F A D A Journal - March 2018

Office Bearers contents

President PRESIDENT’s MESSAGE 7 Commercial Vehicle is Flavour of the Month
INDUSTRY TRACK 8 Momentum in Auto Sales, Stays on Course
JOHN K PAUL
Popular Vehicles & Services Pvt Ltd INDIAN ECONOMY 10 CPI Inflation Eases to 4.44% in February’18;
Kuttukaran Centre, Mamangalam, Kochi Food Inflation at 3.26%
Tel: +91-484-234 1134 / 7872 / 5013
E-mail: [email protected];

[email protected]

Vice President OPINION 12 • ICRA Ups Revenue Growth Estimate for Auto Component Industry
• New Scrappage Policy Unlikely to Perk Up Demand Significantly:
ASHISH KALE PERSPECTIVE CRISIL
Provincial Automobile Co. Ltd GROWING INDIA • NBFC Vehicle Loans to Grow 300 bps Faster Over the Next 3
Kingsway, Near Railway Station, Nagpur KNOW OUR MEMBER Fiscals: CRISIL
Tel: +91 98226 96777
E-mail: [email protected]; 15 The World’s New Vehicle Market: Outlook for 2018
- Automotive World
[email protected]
21 China Joins Race for Booking Indian Car Market
CEO - Rishi Iyengar, India Editor, CNN

SAHARSH DAMANI 23 Goldrush Sales & Service Ltd, Lucknow
Federation of Automobile Dealers Associations
805, Surya Kiran, 19, K G Marg, New Delhi INSIGHT 24 Business Process Outsourcing in Automotive Industry
Tel: +91-11-6630 4852, 2332 0095 F A D A NEWSLINE - ALLSEC Technologies
E-mail: [email protected]; [email protected]
Web: fada.in 26 F A D A Delegation Meets Union Minister for Heavy Industry & PE
F A D A Confers Life Time Contribution Award to Venu Srinivasan

ADVERTISERS’ INDEX UPGRADES & VARIANTS 28 • Honda Unveils 2018 Editions of CB Shine SP, Livo & Dream Yuga
• Mercedes Launches Country’s First BS VI Vehicle, New S-Class

Back Cover 56 NEWS BASKET 30 • Maruti Suzuki Alto Scales Cumulative Sales of 35 Lakh
DriveU CONSUMER CASE STUDIES • TVS Motor Rolls Out Race Edition of Apache RTR 200 4V
• Mahindra and Ford Sign MoUs to Co-Develop Midsize and
Front Inside Cover 2 NEW DEALERSHIPS Compact SUV, Electric Vehicle and Connected Car Solutions
Tata Capital Financial Services
FAMILY BUSINESS 32 NCDRC : Kinetic Motor Co. Ltd & Anr - Petitioners Versus
COMPETITION LAW Raj Kumar Rai & Ors & Ors - Respondents

Back Inside Cover 55 34 • Volvo Car Expands its Footprints in India
Tata Motors • Tata Motors Expands CV Network in Gujarat
• India Yamaha Motor Unveils its 9th Dealership in Uttarakhand
Inside Pages • Ford Inaugurates Novelty Ford in Amritsar

• Mahindra & Mahindra Financial Services 3 36 Continuity of Family Business Across Generations
- Navneet Bhatnagar and Kavil Ramachandran
• AMPL 4

• United Group of Institutions 6 41 Competition Law Updates - G R Bhatia

• Marikar Group 11

• Shri Ram Transport Finance 19 NADA MUSINGS 42 Major developments affecting Automobile Industry in US

• Satyam Centre of Professional Excellence 22

• Provincial Group 38 SURVEYS & STUDIES 46 White Remains Most Popular Car Colour Globally
- Axalta Global Automotive 2017 Colour Popularity Report
• Maurya Motors 40

• Bagga Link 50 SALES REPORT 48 Vehicle Sales & Exports and Y-o-Y Growth - February 2018

• Popular Vehicles & Services 51

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



president’s message

Commercial Vehicles is Flavour of the Month!

Dear Dealer Colleagues,

To begin with, let me give some good news. The private forecaster, Weather Risk Management Services
(WRMS) has said that the June – September rainfall, which is better known as South West Monsoon,
would be largely on the ‘positive side of normal’ (normal to above normal). This will have a direct
impact on the Auto Sales and we should start planning our inventories keeping this news in mind!

The Auto Sector witnessed a mixed bag during the month of February 2018. While the new launches in
passenger vehicles tried to keep the momentum going, fuel price rise, inflation and a spike in interest
rates have played a dampener for the overall industry. Increasing urbanisation of rural India has
taken the two wheeler segment into the next orbit of sales and growth.

Due to the Government’s push for infrastructure development, streamlining of logistics and e-commerce sector post GST,
restrictions on truck overloading, stimulus package for replacement buying, better monsoons over the years leading to
better crop yields which in turn has raised the disposable income for the rural population, growth in commercial vehicles
segment has been bestowed with a new life!

The Ministry of Heavy Industry has come out with a Draft Auto Policy. Through this, the government intends to do the following:
1. Rollout a comprehensive long term roadmap for the automotive industry
2. Implement reduction in CO2 emissions through Corporate Average Fuel Economy (CAFE) regulations
3. Introduce a composite length and emissions based criterion for vehicle taxation
4. Harmonize standards over the next 5 years
5. Implement measures to increase exports of vehicles and components
6. Improve the skill development and training eco-system
7. Conduct a detailed study to assess the logistics challenges being faced by the auto industry
To achieve these in a synchronised manner, the Ministry for Heavy Industries and Public Sector Enterprises intends to create
a Nodal Body for the Automotive Industry. For taking into consideration Auto Retail Industry’s view and make F A D A, member
of this Nodal Body, we have been quick on our feet and have met various bureaucrats within the Ministry and the Hon’ble
Minister, Shri Anant Geete a few days back. Shri Geete was kind enough to give us a patient hearing and assured us that F A
D A will be a part of this body.
Reverting to F A D A activities, I am happy to share that after organising two successful Vyapars in New Delhi and Mumbai,
we are working hard to take Vyapar to other State Capitals. F A D A UP has been the front runner and we will be holding the
next Vyapar in Lucknow, sometime in June. We are also in discussion with other State Chapters and I am positive of holding
Vyapar in a few other locations which will get confirmed in the times to come.
F A D A is also in talks with Yes Bank and Indian School of Management & Entrepreneurship (ISME) regarding developing of
course structure and curriculum for F A D A Academy for skilling automobile dealerships, their leadership & on-ground
operations alike.
At the time of writing this article, NADA 2018 Convention is in progress and a large delegation of F A D A is attending the same
in Las Vegas. I am sure that once they return, we will have lots of new learning and best practices which we can adopt.
The Financial Year is coming to an end. While all of us will be busy achieving that monthly and annual ‘target’, I wish all of
you a progressive FY 2019!
With best wishes,
Yours sincerely

John K Paul

7 March 2018

INDUSTRY TRACK

Momentum in Auto Sales, Stays on Course

Auto industry’s sale momentum continued in February 2018. Hyundai Motor India Ltd (HMIL), the country’s second largest
The month saw total sales of automobiles including exports car manufacturer and the largest passenger car exporter
growing at 23.23 per cent. Overall the industry sales in the achieved total sales for February 2018 stood at 55,422 units
domestic market was in positive terrain with CVs, 2-Wheelers as against 52,734 units in February 2017 rising 5.1 per cent
and 3-Wheelers achieving double digit growth compared to y-o-y. The domestic sales accounted for 44,505 units as
sales during the same month, the previous year. against 42,327 units in February 2017, while the exports
While the passenger vehicles sales grew on back of new grew by 4.9 per cent from 10,407 vehicles a year ago to 10,917
models, the rising fuel prices, inflation and a spurt in interest units in February 2018.
rates silted sales of the industry as financial year 2018 nears Toyota Kirloskar Motor (TKM) sold a total of 12,729 units in
closure. Rise in passenger vehicle prices by some OEMS in the month of February 2018. TKM sold 11,864 units in the
January also had a tepid impact on sales. domestic market & exported 841 units of the Etios series. The
However, with the pick-up in the manufacturing sector and in company sold a total of 11,543 units in the domestic market
overall spending helped the economy to recover with the GDP and exported 570 units of the Etios series in February 2017.
growing 7.2 per cent in the quarter ending December 2017. Commenting on the sales performance, N Raja, Dy MD, TKM
The semi-urban and rural regions growing preference for said, “We are happy that we have been able to sustain the
scooters as well as for motorcycles stimulated the recovery positive growth trend registering a 3per cent growth in
and boosted the growth of two-wheelers. February. We have started the year 2018 on a positive note
Infrastructure development, streamlining of the logistics & with a cumulative growth of 11per cent in the first two months
e-commerce sectors post GST, restrictions on truck overloading of Jan – Feb 2018.
and stimulus to replacement buying have provided the much The National Auto Policy Draft has been very encouraging
needed boost to the growth of M&HCV segment. LCV market with a clear focus and push towards ‘technology agnostic’
also acquired double digit growth propelled by two years of green mobility roadmap. We are optimistic that such
consecutive good monsoons which resulted in better crop measures to promote cleaner and greener technologies will
yield and placed more disposable income in the hands of further promote the Hybrid technology and rationalize the
rural populace. GST structure for automobiles.”
Passenger vehicles stayed in course and grew moderately by Domestic sale of both Nissan India and Renault India headed
7.77 per cent in domestic market, while the exports de-grew southward selling 4,738 units (February 2017: 4,807 units)
marginally by 1.0 per cent during the month. and 7,305 units (February 2017: 11,198 units) respectively
Car market leader, Maruti Suzuki India Ltd led the charge during the month.
selling a total of 148,438 vehicles in February 2018, including Ford India’s total sales in February stood at 23,965 vehicles
11,790 units of exports, as against a year-ago sales figure of as compared to 24,026 vehicles in the same month last year.
130,101 vehicles, which translates into a growth of 14.1 per The company’s sale in India grew by 8.4per cent to 9,041
cent. Domestic sales at 136,648 units were up 13.3 per cent, vehicles in February from 8,338 vehicles in the same month
while exports at 11,790 units surged 24.1per cent y-o-y. last year. Exports were at 14,924 units compared to 15,688
Sales of mini segment cars, including Alto and Wagon R, vehicles in February 2017.
witnessed a 2.1 per cent uptick to 33,789 units during “Improvements in GDP growth and other industry indicators
February 2018 against 33,079 units in February 2017. The continue to support the year on year growth of the auto
compact segment of MSIL featuring offerings like Swift, Ignis, industry,” said Anurag Mehrotra, President & MD, Ford India.
Celerio, Baleno, Dzire, Tour S posted a growth of 38.7 per cent “However, there are headwinds in terms of impending
during the month. The Company’s mid-sized sedan Ciaz increase in interest rates, crude prices, and inflation. We
continued to head southwards to 16.8 per cent selling 4,897 also believe the increase in customs duty and the cess of
units (February 2017: 5,886 units) in February 2018. exports will drive up prices, with a potential of impacting
Sales of Maruti’s utility vehicles, including Gypsy, Grand demand.”
Vitara, Ertiga, S-Cross and compact SUV Vitara Brezza Tata Motors’ sales (including exports) of commercial and
increased by 13.8 per cent to 20,324 units in February 2018, passenger vehicles in February 2018 stood at 63,761 units, a
from 17,863 units in the same month of 2017. 34.0 per cent increase y-o-y. The domestic sales of Tata

