presiding Member - This revision petition registration number, but only with their trade certificate
has been filed under section 21(b) of the Consumer number. The dealer promised to collect the car from the
Protection Act, 1986, against the impugned order dated Complainant on 18.10.2004 for registration with the
30.11.2010, passed by the Gujarat State Consumer Regional Transport Office. They also collected a sum of
Disputes Redressal Commission, (hereinafter referred to Rs. 1,800 from the Complainant No. 2 on 16.10.2004 for
as “the State Commission”) in Appeals No. 1386/2007 and the said purpose. However, the car was collected by their
259/2008, vide which, the order dated 13.09.2007, passed representative Anand Thakur on 20.10.2004 for taking it
by the District Consumer Disputes Redressal Forum, to the R.T.O. The said car is reported to have met with an
Ahmedabad in Consumer Complaint No. 309/2005, filed accident on way to the R.T.O. office. It is alleged that the
by the present Respondent No. 2 was modified. said Anand Thakur and one more person Sulay Shah came
to the residence of the Complainant without the car,
2. The facts of the case are that the Complainant Ms Sujata which was kept at their showroom and tried to force her
Vidhyut Sur purchased a new Wagon-R car, by taking loan to accept the damaged car, which could be repaired by
from the ICICI Bank, from the Petitioner/Opposite Party them. However, the Complainant refused to take the
(OP-3) Cargo Motors Pvt Ltd, which was the dealer of the damaged car, saying that she had made payment to the
manufacturer - Maruti Udyog Ltd, arrayed as OPs No. 1 OP-3 for a new car. Since the matter could not be resolved,
and 2 in the consumer complaint. The complaint has been the consumer complaint in question was filed, seeking
filed by the said Ms Sujata Vidhyut Sur and the Consumer directions to the OPs to pay an amount of Rs. 3,94,662 as
Education and Research Society (CERS), which is a the purchase price and other ancillary expenses incurred
charitable trust under the Bombay Public Trusts Act, 1950. by the Complainant, along with 12% interest from the
It has been stated in the consumer complaint that the date of payment to the OPs and a further sum of
said car was delivered at the residence of Ms Sujata Rs. 50,000 as compensation for mental harassment and
Vidhyut Sur on 16.10.2004 without any temporary Rs. 3,000 as litigation cost. It was alleged in the complaint

August 2017 44

Consumer Case Studies

that under Rule 42 of the Central Motor Vehicle Rules, a violation of Rule 42 of the Central Motor Vehicle Rules,
1989, the holder of a trade certificate could not deliver a 1989. The learned counsel stated that the car had been
motor vehicle to a purchaser without registration, given back to the Complainant.
whether temporary or permanent.
7. I have examined the entire material on record and given
a thoughtful consideration to the arguments advanced
3. The complaint was resisted by the OPs by filing a written before me.
reply before the District Forum in which, they admitted
that the vehicle was delivered to the Complainant No. 2 8. The main point for consideration in the matter is whether
on 16.10.2004 at her request and in good faith under there has been deficiency in service on the part of the
trade certificate No. GJ-1-TC-538, and the temporary
registration number was awaited and this facility was OPs in handing over car to the Complainant without
temporary or permanent registration having been done,
given to Complainant No. 2 in extraordinary and whether the OPs could be held liable for the
circumstances. It was further stated that the accident
had occurred due to the mistake of a cycle rickshaw, which replacement of the car or to give its full value to the
Complainant on account of the accident of the vehicle.
was carrying iron rods and the said iron rods dashed with
the car from the side. The OP stated that the Complainant 9. In this regard, the reply filed by the OPs before the District
was not entitled to get the value of the car from them Forum is quite material. Para ‘2’ of the said reply says as
and there was no cause of action to file the complaint, as follows:-