March 2018 8

INDUSTRY TRACK

commercial and passenger vehicles at 58,993 units in 511,954 units sold in February2017. The company’s exports
February 2018 were up 38.2 per cent over 42,679 units sold aggregating 24,242 units were also on the fast track, clocking
a year ago. a 92.1per cent growth y-o-y.
Tata Motors’ PVBU reported a total sales volume of 20,022 Bajaj Auto Ltd’s domestic two-wheeler sales volume of
units in domestic market during February 2018, a 43.5 per 175,489 units in February 2018 grew by 23.3 per cent from
cent increase compared to 13,957 units in February previous 142,287 units in February 2017. Bajaj two-wheeler exports
year, due to the increasing demand of Tiago and Tigor along at 122,025 units were up 18.9per cent y-o-y.
with Nexon and Hexa gaining traction in the steadily growing Buoyed by a robust increase in scooter and motorcycle sales,
UV Segment. The Passenger Car segment registered a strong TVS Motor Company registered significant growth of 36.9
growth of 17.0 per cent while the UV segment grew by 165.0 per cent in February 2018, clocking total two wheeler sales
per cent clearly showing a trend of growing customer base of 280,942 units against 205,199 units a year ago. Domestic
across segments. Cumulative sales growth of Passenger sales of TVS Two-Wheelers rose 33.5 per cent to 230,353
Vehicles in the domestic market (April 2017-February 2018) units in February 2018 from 172,611 units in February 2017.
was at 167,055 units compared to 137,718 units, a growth of TVS exports recorded a staggering growth of 55.2 per cent
21 per cent over last year. TML’s exports totaling 342 units in with exports of 50,589 two wheelers in February 2018 vis-à-
February 2018 were down by 97.7 per cent y-o-y. vis the export figure of 32,588 two-wheelers a year ago.
The company’s sales of commercial vehicles in February 2018 Honda Motorcycle & Scooter India (HMSI) continued to move
in the domestic market aggregated 38,971 units, a 35.7 per up the growth curve with its domestic sales of two-wheelers
cent growth compared to 28,722 vehicles sold in February rising by 32.3 per cent to 489,638 units and exports by 28.2per
last year. The growth accrued on the back of robust cent to 30,144 units in February 2018.
infrastructural developments, fresh tenders in car carriers, Royal Enfield clocked 71,354 units of motorcycle in domestic
coal movement and the petroleum sector. The growth was sales in February 2018 compared to 56,737 units of
also bolstered by increasing demand from construction, motorcycle sold in February 2017 a rise of 25.8 per cent. The
growing logistics, e-commerce and FMCG applications. company’s export also grew marginally by 1.2 percent to 1,723
Tata LCV sales grew by a healthy 46.3per cent to 20,027 units units (February 2017: 1,702 units).
during February 2018 aided by an increased thrust in Suzuki Motorcycle India has clocked 46,147 units in domestic
Agriculture based, FMCG and E-commerce sectors. Increasing sales; and 5,684 units in exports; taking the overall tally for
demand for container and refrigerated trucks also led to this the month to 51,831 units. This performance represents a
growth. While M&HCV sales added up to 18,944 units, a decent domestic Y-O-Y growth of 37.2per cent; and an overall growth
26 per cent growth over February 2017. of 28.7per cent.
Mahindra & Mahindra continued on a high growth trajectory. Sajeev Rajasekharan, EVP, Sale & Mktg, Suzuki Motorcycle
M&M’s utility vehicle sales in domestic market clocked 7.4per India, said, “The year 2018 has proved to be a very successful
cent uptick to 20,977 units from 19,529 units a year ago. The year for Suzuki Motorcycle India as we have surpassed the 5
company’s domestic CV sales at 20,946 units also saw a lakh unit sales milestone. Backed by a robust product
27.9per cent growth y-o-y. In 3-wheeler segment too, the portfolio that is leveraging from the paradigm shift in
company witnessed an impressive growth of 50 per cent to customer preference towards premium motorcycles and
5,138 units from 3,426 units in February 2017. premium scooters, we are now geared up towards ending the
In tune with the growth witnessed in CV market, Ashok Leyland financial year on a strong-note, and build on this foundation
clocked a uptick of 30per cent with domestic sales of 17,213 for future-growth.”
units during the month.
VE Commercial Vehicles Ltd (A Volvo Group and Eicher Motors The good thing is that the Indian economy is expected to
joint venture) sold 6,796 units in February 2018 as compared grow at 7.3 per cent in the next fiscal driven by private
to 5,379 units February 2017, recording a growth of 26.3 per consumption, increased investment in infrastructure, waning
cent. This included 1,013 units of exports during the month of the disruptions caused by GST rollout and exports. With
which had increased by a whopping 83.8 per cent. the economy on a growth trajectory, the auto market is
Hero Motocorp, the world’s largest two-wheeler manufacturer poised for a decent growth in the short and medium terms.
notched up a decent 18.2 per cent growth, selling 605,355 The industry and, manufacturing sector in particular, have
units in the domestic market in February 2018 against been consistently doing well for the last few months, which
augur well for overall auto market

9 March 2018

India economics

CPI Inflation Eases to 4.44% in
February’18; Food Inflation at 3.26%

CPI inflation came in at 4.4% YoY for February softer than
expected and 70 bps lower than last month, essentially
led by sharper than expected fall in vegetables inflation,
although the level of vegetables inflation is still running
close to 18%. Ex-vegetables, CPI inflation is broadly stable
around 3.7-3.8% for last few months.

Meanwhile, core inflation (ex-oil, precious metals) also
remains stable although somewhat elevated at 5.3%
mainly led by HRA allowance hike. Going ahead, the
important number to keep a watch at, will be the impact of
import duty hikes across agri-commodities (oilseeds,
pulses, wheat, etc.) on the domestic food inflation. So far,
this impact has been muted. CPI inflation softens led by
vegetables

CPI inflation for February 2018 came in at 4.4% YoY, softer
than expected 4.7% and much lower than January reading
of 5.1%. The decline over the last month was essentially • Inflation in vegetables reached 17.6% in February
led by reversal in vegetables inflation after a sharp spike 2018, much lower than 26.9% recorded in the previous
in the previous few months. Still vegetables inflation month and higher than (-) 8.2% in February 2017.

stands at 18% and will likely soften further. • Fruit prices grew by 4.8%, the lowest level witnessed
in the last three months.
On the other hand, pulses remain in deflation for 15
months now given the glut situation in the commodity. • Sugar prices witnessed a contraction of (-)0.3% in
Outside vegetables and pulses, the food inflation eased a February 2018 compared with 2.9% and 18.5% growth
recorded in January 2018 and February 2017,
bit during the month to below 3% - a very benign level. respectively. This can be attributed to rising domestic
Notably, the impact of import duty hikes by the government
in several agri-commodities (wheat, pulses, oilseeds, sugar production.

sugar) is not yet seen in the domestic food inflation. • Inflation in pan and tobacco at 7.3% was marginally

• Food and beverages recorded an inflation of 3.4% in lower than 7.6% in January 2018, however, remained
higher than 6.25% recorded in the corresponding
February 2018, lower than 4.6% in the previous month period last year.
and higher than 2.4% in February 2017.

• Inflation in fuel & light eased
marginally from month ago
level of 7.7% but remained
much higher than 3.9%
witnessed in February 2017.

• Inflation in clothing and
footwear has remained in the
range of about 4.5- 5% since
August 2017.

Source: MOSPI and F A D A Research • Inflation in housing at 8.3%
continued to remain at
higher levels compared with
4.9% recorded in Feb’17.

March 2018 10

India economics

Core CPI largely stable Unwinding GST-led squeeze, strong exports helping the
Core CPI, ex-commodities – fuel and precious metals, rebound
remained largely stable around 5.2-5.3% levels for last 3- The recovery in IIP was mainly due to three factors. First is
4 months. Hike in HRA allowances is keeping the level of the low base effect of Demonetization and unwinding of GST-
core inflation slightly elevated but going ahead, its impact led squeeze on production activity. Hence, when analyzed on
will begin to fade and housing inflation should ease. Among two-year CAGR basis, the trend growth is 5.5% in
other components, the inflation is either stable or is manufacturing vs. 9% actual stated. Nonetheless, this is still
marginally softening especially in personal care a recovery. Second is the tailwind from rebound in global
categories which could perhaps be the result of cuts in trade, especially in capital-intensive sectors, such as, autos,
GST rate in some of these categories. In any case, core metals, oil etc. Third is easier financing conditions of
inflation does not seem to be a cause of concern. households which is helping boost consumption in high-ticket

items, such as, autos, etc.
However, labour-intensive
sectors, such as, textiles and
gems & jewellery, continue to
contract.

Fading disruptions, low base
effect to support IIP going
ahead

IIP: Remains strong Source: MOSPI and F A D A Research Going ahead, base effect will
be supportive and IIP recovery
IIP for January 2018 at 7.5% was higher than the general should continue. However,
estimate of 6.5% and is the third consecutive month of there remain some headwinds.
above 7% growth. Manufacturing and electricity growth of First is on labour intensive
8.7% and 7.6%, respectively, were strong, while mining front, where persistent weakness could weigh on
growth was subdued at 0%. consumption. Second is the financing conditions could
tighten owing to the recent banking scam and rising interest
rates. Exports remain the key engine of recovery and its
sustenance is extremely important. To that extent, trend in
global trade and PMIs become the key monitorables