there was no deficiency in service on their part. 2. In reply para 2 of complaint the facts mentioned by
the Complainants are not true as whole. The true fact
4. The District Forum, after considering the averments of is that the Complainant No. 2 has requested the
the parties, allowed the consumer complaint and directed company to deliver the car on 16.10.2004 as there is
the OPs jointly and severally to pay a sum of Rs. 3,94,662 some significance of the said date and looking to her
to the Complainant No. 2 along with Rs. 2,000 as cost of demand and request and in good faith delivery of
litigation vide its order dated 13.09.2007. Being aggrieved car was given to the Complainants on 16.10.2004 at
against the said order, two appeals were filed before the her residence as per request, and, therefore delivery
State Commission, one by the OP-3, dealer and the other of Car was given under trade certificate No. GJ-1-TC-
by the manufacturer, OPs-1 and 2. Vide impugned order 538 and the temporary registration number was
dated 30.11.2010, the appeal filed by the manufacturer - awaited and this facility was given to the
Maruti Udyog Ltd was allowed and the award made Complainant No. 2 in extra ordinary circumstances.
against them was set aside. The other appeal was partly Otherwise, opponents are strictly obeying Motor
allowed and the Complainant was directed to return the Vehicles Rules. Further, opponents would like to
vehicle to the OP-3, whereafter she was given the liberty submit that in notice dated 23.11.2004 and
to recover the awarded amount from the OP-3. It is 25.10.2004, the issue regarding temporary number
against this order that the OP-3 - dealer is before this has never raised and as such this issue have nothing
Commission by way of the present revision petition. to do with present complaint.”

5. It was stated during arguments by the learned counsel 10. A perusal of the above reply indicates that the OPs have
for the Petitioner that there had been no deficiency in admitted that the vehicle was given to Complainant No.
service on their part in any manner. They had taken the 2 in extraordinary circumstances, although the temporary
said car to the house of the Complainant as per her wish, registration number for the same was awaited. They have
on the day as desired by her. They had also offered their stated, however, that the vehicle was delivered on a
services for taking the car to the RTO for registration particular day i.e. 16.10.2004, as according to
purpose. The said car met with a minor accident only Complainant No. 2, there is some significance of that date.
and had since been handed over to the Complainant after It is made out, therefore, that although it may be a gesture
repairs. The car was very much with the Complainant for of goodwill on the part of the OPs towards the
her use and hence, the order passed by the consumer Complainant, but they have definitely violated Rule 42 of
fora below directing them to replace the car or to refund the Central Motor Vehicle Rules, which reads as follows:-
its value, was not justified. “42. Delivery of vehicle subject to registration.—No holder

6. The learned counsel for the Respondents, however, stated of a trade certificate shall deliver a motor vehicle to
that the vehicle had been delivered by the OPs to the a purchaser without registration, whether temporary
Complainant without registration and hence, there was or permanent.”