11 March 2018

Opinion

ICRA Ups Revenue Growth Estimate for Auto Component Industry

Auto components industry to register higher growth of 13- to offset the commodity pressure by improved operating
15% for FY2018 backed by robust OEM demand leverage benefits. Over the last two quarters, vendors
The demand for auto components from domestic OEMs, dependent on M&HCV and 2W have performed well with most
especially high volume 2W and passenger vehicle (PV) of them registering double digit growth in revenue. Several
industry which together constitute about two-third of overall auto ancillaries, especially those dependent on steel have
ancillary industry size, has remained strong in Q3FY2018. also witnessed Y-o-Y decline in raw-material cost during
Moreover, stellar growth in CV as well as tractor segment Q3FY2018, due to range bound steel prices over last 2-3
has further supported overall volume growth. The growth quarters and ancillaries ability to pass on price escalation
momentum is expected to sustain in Q4FY2018 as well. This to its customer (OEMs) in the interim. Overall, OPM of sample
will be strongly supported by improved demand outlook in space expanded by 41bps Y-o-Y to 14.1% primarily driven by
key end user segments as well as expected pickup in rural improved operating leverage.
income. Going forward, pickup in infrastructure activity will ICRA expects industry-wide credit trends to remain stable,
further drive growth in construction & mining equipment as supported by robust demand from the OEM segment in the
well as the tipper segment (classified under M&HCVs). near term, supported by healthy cash accruals, gearing as
Subrata Ray, Sr Group VP, Corporate Sector ratings, ICRA, said, well as coverage indicators for the industry have improved
“During Q3FY2018, auto component vendors dependent on considerably over the past two years. This, despite the fact
CV and 2W segment witnessed double digit growth in volume, that the industry has been on a consolidation mode over the
which along with improved realization due to increase in last two years, taking steps towards deleveraging their
commodity prices resulted in strong revenue growth. balance sheet, given the surplus capacity. However, select
However, while domestic PV demand remained strong, muted OEMs are exploring inorganic growth opportunities in India
PV exports has dragged overall PV production volume growth as well as in overseas market to support growth.
during the last two quarters. We expect PV exports related As for the industry outlook, Ray added, “ICRA research has
aberration to abate during coming quarters, and it will be revised upward its revenue growth estimate from 9-11% to
more than offset by robust demand momentum in domestic 13-15% for FY2018e in the backdrop of robust growth
market, effectively supporting auto component demand.” expectation in domestic PV, CV, tractor and 2W segment.
With 25% contribution to the overall, auto components Revenue growth will be also supported by steady increase in
exports from India remain significant. Together the USA and the commodity prices and consequent impact on the
EU markets has accounted for 60% of total auto component realization. Considering the increasing content per vehicle
exports from India. With the US heavy commercial vehicle due to various technological advancement as well as
(HCV), especially class-8 trucks witnessing strong order regulatory measures (emission, safety regulations), the growth
inflow (+49.7% Y-o-Y) during CY2017, the benefits of improved in the auto component industry will be relatively higher than
order inflow have already started accruing to component the underlying growth in the automotive industry in the
suppliers for US HCV market. Consequently, exports to the medium to long term. The revenue growth of auto ancilliaries
USA CV space is expected to grow over the near term. The is expected to be at 11-13% for FY2019e, given healthy growth
European PV and CV registration numbers too have witnessed expected across key automotive sub-segments as well as
marginal growth in CY2017; however the outlook for this commodity price impact on realization. We maintain our 10-
geography is relatively muted. 12% long term (5 year) CAGR expectation for Indian auto
ICRA’s sample of 48 auto ancillaries, comprising around 26% component industry.”
of the industry’s turnover, grew 18.5% revenue-wise during Over the medium to long term, growth in auto component
Q3 FY2018. The same appeared stronger on low base of last industry will be higher than the underlying automotive industry
fiscal, where overall performance was impacted by growth, given the increasing localisation by OEMs, higher
demonetization. Overall, during 9MFY2018, the sample space component content per vehicle and rising exports from India.
grew by 12.3%, which was better than the earlier 9%-11% In line with ICRA’s previous forecast, operating margin dipped
growth estimate for FY2018e. below 15% level during FY2017 and it is likely to moderate
Though rising commodity prices trends over the last 4-5 further in FY2018. The same is expected to be ~13%-13.5% in
quarters has pressurised profitability of auto ancillaries due the medium term as compared to earlier sub-12% level
to Y-o-Y increase in RM expenses, most player have been able witnessed prior to FY2012 owing to a richer product mix and
rising revenues from the profitable aftermarket segment

March 2018 12

Opinion

New Scrappage Policy Unlikely to Perk Up Demand Significantly: CRISIL

The much-awaited vehicle scrappage policy has received a a life of ~20 years, would be eligible under the scrappage
go-ahead from the Prime Minister’s Office and is awaiting scheme. Under MHCVs, medium commercial vehicles (16
approval from the Goods and Services Tax (GST) Council. As tonne gross vehicle weight) would benefit the most, while the
per the draft policy released by the Ministry of Road number of multi-axle vehicles, intermediate commercial
Transport and Highways (MoRTH) on May 26, 2016, vehicles vehicles (ICVs), tractor trailers, and light commercial vehicles
older than 15 years were eligible for benefits under the opting for the scheme would be very limited.
scrappage scheme. However, as per the latest update, only While the vehicle scrappage policy was expected to be
vehicles older than 20 years will be eligible to opt for the implemented in the near term, the government intends to
scheme from April 1, 2020. enforce the policy from April 1, 2020, which will coincide
MoRTH’s earlier draft note on Voluntary Vehicle Fleet with the implementation of BS VI norms. Though the benefit
Modernisation Plan had proposed that vehicles bought on offered under the scrappage policy is expected to be ~15% of
or before March 31, 2005, would be eligible for the scheme the vehicle’s price, the effect will be muted as prices of diesel
and get 50% waiver on excise duty, scrap value of the truck vehicles are expected to go up by 10-15% once the new norms
and additional discounts from the original equipment come into force.
manufacturers. As per our estimates based on that draft note, The total population of commercial vehicles that will be
640,000 vehicles would opt for the scheme in the course of older than 20 years in fiscal 2021 would be ~50,000 vehicles,
three years of implementation. much lower than the government’s earlier estimate of 2.8
As per the latest update, the two major changes made to crore vehicles and our internal estimate of 640,000 vehicles.
MoRTH’s earlier draft note are: In any case, 70,000-90,000 vehicles are scrapped every year.
1. Change in the age of the vehicle from 15 years to 20 years So, we believe the impact of the scrappage policy will be
2. Policy to be implemented from April 1, 2020, coinciding limited. However, the additional benefit from the scheme will
with the implementation of BS-VI norms prop up CV demand to some extent when vehicle prices will
If we look at the various vehicle segments in the commercial increase because of change in emission norms (from BS IV to
vehicles industry, very few vehicles would actually be older BS VI).
than 20 years in the current vehicular population. Medium Having said that, we await disclosure of the final benefits
and heavy commercial vehicles (MHCVs) that typically have from the scheme and approval by the GST Council to
understand the nuances of the policy further.

NBFC Vehicle Loans to Grow 300 bps Faster Over the Next 3 Fiscals: CRISIL

CV lending to remain NBFC dominated; foreign captives to gain share in auto finance

CRISIL expects vehicle finance portfolio of non-banking cost of transition to BS VI engines, which will have to be
finance companies (NBFCs) to grow 300 basis points (bps) managed. Additionally, intensifying competition from
faster over the three fiscals to 2020, clocking a compound private sector banks aggressively chasing retail assets and
annual growth rate (CAGR) of 15% compared with 12% seen public sector banks clawing back into contention after
in the past three fiscals. recapitalisation is a reality.

Growth would be driven by improving macroeconomic In terms of segments, around 85% of NBFC vehicle finance
environment coupled with higher Government focus on portfolio comprises commercial vehicle and cars / utility
infrastructure and rural areas. The market opportunity for vehicles (UVs) financing. The balance includes tractor and
NBFCs will stem from continued government investments in 2/3 wheeler financing. While all segments of vehicle finance
the roads sector, expected finalisation of the scrappage are expected to grow faster than before, commercial vehicle
policy or the Voluntary Vehicle Modernisation Programme financing, which constitutes 51% of the vehicle finance
and higher Budgetary spends for the rural sector. portfolio of NBFCs, is expected to rebound from the lows
But NBFCs will also face structural challenges such as the seen over the past several years and is expected to clock a
overhang of the GST implementation, impact of the dedicated CAGR of 14% till 2020, on account of which NBFCs would
freight corridors coming up in the west and east, and the retain their share of over 65% in the overall CV finance
market.

13 March 2018

Opinion

Light commercial vehicle (LCV) finance will steer this Increasing disposable incomes, sharper focus on Tier II
growth as the hub and spoke logistics model gains traction and Tier III cities, growing consumer preference for higher-
after the advent of GST, but the shift to higher tonnage value UVs, and improving penetration of formal finance
vehicles will also prop medium and heavy commercial are expected to propel growth.
vehicle (M&HCV) financing. Banks continue to dominate this segment with a share of
“NBFCs have carved a niche in the small fleet operator 63%, having gained 300 bps market share from NBFCs over
and first-time user/buyer segments of CV finance by the past four fiscals, due to their ability to offer lower
leveraging on their core strengths of customer yields and attract customers in the top 20 cities. However,
relationships, adaptability, local knowledge and within NBFCs, an interesting trend that has emerged in
innovativeness,” said Krishnan Sitaraman, Senior Director, recent years is the significant scale-up in business of
CRISIL Ratings. “ While banks will pose a threat in M&HCV foreign-owned captive NBFCs as compared to domestic
lending, LCV financing would continue to be dominated by NBFCs in the cars and UV financing market.
NBFCs. NBFCs’ LCV financing portfolio will grow at a CAGR Ajit Velonie, Director, CRISIL Ratings, said, “The ability of
of 16%, leading to a commanding 80% market share by foreign-owned captive NBFCs to offer attractive yields –
2020.” backed by de facto subvention from parent – means they can
The other major segment, cars and UV financing, which compete with banks. The upshot has been that foreign-owned
constitutes 34% of overall NBFC vehicle finance portfolio, captives have increased their market share by 500 bps over
is expected to clock a CAGR of 18% over the next 3 fiscals. the past 4 years in cars and UVs financing market.”

Attention: Members

Bombay Hight Court Refuses to Strike Down One Year
Transitional Credit Limitation

CENVAT Credit: Section 140(3)(iv): Placed restriction on the stocks being not more than one year old on the
appointed date for admissibility of input tax credit, a request the automobile dealers had been making for
reconsideration.

The Bombay Hight Court in its recent ruling, dismissed the writ petition challenging constitutional validity of
Section 140(3)(iv) of CGST Act and refused to strike down 1 year time limit for transitional credit availment. It held
that:

- For smooth transition from old indirect tax regime to GST regime, some arrangements were required to be
made and conditions with respect thereto be imposed; and

- 1 year limit has clear nexus with objective sought to be achieved by GST legislation and therefore, cannot be
struck down.

Referring to Supreme Court ruling in Jayam & Co. where it was held that when concession in form of Input Tax Credit
is given by a Statute, Legislature had power to make provision stating the form and manner in which such concession
is to be allowed and there was no right, inherent or otherwise, vested with dealers to claim ITC benefit.

The court further observed that transitional credit under GST law is a clear case of concession subject to fulfilment
of conditions stipulated u/s 140 of CGST Act.

It also found no force in petitioners’ plea of discrimination of dealers / traders vis-a-vis manufacturers & service
providers in violation of Article 14 of Constitution.

March 2018 14

PERSPECTIVE

The World’s New Vehicle Market: Outlook for 2018

Automotive World

LIGHT VEHICLE DEMAND In 2016, there was an inverse correlation between the size of
the demand increase and the size of the city, with Tier-1 cities
The global light vehicle (LV) market grew by a strong 4.5% in (where purchase restrictions apply due to congestion and
2016, following a 2.0% rise the previous year. The market pollution) seeing a 9.1% decline in sales while Tier-5 cities
reached a new peak of 91.3 million units, the seventh saw growth of nearly 18%.
consecutive year of peak demand. In 2017, demand growth has slowed to an estimated 2.8%
During the first ten months of 2017, the growth rate is over the first ten months of the year. Over the final two months,
estimated to have slowed to within the range of 2-3%, as we are expecting demand to drop below year-ago levels which
forecast in last year's edition of this report, putting the market were boosted by the expected ending of the tax cut.
on track for a 2.2% rise over the full year, taking it to 93.3 China’s LV market to show subdued growth in 2018, rising by
million units. under 1% as the market finds its natural level, having been
Slower growth is expected in 2018, in the range of 1-2%, taking boosted beyond its natural level over the past two years by
the market to 95 million units. In broad terms, the lower rate the changes in purchase tax rates.
of growth can be attributed to a slowing of growth in some of India
the markets, which have entered upturns in recent years, plus Following a 6.7% drop in LV demand during calendar 2013,
a continuing mild downturn in the USA. Indian LV demand rose by just under 1% in 2014. The recovery
gathered momentum during 2015 and again in 2016, when
Asia – The world’s largest sales region demand rose by 7.2% to 3.38 million units, a fresh peak for
the second successive year.
Asia remains the world's largest sales region by a substantial Over the full year 2017, LV demand is expected to be 9-10%
margin, with sales expected to reach over 43 million units in higher at 3.71 million units, a fresh peak for the market
full year 2017. China accounts for about 60% of the regional reflecting a buoyant economy helping to boost disposable
total which is forecast to rise by a net 1.2 million units in incomes, interest rate cuts, a competitive market place and
2017 due to increases in most of the region’s major markets. good availability of auto finance.
China The Indian economy is expected to accelerate further in 2018,
In 2016, China's LV market rose by 14.7% or 3.26 million growing by 7.4% compared with an expected 6.7% in 2017.
vehicles to a record 25.4 million units. The increase reflected This should support further growth in LV demand of 7-8%,
a generally strong economy and purchases brought forward taking the market to just under 4 million units. However, while
to avoid the expected ending of a cut in purchase tax. The tax the GDP forecast is strongly positive, we note that recent
rate for some LVs was cut from 10% to 5% in October 2015 forward-looking indicators for both consumers and
and was due to return to 10% from January 2017, but in late businesses have been weak. Local commentators suggest that
2016 the government announced a change of plan, this may reflect some uncertainty following the introduction
introducing an interim rate of 7.5% for 2017 before resuming of a new goods and services tax regime (GST) which began to
the 10% rate in 2018. be implemented in July 2017. Given the macro-economy’s
strong performance, we are accepting that the weak forward
indicators may be just a temporary blip, but will be monitoring
the market closely to see if the risks to the forecast increase.

Japan

Asia’s second largest LV market, Japan, is set to grow in 2017
following declines in the two years to 2016. The market grew
by 6-7% over the first ten months of 2017, despite a 1.7%
drop in October due to Nissan suspending production and halting
some shipments due to irregularities in its inspection procedures.

The market had been expected to be adversely affected by a
2.0 pts increase in Japan’s consumption tax from 8% to 10%

15 March 2018

PERSPECTIVE

planned for April 2017. However, in June 2016, Middle East – politics and oil
Japan’s government announced the tax increase
would be delayed (for a second time) to 2019, LV demand in the Middle east is expected to be 6-7% lower in
thereby removing a (relatively minor) demand 2017 at around 3.9 million units, with most markets in the
distorting factor. region experiencing a decline as the oil-producing economies
Although the long-term prospect for the Japanese are affected by the relatively low oil price (for much of the
market is one of gentle decline, we expect some year) and/or OPEC-guided restrictions on production to boost
improvement in 2018, a view supported by forward- that price. Iran, the region’s largest market, which is expected
looking indicators such as: to see its second-successive year of double-digit increase in
• consumer confidence - which has been 2017 as a result of the lifting of sanctions at the start of
2016. Lower, but still positive, growth is expected for 2018.
trending upwards as the year has progressed Elsewhere in the region, demand in the second-largest market,
and in October reached its highest level since Turkey, is expected to fall by 4-5% in 2017 to around 942,000
September 2013; units. Another headwind in 2018 will be the introduction of
• manufacturing PMI - which in November higher tax rates on cars, and we expect this to cause a further
reached its highest level since March 2014; 4-5% drop in the market.
• services PMI - which in October reached its highest level In the region’s third-largest market, Saudi Arabia, LV demand
since August 2015. is expected to fall by around 20% in 2017 as the economy
A small boost towards the end of 2018 from sales brought continues its adjustment to lower oil prices or lower
forward to avoid the 2019 increase in consumption tax. production volume and the government slashes public
Other Asia spending in an attempt to reduce its fiscal deficit. As part of
Across the next five largest Asian markets, an increase of 2- that fiscal adjustment, it is planned to introduce a new 5%
3% is forecast for 2018, following a smaller rise in 2017. consumption tax in 2018 and expected that new tax to cause
a further drop in sales over the early part of 2018.
NAFTA – growing, but slowing Across the Middle east, LV demand is expected to rise by 4-
5% in 2018.
NAFTA is expected to remain a small drag on the global LV
sales result in 2018, as the USA enters its second year of a South America – recovery position
mild downturn and Canada also sees a small decline after
exceeding 2 million units for the first time in 2017, which is South America appears to have entered its recovery phase in
forecast to represent the market’s 8th successive year of growth. 2017, with regional GDP expected to reach 1.2% following
minus 0.9% growth in 2016. This improvement is reflected in
EU+EFTA – further growth in 2018 LV demand, which is expected to rise by 11% over the full year
to 4.3 million units.
The EU+EFTA markets rose by 7.1% in 2016, the third year of
increase after six consecutive years of decline following the
credit crunch. In 2017, the recovery is continuing but the
pace of growth is slowing and expected to be around 4% over
the full year - in line with our year-ago forecast.
Spain is expected to see the largest percentage increase in
2017, closely followed by Italy. The UK is the only major
market in the region to see a decline in sales during 2017,
having entered its post-credit-crunch recovery phase much
earlier than most of its peers. It seems that in its car market,
as with its wider relations with its EU+EFTA neighbours, the
UK is ploughing its own furrow.
The central and eastern members of the EUropean Union are
all expected to report increased LV sales for 2017; indeed,
most of these markets should see double-digit increases.

March 2018 16

PERSPECTIVE

Brazil is accounting for 50-60% of demand. Following four India
years of decline, the Brazilian market is expected to rise by India's truck market has long displayed greater volatility
about 10% in 2017 taking the market back above 2.0 million than the LV market with an average annual change (plus or
units and a further double-digit increase is expected in 2018. minus) of 24% over the past 23 years. It is notable that all the
In the region’s second largest market, Argentina, the recovery periods of falling sales during that time - 1997-1998, 2000-
began in 2016 and, as expected, has gathered momentum in 2001, 2008-2009 and 2012-2013 - lasted just two years.
2017 with further growth expected in 2018. Truck demand was relatively stable in 2016, growing by 5%
to 293,000 units, having grown by 28% the previous year. In
Eastern Europe & Central Asia – driver assistance the early months of 2017, the expected pre-buy in advance of
the new BS-IV emissions standard in April 2017 did not
Demand growth in Russia, which typically accounts for materialise, largely due to uncertainty over the introduction
around 85% of demand in the region, began turning positive of the Goods and Services Tax (GST) and to the surprise
at the end of 2016. The recovery is expected to be sustained demonetisation of late 2016.
over the full year of 2017. In 2018, the LV market is expected The weaker-than-expected pre-buy activity caught out the
continue growing, again supported by a combination of large truck OEMs. Both Ashok Leyland and Tata Motors were
economic recovery and government incentives or subsidies. consequently left with inventory of BS-III vehicles after the
Growth of 12-13% is forecast to take the market to around April 1st implementation date. The companies had expected
1.8 million units – still a long way short of its peak level of to be allowed to sell their BS-III vehicles after that date - a
nearly 3 million units. usual practice in most markets given the unpredictability of
demand. However, in March 2017, India's supreme court
Africa – limited growth banned the sale of BS-III vehicles from April 1. The OEMs
were faced with three options: upgrading the unsold stock to
African demand is expected to decline marginally in 2017, BS-IV specification, exporting them to markets with lower
as small improvements in the region’s largest market, South emission standards or dismantling the unsold vehicles, using
Africa, and second-largest, Morocco, are offset by significant the parts either for new production or for spare parts.
declines in markets such as Algeria, Libya and Nigeria. Despite the weak start to the year, and some subsequent
The region is expected to grow by 5-10% in 2018. disruption at the time of GST implementation, truck demand
is expected to rise by around 4% in 2017. Positive factors for
TRUCK DEMAND 2017 and beyond include:
• the net effect of the GST changes is a small reduction in
Global demand for >6t trucks is expected to rise by an
exceptionally strong 15-16% in 2017, taking demand to an the effective tax rate from 30.4% to 28%;
all-time peak of 3.21 million units. • the strong economy;
The forecast for 2018 is again dominated by developments • higher freight rates;
in China, as an expected settling back of demand in that • increasingly tight enforcement of overloading regulations;
market more than offsets the expected increases in other • a recovery in India’s mining sector, which is a key market
regions, leaving global demand 6-7% below the exceptionally
strong result for 2017 (forecast). for tipper trucks.
The Indian economy is forecast to grow by 7.4% in 2018, up
Asia – driven by China and India from a forecast 6.7% in 2017. Truck demand growth is also
expected to accelerate, rising by 5% to a new peak of 320,000
China units. The forecast includes some expected support from a
The Chinese market remains the world's largest by a planned scrappage programme.
substantial margin, with forecast sales of around 1.36 million
units in 2017, up by an unexpectedly strong 41% from 2016. NAFTA – positive momentum going into 2018
The growth in demand during 2017 partly reflects a healthy
level of freight demand and higher construction activity. The NAFTA truck market is strongly cyclical, typically taking
However, a more significant factor has been new weight and ten years to move from peak to peak or trough to trough,
dimension regulations, which became effective in September although this can vary by two or three years. The cycle is
2016 and limits the size, weight and loads for trucks. The there as a trend, but will always be influenced by prevailing
new regulation is being tightly enforced and has led to some circumstances. For example, pre-buying in advance of
road transport capacity bottlenecks and higher fees. This, in
turn, has encouraged operators to expand their fleets.