45 August 2017

Consumer Case Studies

11. It is evident, therefore, that the OPs should not have of the vehicle to the Complainant or to replace the said
delivered the vehicle to the Complainant without vehicle with a new one.
temporary or permanent registration number and, hence,
violation of Rule 42 on their part is duly proved from their 13. It may be observed here that the Petitioners have
own admission. admitted that the car was delivered at the residence of
Complainant No. 2 under extraordinary circumstances as
12. In so far as the grant of compensation to the Complainant per her demand and request and in good faith. The
is concerned, it is also admitted in the reply of the OPs Complainant has nowhere denied that she did not want
that when the vehicle was being taken to the RTO. for the delivery of the vehicle on that particular date. It is
the purpose of temporary registration, the accident did clear, therefore, that the Petitioners took the
take place with a cycle rickshaw, although the OPs have extraordinary step to fulfil the desire of the Complainant
stated that temporary registration number had been and in the process, committed violation of Rule 42 of the
obtained by that time. The dispute arose, as the Central Motor Vehicle Rules, 1989. The Complainant No.
Complainant insisted on getting a brand new car and not 2 is, therefore, also guilty of contributory negligence.
the vehicle damaged during the accident. It has come on
record, however, that the District Forum passed an order 14. Based on the discussion above, this revision petition is
on 24.08.2005, directing the OP-3/Petitioner to deliver partly allowed and the orders passed by the consumer
the car after repairing and to ensure that it was in good fora below, directing the Petitioner to pay an amount of
working condition, subject to the decision in the Rs. 3,94,662 to the Complainants is set aside, as there is
consumer complaint. The said car is reported to have no proper justification for the award of such an amount
been delivered to the Complainant accordingly and is in when the delivery of the vehicle was made to the
her possession. In the light of these facts, the order passed Complainant after repairs and the use of this vehicle since
by the District Forum, directing the OPs including the a long time, has not been denied by the Complainant
Manufacturer jointly and severally to pay a sum of anywhere. However, since the accident took place while
Rs. 3,94,662 as the total value of the car including the car was in the custody of the personnel of the
expenses, to the Complainant is not based on any sound, Petitioner and also considering the violation of Rule 42
logical reason. In appeal before the State Commission, of CMVR, 1989, it is found appropriate that a lump-sum
the said order was modified and it was stated that the compensation of Rs. 25,000 is made by the Petitioner to
entire liability to make payment in terms of the order of the Complainant and I order accordingly. The said amount
the District Forum shall be upon the Petitioner dealer only. shall be payable by the Petitioner within a period of four
However, given the facts and circumstances of the case, weeks from today, failing which the Petitioners shall have
when the vehicle has already been delivered back to the to pay an interest @ 9% per annum for late payment.
Complainant after repairs, there does not seem to be any The Revision Petition stands disposed of accordingly.
justification for the award of the whole purchase value There shall be no order as to costs

MARIKAR GROUP OF CONCERNS

DSK Benelli Motowheels Pvt Ltd - Benelli Motorcycles; Eicher Motors Ltd - Royal Enfield Motorcycles; Honda Motorcycle
& Scooter India Pvt Ltd - Honda Motorcycle & Scooters; Mahindra First Choice Wheels Ltd - Pre-Owned Cars; Nissan
Motor India Pvt Ltd - Nissan Cars and Datsun Cars; Skoda Auto India Pvt Ltd - Skoda Cars; Canon India Pvt Ltd - Canon

Products; Gabriel India Ltd; NXT Automart (India) Ltd - Drivol, Duracell, FIAMM, Bluechem; PETRONAS Lubricants (India)
Pvt Ltd; R&R Textile - Ramraj, Ramyyam; TIDC India Ltd; and Whirlpool of India Ltd - Home Appliances.

Branches: Alappuzha, Aluva, Attingal, Chavakkad, Cochin, Irinjalakuda, Kalamassery, Kollam, Kozhikode, Kulasekharam,
Marthandam, Nagercoil, Nedumangad, Pathanamthitta, Thrissur, Trivandrum and Varkala.

Phone: 0471 - 2477420, 2471814, 2465882 | Hotlines: 9961 88 9000 | Fax: 0471 2462630 | E-mail: [email protected]

August 2017 46



PASSENGER VEHICLE SALES - JULY 2017

Domestic Sales July-17 July-16 Growth Y-o-Y (%) Exports July-17 July-16 Growth Y-o-Y (%)
17,657
OEM 1,120 560 100.00 OEM 7,941 10,666 65.54
179 Ford India
Fiat India 259 -30.89 General Motors 350 6,875 15.51
Force Motors 8,418 Honda Cars 12,308
Ford India 565 7,076 18.97 Hyundai Motor 120 191.67
General Motors 66 Isuzu Motors 16
HM Finance Corp 1,528 -63.02 Mahindra 522
Honda Cars 17,085 Maruti Suzuki 11,256
Hyundai Motor 43,007 44 50.00 Nissan Motor 4,489 14,606 -15.73
Isuzu Motors Renault India 988
Mahindra 252 14,033 21.75 Tata Motors 165 --
Maruti Suzuki 20,962 Toyota Kirloskar 1,722
Nissan Motor 153,298 41,201 4.38 Volkswagen 8,964
Renault India 4,360 Total 66,378
Skoda Auto 8,964 87 189.66 1,240 -57.90
Tata Motors 1,417
Toyota Kirloskar 16,793 17,356 20.78 11,028 2.07
Volkswagen 17,758
Total 4,753 125,764 21.89 7,637 -41.22
298,997
6,418 -32.07