17 March 2018

PERSPECTIVE

emissions changes or, in the most recent trough, extreme Governments in western Europe have sought to limit the
events such as the credit crunch. opportunity for low-paid drivers from eastern Europe
NAFTA's truck market is more homogenous than the EUropean undercutting their domestic transport operators and, in late
market. This is partly because it is dominated by big fleets. 2016, the transport ministers of Austria and eight other
When the fleets detect a downturn approaching, they stop countries (Belgium, Denmark, France, Germany, Italy,
new orders and cancel existing orders very quickly. Hence, Luxembourg, Norway and Sweden) wrote to EUropean
the typical period from market peak to trough is shorter than Commissioner for Transport, violeta Bulc, asking her to
the typical trough to peak period. ensure fair competition in the area of road transport.
The recovery in NAFTA demand, which began with a 12% Some of these countries have already taken action (e.g.
increase in 2010 gained substantial momentum in 2011 with Austria) by introducing legislation to limit what they see as
a 28% rise in overall demand to 395,700 class 4-8 vehicles. unfair competition. Such legislation has been challenged by
The growth rate dropped to 15% in 2012 and virtually halted the European Commission which is seeking to preserve the
in 2013 when demand rose by just 1.3% as a 5.3% dip in principles of single market.
Class 8 demand was offset by gains in the light/medium (class At the end of May 2017, the EU announced a new labour
4-7) sector. The rate of growth accelerated strongly in 2014, proposal designed to address the concerns raised by the
with a 12% rise to 512,000 units led by a rise in class 8 sales. nine member states. The EU proposes to prevent drivers from
In 2015, the market rose again, by 9.2% although it weakened lower-wage countries undercutting better paid workers when
significantly in the second half of the year. they travel to other member states.
Following that period of six consecutive years of growth, Under the new proposal, truck drivers can travel outside the
Class 8 demand fell sharply during 2016, substantially offset EU member state where they live and still be paid according
by a continuing rise in Classes 4-7, leaving the overall market to their home country’s rules for up to three days. After that,
down by 7.5% at 509,000 units. drivers will fall under local rules of the country where they
During 2017, the truck market remained in its mild cyclical deliver goods. earlier suggestions had hinted at a longer
downturn in the early part of the year, but good economic timeframe, with a seven-day period being the preferred
conditions, increased freight rates and stable used truck solution. However, the final version setting out a three-day
prices have helped demand to rise in the latter part of the limit marks a big change from this, and should please those
year, and we now expect the market to rise by 1-2% over the member states which have pushed for stricter rules.
full year. The positive momentum will carry forward into 2018, Those states will be less pleased by another of the EU’s
when we expect a more substantial improvement of 4-5% to proposals: the lifting of any limit on cabotage, or the number
take the NAFTA market to around 540,000 units. different delivery trips drivers can make, within their first
five days abroad. Current EU cabotage law restricts drivers
Europe – mild growth to making only three runs during a seven-day trip.
The labour proposal has not been welcomed by those eastern
In Europe, truck demand grew by 6.6% in 2016 to 420,000 EUropean member states with significant exposure to the
units as the EU+EFTA region saw an 11.5% rise to 359,000 international road haulage market; nor have they welcomed
units, with increases in all but three minor markets, but the the additional proposal to require employers to pay for
Russian market declined for the fourth successive year. accommodation for drivers to sleep during long trips abroad.
Regional demand is expected to increase by 3-4% in 2017 as Drivers would no longer be allowed to sleep inside their
lower sales in several major markets such as the UK, trucks. The Commission hopes the improved conditions can
Netherlands and Czech Republic are more than offset by gains even cut down on traffic accidents if drivers face “less stress
in other markets, particularly Russia which is expected to and fatigue”. If this proposal becomes law, it will presumably
grow by around 11,000 units. have a significant impact on sales of sleeper cabs.
The outlook for 2018 is broadly similar, with further growth
in Russia again helping regional demand to increase slightly, South America – all eyes on Brazil
by 2-3% to around 445,000 units.
While each of the individual European truck markets has its Truck demand fell by 23% to 100,000 units in 2016. This was
unique characteristics, one common trend over the past 15 the third successive year of decline, taking the market to its
years or so has been the growth in international road lowest level since 2003 and 57% below its 2011 peak.
transport by the EU’s newest member states from central and Although the decline can be attributed to a range of factors,
eastern Europe. weak or negative GDP was at the root of most of them.

March 2018 18



PERSPECTIVE

Over the full year 2017, demand is
expected to swing positive, though
growing by only about 5% as the
Brazilian market remains very close
to the trough of its downturn.
A more substantial increase of
around 20% is forecast for 2018, as
the Brazilian recovery gains
momentum. Brazilian truck
producers differ in their precise
forecasts for 2018, but all agree on
the direction of travel for the market.
For example, MAN has not only re-
hired personnel laid off during the
downturn, but is in the process of
hiring 300 extra staff to support its
forecast of double-digit growth in
2018.

OUTLOOK FOR 2018

Looking at world demand a year
ahead, there is always a considerable
list of risks and uncertainties, and
2018 is no different. A short list of
the ‘known unknowns’ for the next 12
months would, in no particular order,
include:

• two of the world’s biggest
trading blocs, NAFTA and the EU,
could soon face major, but as
yet unquantifiable disruption;
admittedly, most actual
disruption is likely to occur
beyond 2018, but near-term
investment decisions could be
influenced;

• the US faces mid-term elections,
Brazil has a general election, Russia a presidential Notwithstanding these and many other risks, the central
election, Germany could face another election if a forecast of the IMF (the OECD concurs) is for global growth to
coalition government is not formed and the UK accelerate slightly in 2018, reaching its highest level since
government looks perilously weak; 2011.

• the US federal reserve is expected to raise interest rates While each LV and Heavy CV market of course has its unique
three or four times - usually bearish for emerging dynamics, in general terms this robust level of economic
markets; growth should help underpin a further increase in global
LV demand, with all major regions except NAFTA expected
• the risk of conflict involving North Korea has grown to see higher sales. Global truck demand would see a similar
significantly; and benefit were it not for the major distortion of China, where

• conflict in the Middle East is ongoing and could take – after the exceptionally strong rise in 2017 – we expect
new forms. to see a sales decline in 2018

March 2018 20

growing india

China Joins Race for Booming Indian Car Market

Rishi Iyengar, India Editor, CNN

Shanghai-based SAIC Motor is talking with three Indian states Suzuki met Indian Prime Minister - Narendra Modi to discuss
about setting up manufacturing operations. The automaker jointly developing new technologies in the country.
is also discussing the possibility of taking over a factory in France's PSA, which owns Citroen and Peugeot (PUGOY), is
Gujarat owned by General Motors (GM) - SAIC's main partner getting back into India after staying away for two decades.
in China - but labour disputes have held up a deal.
The market may be attractive, but a new,
"It's a growing market, so we need to have a presence," said relatively unknown entrant like SAIC could find
P Balendran, SAIC's chief representative in India. the going tough.
The company, which is owned by the Chinese government, is "To be successful, Chinese [manufacturers]
planning to sell cars under the British brand MG Motor, one need to build a clear brand positioning in a
of its subsidiaries. highly competitive market," said Rakesh Batra,
Balendran would not say when he hopes to begin making lead automotive analyst for Ernst & Young in
cars in India. That depends on how the talks go, he said. India.
China is the world's biggest car market, but automakers are The country's top two carmakers - Suzuki's
being lured to India by the prospect of faster growth. Nearly Indian subsidiary Maruti Suzuki and Korea's
3 million passenger vehicles were sold in India in the Hyundai (HYMTF) - account for about two-thirds
financial year ending March 2016, according to the Society of sales.
of Indian Automobile Manufacturers -- an increase of more "These two have been steadily at this kind of
than 7% over the previous year. level for a number of years," Batra said. "New
Sales of cars in China rose by nearly 14% in 2016, thanks to entrants have had to come in and fight for the
a tax waiver on smaller vehicles, but growth is expected to 30%."
slow to 5% this year. Still, India appears irresistible to Chinese carmakers looking
Get in line! to expand beyond their own borders. The South Asian nation
Global players are already lining up. German giant is expected to become the world's third largest automobile
Volkswagen (VLKAY) announced a strategic partnership with market by 2020, after China and the United States.
leading Indian manufacturer Tata Motors earlier this month, "Overseas sales are a very small portion of overall sales of
a day after the heads of Japanese rivals Toyota (TM) and Chinese manufacturers, in particular for state-owned
companies like SAIC," said Jing Yang, an automotive analyst
at Fitch Ratings.
Price advantage?
Balendran, a former senior executive at General Motors India,
recognizes there are many obstacles ahead but is confident
SAIC has something to offer.
"It's a new market," he said. "Competition is a big challenge."
"If you can stand out...in terms of product attributes and
innovations, obviously [you] stand to benefit," he added.
Chinese companies may also have an edge in a market where
price can make all the difference.
"Relative to the European or American brands they have better
value for price, so their products are relatively cheaper,"
Yang said. "They [also] have a very good understanding of
rural markets and small cities.”

21 March 2018



know our member

Goldrush Sales & Services Ltd, Lucknow

Goldrush Sales & Services Ltd, a life member of F A D A, located the year 2011, Goldrush ventured into the aviation industry
at Plot No. 2A, Faizabad Road, Lucknow (Uttar Pradesh) was under the name & signature, Ventura Air-connect P Ltd
set up in 1988 as dealership of Tata Passenger Cars. becoming India’s First Air Taxi in Madhya Pradesh with 2
Goldrush has showrooms at Ashok Marg in Hazratganj (4,800 Cessna Aircraft. Recently, the company has been awarded
sq ft); at Faizabad Road (3,000 sq ft); at Sitapur (1,300 sq ft) with “National Tourism Award” from Ministry of Tourism,
and a TMA certified showroom (600 sq ft) and a workshop at GoI for its tremendous contribution in the aviation Sector.
Faizabad (5,000 sq ft). All the showrooms of Goldrush are Pradeep Agarwal is the Managing Director; and Veena
well designed, tastefully built and state-of-the-art facilities. Agarwal is the Director of Goldrush Sales & Services Ltd.
The showrooms offer the convenience, comfort and ambience.
The dealership’s repair & service facilities boast of all the
modern equipment, tools and gadgets. It has as a result
established itself as customer friendly representative of top
class automobile passenger cars.
Goldrush had sold 1,148 cars, while 19,000 cars drove to the
dealership’s workshops for repair, service & spares in 2017-
18, enabling the dealership to post a turnover of over Rs. 130
crore during the year. A dedicated, 350-head strong team of
competent managers, executives, supervisors and well-
trained employees, both at showrooms and workshop,
supports the dealership’s operations at all places.
Pradeep Agarwal and Veena Agarwal, the husband-wife team
have worked together tirelessly for the last so many years to
help dealership diversify from a small trading organization
to a major service provider in different fields making Goldrush
a multidimensional organization. As service providers, it has
been awarded the contract of maintenance of buses under
JNNURM program by Uttar Pradesh State Road Transport
Corporation for Lucknow, Kanpur and Varanasi (in 2010). In

It is Veena Agarwal, who manages and drives the growth at
Goldrush. She with her commitment, dedication and diligence
not only learnt the ropes for managing the dealership
business successfully but helped Goldrush to be the largest
volume dealer in North India for TML securing the position
amongst the first ten dealers in India for Customer
Satisfaction.
Veena Agarwal is also the Chairperson of F A D A Uttar Pradesh
chapter. She is assisted by a Vice Chairman and Regional Directors
to activate the Uttar Pradesh Chapter of the Federation.
We at FADA Wish Pradeep & Veena Agarwal and Goldrush
Sales & Services Ltd All the Best in their Endeavours

23 March 2018

INSIGHT

Business Process Outsourcing
in Automotive Industry

As automotive industry is stepping into a market landscape Unfavourable Economic Factors
which is favorable to it, there is untapped market potential Economic health of the
which is critically scrutinizing each and every product offering country and automotive
before making a decision. industry are very much
The industry is facing challenges of meeting Environmental correlated with each other. If
& Emission norms while dealing with rising Capital Costs, economic drivers of the
increased competition due to globalization and country are not flourishing, it
liberalization, stringent economic factors and customer will impact the whereabouts
relationship management. People at the top of the pyramid of the automotive industry as
will have to take strategic decision to deal with this situation well. Current economic
and reallocate their resources appropriately in order to scenario where interest rate
sustain in this highly competitive industry. for loans is skyrocketing,
currency fluctuation is acting
Challenges in Automotive Industry as a catalyst in only
worsening the state of the
The industry is facing challenges to effectively handle their automotive industry. Industry
customer relationship management and brand reputation in players become helpless if
the conditions, which as of now, are favorable for the industry these two things are not in
but hand on hand they need to meet rising customer their favor because they are
expectation and their changing preferences. To confront these not in the driving seat which
impediments outsourcing is the strategic, cost effective decides the future course of
choice and solution for the automotive industry. action for the health of the
Customer Relationship Management economy.
Environmental Issues & Emission Norms
Customer Relationship Management Development and growth which comes at the cost of
(CRM) is the buzz word in this damaging the environment is unwanted by the people. In
industry. Sole reason being the today’s fast paced world it has become one of the most
after sales market plays a sensitive issues. Manufacturing of automobiles and its
prominent role in this industry. spare parts is an ambit where in all the stages of the product
Customer decisions are highly development, environmental issues are needed to be adhered
driven by how’s the grip of the to, not only that, when a vehicle is on road it has to be in
player in the after sales market. compliance with emission standards of the country. Every
Efficient and prompt service country has instituted its set of emission standard
delivery on vehicle breakdown and protocols. Some of the countries follow European emission
combating the problem of regulations. To combat such stringent norms and
counterfeit spare parts are the regulations market players in the industry are volunteering
major pillars which impacts in the environmental causes which are impacting their
overall customer relationship overall value proposition.
status. Not only the CRM impacts Highly Competitive Market
the product purchasing decision of Liberalization of the market and simultaneous rise of
the customer but also plays globalization has allowed the entry of foreign players in
instrumental role in repeat the market. Market has never been as competitive as it is
purchase decisions and marketing
initiatives of the organization by
turning data into customer insights.

March 2018 24

INSIGHT

now in the automotive industry. This in one way is beneficial Assistance, Call Handling and Customer Satisfaction
for the customers as it gives them the bargaining power Surveys which predominantly impacts the brands After
and varied choices to select from. But competitors have to Sales Service Proposition not only will reduce
be on their toes to gain the attention of the customers. If operational cost but also consolidates brand’s service
competitors don’t they will ultimately see customers proposition which is one of the major factor that decides
switching from their brand to another. Due to this market product purchase decisions.
has become highly competitive and it will only be survival Better Funds for Research & Innovation
of the fittest. Outsourcing tasks
which are regular in
Points to ponder in the Current Situation nature brings the
operational cost
• Strengthening Customer Relationship down and lowers
Management in the organizations by overheads. At a lower
strategically categorizing core and cost industry players
non-core activities and processes. are engaging with a
partner who is having
• Reengineering & benchmarking the improved arsenal in
core activities to bring them at par with handling those tasks.
global industry practices. This also allows
additional flow of
• Persistent brand rejuvenation activity funds in the
to distinguish and achieve the desired organization which
positioning in the mind of the can be utilized for
consumer to achieve top of the mind research & innovation
recall. to improve product offerings.
Focus on Core Competencies
• Cost benefits analysis of keeping the Outsourcing non-core activities to a third party vendor
non core activities in-house vs. allows an organization to devote more time to focus on
outsourcing them to a third party core competencies- Brand Management, etc.
vendor. Better Resource Allocation
Outsourcing non-core activities gives the organization
• Sourcing and evaluation of third party vendors for an opportunity to reframe their Resource Allocation. Due
outsourcing non core activities. to outsourcing many resources can get free and can be
utilized in more fruitful way.
Quick Glance at Non Core Activities & Service Offerings
of a BPO Conclusion

Some of the processes which might be intriguing to an Automotive industry is in transformation phase leaving
Automotive Industry Players are as follows: behind dawn where it faced tougher situations and outcomes
• Roadside Assistance Program and meticulously rising up to exploit the untapped market
• Order to Pay/Payable Helpdesk potential where strategic decision makers of the organization
• Vendor and Dealer Helpdesk should look to outsource CRM related non critical tasks in
• Customer Satisfaction & Follow Up Surveys order to focus on their core value proposition and reduce
• HR Payroll Processing operational cost at the same time. Decision to outsource
non-core activities will diffuse more funds in the organization
Competitive Benefits Derived From Outsourcing Non due to reduced operational cost. These funds can be spent on
Core Activities R&D and Innovation department to improve the product value
proposition and thus ultimately to distinguish one’s brand
Key advantages of outsourcing non-core activities to a third from the rest of the market players
party vendor are as follows:
Strengthen After Sales Service Proposition
Outsourcing non-core activities like Roadside

25 March 2018

F A D A newsline

F A D A Meets Shri Anant Geete, Hon’ble Minister for Heavy
Industries and Public Sector Enterprises

National Auto Policy is being drafted by the Ministry of Heavy Automobile Dealers Associations (F A D A) found that dealer’s
Industry and Public Sector Enterprises. While the views of perspective was not included in the draft. To ensure that the
SIAM and ACMA find mention in the draft, Federation of views of Auto Retail Industry are properly projected and
included in the draft, F A D A met the ministry officials and
submitted a representation. Further, as a follow-up measure
F A D A’s senior office bearers including John K Paul,
President; Nikunj Sanghi, Past President; Vinkesh Gulati, Hony
Secretary; and F A D A’s CEO - Saharsh Damani; B Srinivas of
Talwar Group; and Ms Indira Menon met Hon’ble Minister of
Heavy Industries and Public Sector Enterprises, Shri Anant
Geete on March 12, 2018 to request him to include Federation
of Automobile Dealers Associations (F A D A) in the Apex
Nodal Body for Automotive Industry when it is created. The
Minister was also appraised about certain other concerns
plaguing the automobile dealers.

For the benefit of our readers, National Auto Policy will address issues across the value-
chain, green mobility and eco-system development

March 2018 26

F A D A newsline

F A D A Confers Life Time Contribution Award to
Venu Srinivasan, Chairman, TVS Motor

Federation of Automobile Dealers Associations (F A D A) Sensing the disruption which is not far off, I would urge the
handed over the Lifetime Contribution Award to Venu two-wheeler dealerships to start networking with local
Srinivasan, Chairman, TVS Motor for his immense technicians and use their skills to leverage the business as
contribution to the Indian Automobile Industry on February supposed to looking upon them as competition. I would also
26, 2018. The award was conferred upon him as part of suggest PV dealerships to consolidate among themselves and
F A D A’s 10th Auto Summit, which was held on 9th February bring in professionals to manage the show as in the time to

2018 at Le Meridian, New Delhi. At that time, due to his ill come, it will be really difficult for small dealers to survive.”
health, Venu Srinivasan could not receive the same in person. As part of the F A D A delegation, John K Paul, President,
While receiving the award, Srinivasan said, “I am really very F A D A,Nikunj Sanghi, Chairman, Auto Summit 2018, K V S
happy to receive this Life Time Contribution Award as TVS Prakash Rao, Director, Auto Summit 2018 and C S Vigneshwar,
and F A D A go long back since the time my uncle T S Santhanam Director, F A D A Academy went to the TVS Motor Headquarter
became the 1st President of F A D A in 1964. I started my own in Chennai and handed over the award to Venu Srinivasan. H
career as a technician in a dealership workshop and in fact Lakshmanan, ED, Sundaram Clayton Ltd was also present
all my current dealerships are members of F A D A. during the ceremony.

Engagement of GST Consultant

A GST consultant – Ms Puloma Dalal, FCA based in Mumbai, has been engaged by F A D A on retainership to help
members deal with the complexities of GST law and procedures. She will, on reference made by FADA, guide and give
legal opinion on various issues relating to GST as applicable to automobile dealers.

F A D A 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 issues raised by F A D A 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 as relevant to automobile dealers, may send their
queries to Federation of Automobile Dealers Associations (F A D A), 804-805, Surya Kiran Building, 19, K G Marg,
New Delhi - 110 001 (E-mail ID: [email protected])

27 March 2018

upgrades & variants

Honda Unveils 2018 Editions of CB Shine SP, Livo & Dream Yuga

Creating new excitement in the market, Honda Motorcycle 2018 edition of Dream Yuga- Honda’s 110cc stylish commuter
& Scooter India (HMSI) launched three 2018 editions of The 2018 edition of Dream Yuga Honda’s premium 110cc
its motorcycles – Livo, Dream Yuga and CB Shine SP. The commuter motorcycle gets refreshed graphics, an elegant
new editions offer refreshed style and advanced meter design, body coloured rear view mirrors, advance
technology. technology viz. HET tyre (Low Rolling resistance tyre) for
Commenting on the beginning of national despatches for the improved efficiency and new low-maintenance seal chain.
three motorcycles, Yadvinder Singh Guleria, Sr VP, Sales 2018 Dream Yuga gets a new colour - Black with Sunset Brown
&Mktg, HMSI, said; “All 3 motorcycles - Dream Yuga, Livo & Metallic in addition to the existing five colour options (Black
CB Shine SP are delighting different type of buyers, be it the with Red / Black with Lemon Ice Yellow / Black with Radiant
aspirational first time buyer or the mature buyer seeking Red Metallic / Sports Red with Black / Black with Heavy Grey
premium offering in the 110cc segment or even the customer Metallic) and is affordably priced at Rs. 52,741 (Ex-
who wants effortless style in the 125cc segment. The new Showroom, New Delhi).
2018 editions will further delight customers with their
refreshed styling quotient, enhanced features like low-
maintenance seal chain and patent applied HET tyres for
improved mileage.”
2018 edition of CB Shine SP – Honda’s sporty 125cc motorcycle
The effortlessly stylish new 2018 edition of CB Shine SP gets
new style with an aggressive tank shroud, new sporty graphics
for a sportier look, a new instrumentation cluster with Service
Due Indicator & clock and a new low maintenance seal chain.
The 2018 edition of CB Shine SP is available in 5 colours
(Pearl Siren Blue / Geny Grey Metallic / Black / Athletic
Blue Metallic / Imperial Red Metallic), 3 variants (Drum /
Disc / CBS) and price starts from Rs. 62,032 (Ex-Showroom,
New Delhi).
2018 edition of LIVO - Honda’s 110cc modern trendsetter
The 2018 edition of LIVO gets more style courtesy the new
stylish sporty stripes. Upping the game is the new analogue-
digital meter console with added convenience of service due
indicator, clock and low maintenance seal chain.
The 2018 edition of Livo is available in 5 colours (Black /
Athletic Blue Metallic / Sunset Brown Metallic / Matte Axis
Grey Metallic, Imperial Red Metallic) and 2 variants (Drum
/ Disc) and price starts from Rs. 56,230 (Ex-Showroom,
New Delhi).