11,968 -25.10 772 27.98

965 46.84 339 -51.33

15,756 6.58 1,343 28.22

12,404 43.16

4,301 10.51 7,223 24.10

259,720 15.12 61,849 7.32

Domestic Sales + Exports

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

Fiat India 1,120 560 100.00 Segment wise (Domestic Sales + Exports)
Force Motors 179 259 -30.89
Ford India 17,742 46.97 Category July-17 July-16 Growth Y-o-Y (%)
General Motors 26,075 8,403
HM Finance Corp 8,506 1.23 Cars 243,837 224,845 8.45
Honda Cars 44 50.00
Hyundai Motor 66 14,153 23.19 UVs 102,081 78,421 30.17
Isuzu Motors 17,435 55,807 -0.88
Mahindra 55,315 208.05 Vans 19,457 18,303 6.30
Maruti Suzuki 87 15.53
Nissan Motor 268 18,596 20.30
Renault India 21,484 136,792 -37.04
Skoda Auto 164,554 14,055 -21.88
Tata Motors 12,740 46.84
Toyota Kirloskar 8,849
Volkswagen 9,952 965 5.36
1,417 16,095 41.70
16,958 13,747 19.03
19,480 11,524
13,717 13.62
321,569
Total 365,375 Total 365,375 321,569 13.62
Source: SIAM

August 2017 48

TWO-WHEELER SALES - JULY 2017

Domestic Sales Exports

OEM July-17 July-16 Growth Y-o-Y (%) OEM July-17 July-16 Growth Y-o-Y (%)
Bajaj Auto 164,915 100,267
H-D Motor 174,324 -5.40 Bajaj Auto 111,203 -9.83
Hero MotoCorp 261 960
HMSI 611,307 319 -18.18 H-D Motor 11,962 603 59.20
India Kawasaki 511,960 520,559 17.43 Hero MotoCorp 32,569
India Yamaha 429,551 19.18 HMSI 15,792 11,554 3.53
Mahindra 2W 162 74.19 India Yamaha
Piaggio 66,135 93 284 24,333 33.85
Royal Enfield 65,236 1.38 612
Suzuki 2,401 1,302 12,533 26.00
Triumph 5,266 5,903
TVS Motor 63,157 6,269 -61.70 Mahindra 2W 43,940 2,123 -86.62
34,037
Total 2,142 145.85 Piaggio 541 13.12
58 52,128 21.16 Royal Enfield
219,396 19,039 78.78 Suzuki 1,250 4.16
-13.43 TVS Motor
67 6.19 5,663 4.24
206,605
33,040 32.99

1,679,055 1,476,332 13.73 Total 213,591 202,843 5.30

Domestic Sales + Exports

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

Bajaj Auto 265,182 285,527 -7.13

H-D Motor 1,221 922 32.43

Hero MotoCorp 623,269 532,113 17.13

HMSI 544,529 453,884 19.97

India Kawasaki 162 93 74.19

India Yamaha 81,927 77,769 5.35

Mahindra 2W 2,685 8,392 -68.01 Segment wise (Domestic Sales + Exports)

Piaggio 5,878 2,683 119.08 Category July-17 July-16 Growth Y-o-Y (%)
Scooters/ 596,121
Royal Enfield 64,459 53,378 20.76 Scooterettes 528,372 12.82

Suzuki 39,940 24,702 61.69 Motorcycles/ 1,234,994 1,073,856 15.01
Step-Through
Triumph 58 67 -13.43

TVS Motor 263,336 239,645 9.89 Mopeds 61,531 76,947 -20.03

Total 1,892,646 1,679,175 12.71 Total 1,892,646 1,679,175 12.71
Source: SIAM

49 August 2017


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