Mercedes-Benz Launches Country's The new S-Class is fitted with the Thermotronic automatic
First BS VI Vehicle, New S-Class climate control in the rear, which means temperature and
air distribution can be individually set for the left and right
Mercedes-Benz launched Mercedes-Benz S-Class at Titanium sides using a control panel on the rear of the center console.
Motors, Chennai on February 26. The new S-Class 350 d is The ambience lighting in 64 colours displays the high-class
India’s first ‘BS VI compliant– Made in India, for India’, vehicle interior like a work of art. Further, futuristic displays in HD
with a state-of-the-art diesel engine that meets BS VI emission resolution, select materials, generous sense of
norms, two years ahead of the regulation. This world-class spaciousness showcases the unique atmosphere in S-Class
engine is capable of running on currently available BS IV spectacularly.
fuel. The Mercedes-Benz S 350 d is priced at INR 1.33 Crore, A built-in smartphone integration system that allows
while the petrol version S 450 is priced at INR 1.37 Crore integrating iPhones via Apple CarPlay as well as Android
Michael Jopp, Vice President, Mktg & Sales, Mercedes-Benz smartphones with Android Auto into the vehicle, and
India said, “We are pleased to launching the first ever ‘Made operating them by voice control. The new S-Class comes with
in India, for India’ BS VI car - new S-Class. We have set a wireless mobile charging in the front and rear center arm
benchmark among all car manufacturers to support the rests, Burmester surround sound system with 13 speakers, a
Government in mitigating the rising pollution levels in the 9-channel DSP amplifier and a total output of 590 W.
country. The new S-Class brings together luxury, design and The radiator trim with three twin louvres and vertical bars
technology that meet the highest standards of perfection, in high-gloss black highlight the new look and a new lower
surpassing expectations for a vehicle of this class.” bumper with large air intakes and a sporty appeal. The multi-
Engine & Transmission beam LED headlamps lend character to the front end with
Mercedes S350 d is equipped with OM 656 engine and inline- three striking light torches. New 18-inch, 5-twin-spoke
six cylinder motor delivers an output of 210 kW (286 hp). sporty look light-alloy wheels make their debut in the new
Mercedes S 450 boasts of V6 petrol engine with 270 kW (367 S-Class.
hp). Thanks to twin turbocharging and intercooling, the S Multi fold Safety features that come as standard, the new S-
450 offers huge reserves of power. Class comes with optional safety technology: a new radar-
Interior and Exterior based driving assistance system, which reduce the risk of
The new S-Class comes with an advanced Panoramic-sliding accidents and enhance the protection.
sunroof with an obstruction sensor. In addition, two electric Active Distance Assist DISTRONIC controls the distance to
roller sunblind provide shade for the occupants in strong vehicles in front up to a speed of 210 km/h and if necessary
sunlight. It is fitted with a new multi-function steering wheel brakes the vehicle with up to 50 per cent of the maximum
with ergonomic touch control buttons that allow intuitive braking power.
control of most functions along with the integrated cruise Active Steering Assist helps the driver keep the vehicle in the
control in the left-hand grip area. centre of its lane on straight stretches of road or slight bends
at speeds up to 210 km/h

29 March 2018

news basket

Maruti Suzuki Alto Scales Cumulative Sales of 35 Lakh

Maruti Suzuki India’s best selling car in India for 14 the ever evolving customer aspirations and strengthen the
consecutive years, Alto scaled the unique feat of 35 lakh brand Alto. In 2017-18, nearly 55 per cent of customers have
sales in cumulative wholesales. selected Alto as their first car purchase in 2017-18.

Commenting on the success of Alto, R S Kalsi, Senior Executive Interestingly, 25 per cent of Alto buyers
Director - Mktg & Sales, Maruti Suzuki India said, “Brand are buying it as an additional car,” Mr
Alto continues to remain fresh, relevant and as exciting as it Kalsi said.
was in 2000. Since 2006, every two years, Alto is adding 5 Alto is pioneer in democratizing premium
lakh new happy customers. In 2008, we clocked 10 lakh units. features such as power steering, front
In 2010, it touched 15 lakh units and today in 2018, we have power windows, integrated stereo,
crossed 35 lakhs of cumulative sales.” internally adjustable ORVMs (outside
“Maruti Suzuki has systematically upgraded the Alto to meet rear view mirror), trendy headlamps and
sporty bumper grille. It has a strong
portfolio with two engine options on
offer – 800 cc and K10 – along with a CNG
fuel variant. In 2014, Maruti Suzuki
introduced its innovative two-pedal technology (Auto Gear
Shift) transmission in the Alto K10. AGS makes driving
comfortable in heavy city traffic conditions, without
compromising on fuel efficiency. Today, about 18 per cent of
Alto K10 sales come from the AGS variants.
Brand Alto has clocked a growth rate of 6 per cent in 2017-
18. At the same time, it has garnered a market share of 33 per
cent in 2017-18 in its segment.

TVS Motor Rolls Out Race Edition of Apache RTR 200 4V

TVS Motor rolled out the new generation of the TVS Apache a stylish and exclusively designed fly screen which is sure to
RTR 200 4V with priced tage of Rs. 95,185 (Carburetor), Rs. accentuate the racing stance of the motorcycle thus making
107,885 (EFI) and Rs. 108,985 (Carburetor with ABS), Ex- it a racing machine like no other."
Showroom, Delhi, on March 7.

Termed as Race Edition 2.0, the new Apache RTR 200 4V gets The motorcycle continues to be powered by a 197.75cc single-
the advanced ‘Anti-Reverse Torque (A-RT) Slipper Clutch’ cylinder motor, which is mated to a 5-speed gearbox. The
technology. The advanced ‘A-RT Slipper Clutch’ technology, engine develops 20.5 PS (Carb) / 21.0 PS (EFI) of power at
accentuates the motorcycle’s performance, with 22% 8500 RPM and 18.1 Nm of torque at 7000 RPM.
reduction in clutch force for quicker upshifts, enabling the
rider to achieve better lap times. The new edition will also
sport new racing-inspired graphics, lending the motorcycle
a dynamic and aggressive stance. The series now boasts of a
fly-screen for enhanced aerodynamics.
Arun Siddharth, VP (Mktg), Premium 2-Wheelers, International
Business & TVS Racing, said, "We build race machines for
performance enthusiasts - TVS Apache series is a testimony
to our 35 years of racing heritage. The new TVS Apache RTR
200 4V Race Edition 2.0, takes the racing experience up by a
significant notch as it is enabled with the 'A-RT Slipper Clutch'
– a first in this segment. The entire TVS Apache RTR 200 4V
range will don the dynamic racing-inspired decals along with

March 2018 30

news basket

Mahindra and Ford Sign MoUs to Co-Develop Midsize and Compact
SUV, Electric Vehicle and Connected Car Solutions

Mahindra Group and Ford Motor Company will jointly between Mahindra and Ford,” said Dr Pawan Goenka,
develop new SUVs, and a small electric vehicle as part of Managing Director, Mahindra & Mahindra Ltd “Both teams
several initiatives announced today between the two are working together on joint development areas in keeping
companies. with industry requirements and leveraging mutual strengths.
The two companies signed five new memoranda of We are excited about the synergies unveiled through this
understanding (MoU) that further strengthen their strategic collaboration and the potential opportunities it will bring.”
alliance and accelerate the development of key products “Ford is committed to offering the best vehicles, technologies
for consumers in India and emerging markets. The MoUs, and services that fit the lifestyles and preferences of Indian
which are non-binding, mark the progress made by the two consumers,” said Jim Farley, Ford Executive Vice President
companies since announcing their alliance in September and President of Global Markets. “Listening to our customers
2017. and incorporating their future needs is the core premise of
this collaboration. With utility vehicles and electrification
as key focus areas, we are glad to see the progress our two
companies have made.”
Aiming to generate synergies and improve efficiencies with
the new initiatives, the strategic alliance between the two
companies continues to focus on leveraging the benefits of
Ford’s global reach and expertise and Mahindra’s scale in
India and its successful operating model.
Teams from both companies will continue to collaborate and
work together, for a period of up to three years, to develop
further avenues of strategic cooperation such as:
• Extend support for Mahindra in global emerging markets,

including Ford’s manufacturing and distribution network
• Collaborate to address future mobility needs

Under the initiatives, Mahindra and Ford will leverage their Mahindra has been leading the utility vehicles segment in
strengths in the utility vehicle space to co-develop a midsize India for the past seven decades. The spirit of ingenuity has
sports utility vehicle (C-SUV). Built on the Mahindra platform, driven Mahindra to be among the few global companies
the new SUV will drive engineering and commercial pioneering the development of clean and affordable
efficiencies and will be sold independently by both technology and is the only player with a portfolio of electric
companies as separate brands. vehicles commercially available in India. Expanding its
Mahindra and Ford also agreed to evaluate co-development global presence, Mahindra owns a majority stake in
of a compact SUV and electric vehicle, along with sharing Ssangyong Motor Company in Korea, has forayed into the
powertrain portfolios, including the supply of Mahindra shared mobility space with investments in ridesharing
powertrains to extend Ford’s product range. platforms in the US, and is developing products like the GenZe
Building on the collaboration, Mahindra and Ford also – the world’s first electric connected scooter.
announced plans to co-develop a suite of connected car Ford was among the first global automakers to enter India in
solutions for consumers. The collaboration is in line with 1995. Now one of the largest exporters of cars from the
Ford’s commitment to helping people around the world move country, Ford manufactures and exports vehicles and engines
more safely, confidently and freely. from its manufacturing facilities in Chennai, Tamil Nadu and
“Today’s announcement is the next step in the collaboration Sanand, Gujarat. India is also the second-largest Ford
employee base globally, with more than 14,000 people
working across the Ford India or Global Business Services
operations in New Delhi, Chennai and Coimbatore

31 March 2018

Consumer case studies

National Consumer Disputes Redressal Commission, New Delhi

Dr B C Gupta, President Member and S M Kantikar, Member

M/s Kinetic Motor Co. Ltd & Anr - Petitioners

Versus

Raj Kumar Rai & Ors - Respondents

Revision Petition No. 56 of 2011 Decided on: 25.05.2017

(Against the Order dated 06.10.2010 in Appeal No. 714/2007 of the State Commission Bihar)

Consumer Protection Act, 1986 - Section 2(1) (d) – Automobile – Termination of sub-dealership – Complainant was engaged
in business of re-sale of vehicle – In absence of any documentary evidence like contract or agreement between Petitioner
company and Complainant, it cannot be proved that Complainant was a sub-dealer – Supply of vehicles at one time by
authorized dealer to trader does not create a right of such appointment as a sub -dealer in such trading – Issue of appointment
of a dealer/sub-dealer by manufacturer of motor vehicles does not amount to availing of any service on behalf of Complainant
who claims himself to be a sub-dealer – Complainant is not covered in definition of consumer – State Commission dismissed
appeal on ground that there is nothing on record to believe that dealership has not adversely affected livelihood of Complainant
which has to be shut down under direction of OP – Order passed by Sate Commission – Revision Petition Allowed.

Important Point

Supply of vehicle at one time by authorised dealer to trader does not create a right of such appointment as a sub-dealer.

Order

1. Dr S M Kantikar, Member - This revision petition has the Complainant was terminated with the direction to
been filed under Section 21(b) of the Consumer Protection
Act, 1986 against the order dated 6.10.2010 passed in close the establishment and nothing was paid to him on
termination. Therefore, the Complainant suffered huge
First Appeal No. 714 of 2007 by Bihar State Consumer loss. He had invested money by taking loan from the
Disputes Redressal Commission, Patna (hereinafter
referred as ‘the State Commission’) whereby the State Bank. Due to unfair trade practice of the OP 1,
Complainant lost his business and it shattered his dream.
Commission dismissed the appeal of the opposite party
and upheld the order passed by District Consumer 3. Hence, alleging unfair trade practice, the Complainant
Disputes Redressal Forum, Gopalganj. filed a complaint before the District Consumer Disputes
Redressal Forum (hereinafter referred as ‘the State
2. The brief facts relevant for the disposal of the case are Commission’), Gopalganj.
that the appellant/OP 1 is M/s Kinetic Motor Co. Ltd,
which deals with manufacturing of motorcycle and its 4. The OPs contested the complaint by filing written
products; OP 2, Sallaja Motwani, Managing Director of version and submitted that the Complainant did not
the Company in the territory of Bihar, OPs 4 and 5, namely,
Manish Kumar and Kundan Kumar, respectively, are the come within the purview of consumer, who was never
made a sub-dealer by the OPs rather they asserted that
distributors for the aforesaid company, used to transact OP NO. 6 was made their dealer with further allegation
their business to sub-dealers. Raj Kumar Rai, the
Complainant, was made a sub-dealer for Gopalganj that OPs No. 4 and 5, who were dealers earlier but their
dealership had been terminated. It has been further
District on 17.8.2002 by OPs 1, 2 and 3. On the basis of submitted that that the Complainant was running the
instruction of OP, the Complainant got his showroom
and workshop expanded by spending more than aforesaid business establishment for the purpose of
trade and as such, if there was any grievance against
Rs.60,000. The Complainant started running his business the conduct and business transaction and accounts
as sub-dealer also, in response to company’s direction.
Thereafter, M/s Neelkamal Automobiles, OP 6 has been between the parties, the proper forum for the aggrieved
Complainant was to opt the Forum of Civil Court having
made a sub-dealer of OPs. It was protested by the appropriate jurisdiction to deal with such matters and
Complainant and subsequently, the sub-dealership of
for that count, it was not entertainable in the Consumer

March 2018 32

Consumer case studies

Forum itself. He further submitted that so far as the Service Centre for all Kinetic brand of two-wheelers in
contention of the appellant in the District Forum that Gopalganj, Bihar”. The counsel further brought our
the Complainant-Respondent was not made their sub- attention to the written statement filed by OPs 4 and 5
dealer is concerned, it is not supported by any stating that they have left the dealership and partnership
documents, which are filed on behalf of the appellant of OP 1 from 28.04.2014 and the Complainant was
in the form of vouchers, letters, which itself go to show appointed as a sub-dealer at Gopalganj by OP 1. The
that there was transaction and remittance of money in counsel further produced a physical handicap certificate
the form of drafts, cheques etc. in the company of the of the Complainant and the Complainant availed the loan
appellant directly or through dealer. So the appellant from the bank.
cannot take a plea that they had no business
relationship with the Complainant-Respondent as 10. After thoughtful consideration and upon perusal of
stated and claimed by the Respondent. Moreover, the record on the file, in our view, the Complainant was
dealers, which are said to have been removed by the engaged in the business of re-sale of the vehicles. In
manufacturer-appellants has not come here to contest absence of any documentary evidence like contract or
the matter, so the appellants cannot be absolved from agreement between the Petitioner/company and the
discharging their responsibility. Complainant, it cannot be proved that the Complainant
was a sub-dealer. We do not find any approved
5. The District Forum vide order dated 20.72006 allowed procedure or recommendation of main dealer of the
the complaint of the Complainant and directed OPs 1, 2
and 3 to pay Rs. 2 lakh as compensation and to cancel Petitioner/company to appoint the instant Complainant
as a sub-dealer. Thus, the supply of vehicles at one
the appointment of OP 6 and appoint Complainant as time by the authorized dealer to the trader does not
sub dealer.
create a right of such appointment as a sub-dealer in
such trading. It is clear that the dealings between Shiv
6. Aggrieved by the order of the District Forum, the OP filed Shakti Automobile, main authorized dealer and the
appeal before State Consumer Dispute Redressal Complainant has no relation with the Petitioner/
Commission, Patna, Bihar (herein after referred as ‘the company. There was no transaction or privity of
State Commission’). The State Commission vide order contract between the Petitioner/company and
dated 6.10.2010 dismissed the appeal on the ground Respondent No. 1/Complainant. It is pertinent to note
that the there is nothing on record to believe that the that the Petitioner/company had never issued any letter
dealership has not adversely affected the livelihood of of intent and letter of appointment to the Respondent
the Complainant which has to be shut down under the No. 1, which is a mandatory provision for appointment
direction of the OP. Hence this Revision Petition by OP. of dealer or sub-dealer by the company. Moreover, in
our view, the Complainant was engaged in commercial
7. We have heard the learned counsel for the parties.

8. Learned counsel for the OP contended that the complaint transaction, which cannot be said as it was a sole
is not maintainable because the Complainant is not a
consumer of the OP under the Consumer Protection Act, source of livelihood. Furthermore, it was the resale
transaction. Thus, on both counts, the Complainant is
1986. It was further submitted that the Complainant not a consumer.
was never appointed as a sub-dealer whereas OPs 4 & 5
9. were dealers and their dealership was terminated. 11. Further, as per Section 2(d) of the CPA, a consumer means
The rival arguments on behalf of the Complainant are any person who buys any goods for consideration or
that both the fora have given concurrent findings on the who hires or avails of any service for consideration. In
fact, therefore, there is limited scope in the Revision our opinion, the issue of appointment of a dealer/sub-
Petition. Counsel for the Complainant submitted that dealer by the manufacturer of motor vehicles does not
the Complainant is a consumer as he was unemployed amount to availing of any service on behalf of the
person running a business as self-employed for his Complainant who claims himself to be sub-dealer. The
livelihood. Learned counsel brought our attention to the Complainant, therefore, is not covered in the definition
annexure R-3/1, the letter written by OP-M/s Kinetic Motor of consumer on this ground as well.

Company Ltd, Kolkata dated 3.9.2002. The letter was 12. As a result of the foregoing discussion, the instant
written to District Transport Officer, Gopalganj for revision petition is allowed and the impugned order
passed by the State Commission is set aside. The parties
issuance of trade certificate, which clearly mentioned are directed to bear their own costs
that “M/s Shivam Automobile is an authorized Sales and

33 March 2018

new dealerships

Volvo Car Expands its Footprints in India

Opens two dealerships in 2 days – KNS Volvo in Raipur and Kerala Volvo in Kazhikode

Volvo Car India inaugurates two new 3S dealerships - Kerala Kerala Volvo
Volvo in Kazhikode and KNS Volvo in Raipur in two successive Kerala Volvo is a Volvo Car India’s first compact 3S dealership
days i.e. 15 March and 16 March, respectively. Both the located at Kozhikode in North Kerala. Built on a 9,000 sq ft
facilities were inaugurated by Charles Frump, Managing plot, the 2000 sq ft Showroom and 2,000 sq ft of dedicated
Director, Volvo Car India. Service Centre exudes Volvo’s Scandinavian hospitality. This
Charles Frump, said “Opening the dealerships in these cities fully operational state-of-the-art facility will cater to the
is a step closer to achieving our medium term goal of doubling increasing demand of the high-end luxury cars in North Kerala.
the segment share by 2020. Our distinguished products and The latest addition by the brand is its second dealership in
a unique Swedish customer experience will attract the luxury Kerala. The first one was launched in Kochi in 2009.
car buyer in these regions. KNS Volvo and Kerala Volvo have
already set up a strong team and are upbeat about
contributing to the Volvo Cars success in India. Raipur is
new territory for Volvo Car and our presence in Central India
will boost the brand potential while Kerala Volvo is doing a
great job of garnering the Kerala market from Kochi and this
facility will further enhance their reach in the state.

KNS Volvo

KNS Volvo is a 3S facility located at Tatibandh in Raipur and
has the same global Volvo Retail Experience standards. With
a plot area of 30,000 sq ft the facility has a built-up of 7,369
sq ft of Showroom and 4,457 sq ft of dedicated service centre
and is geared up retail and service Volvo cars in Raipur and
its catchment Chhattisgarh market.

Umesh Mohanan, Dealer Principal, Kerala Volvo, said, “Our
association with Volvo Cars is long-established. We
opened our first Volvo dealership in Kochi. Today, we are
delighted to announce the launch of this state-of-the-art
Compact 3S facility in Kozhikode. We are determined to
replicate our success in Kochi for the Kozhikode facility
by providing best-in-class customer experience. The entire
range of Volvo cars will be retailed and serviced from our
new facility.”

Amar Narayan Singh, Dealer Principal, KNS Volvo, said, “Volvo Swedish luxury car company Volvo established its presence
Cars is a brand synonymous with Swedish design, intuitive in India in 2007 and has since then, worked intensively to
technology and safety. It is a matter of pride for us to be market the Swedish brand in this country. Volvo Cars currently
associated with Volvo cars. Our state-of-the-art 3S facility in markets products through its dealerships in Ahmedabad,
Raipur will deliver best-in-class services to customers and Bangalore, Chandigarh, Chennai, Coimbatore, Delhi NCR –
help the brand succeed in Central India.” South Delhi, West Delhi and Gurgaon, Hyderabad, Jaipur,
Kochi, Kozhikode, Lucknow, Ludhiana, Mumbai, Pune, Raipur,
Surat, Vishakhapatnam and Vijayawada.

March 2018 34

new dealerships

Tata Motors Expands CV Network in Gujarat

Opens new 3S dealership - Shree Ambica Auto Sales & Service in Vadodara

Tata Motors inaugurated its 14th commercial vehicle Spread in an area of over 40,000 sq. ft., the new 3S facility’s
dealership in the State of Gujarat through its newly appointed after-sales service arrangement has a capacity to cater to 36
dealer, Shree Ambica Auto Sales & Service in GIDC Ranoli, vehicles a day.
Vadodara on March 12. Commenting on the occasion, R Ramakrishnan, Global Head,
Customer Care, CVBU, TML, said, "We are happy to extend the
responsibility of Vadodara territory to Shree Ambica Auto
Sales & Service to expand our services at Vadodara. The state-
of-the-art dealership is a MHCV & Buses range dealer and
will be catering to both Cargo and Passenger segments in
Vadodara District."

Kanu Bhai Modi, Managing Partner, Shree Ambica Auto Sales
& Service said, "We are extremely delighted and privileged to
continue our partnership with Tata Motors and now happy
to be present in Vadodara as well. At our new state-of-the-art
dealership, customers can experience a host of primary and
value-added services for Tata Motors entire range of
commercial vehicles, through trained personnel."

India Yamaha Motor Unveils its 9th Dealership in Uttarakhand

India Yamaha Motor (IYM) announced on March 11, the Speaking on the occasion, Roy Kurian, Sr VP, Sales & Mktg,
opening of its new dealership - Doon Infinity in Rajpur Road Yamaha Motor India Sales, said, “For Yamaha, emerging Tier-
at Dehradun in Uttarakhand . With this, Yamaha has 2 II markets such as Dehradun is going to play a crucial role in
dealerships in Dehradun and 9 in the State. future growth story. Uttarakhand is an important market for
Spread across 4,500 sq. feet, this stand alone store has been Yamaha as there is a growing demand for 2-wheelers in this
strategically chosen to meet the growing demand for two-
wheelers in Dehradun. The new outlet has been designed to region and Doon Infinity has been strategically chosen to
provide a complete gamut of Yamaha’s offerings - to exhibit cater to the strong growth potential in local markets. The
an entire range of bikes and scooters including all its latest outlet is well equipped with a strong team of sales professionals,
products along with sales, services and spare parts support. service and spare parts support, which is sure to bring about
excitement amongst the 2W enthusiasts of the region.”

Ford Inaugurates Novelty Ford in Amritsar

Ford India inaugurated its newest dealership, Novelty Ford, • The new Ford dealership in Amritsar - Novelty Ford – now
in Amritsar at 279, East Mohan Nagar, on March 6. ready to welcome customers and deliver an unparalleled
The new dealership sprawls across 20,673 sq ft to display sales & service experience
Ford’s value-rich product portfolio along with 13 service bays
to deliver a differentiated service experience. • Most compelling value-for-money product portfolio on offer
“Trust, transparency and attentiveness are the hallmarks of with Next-Gen Figo, Ford Aspire, new Ford EcoSport, Ford
Ford brand. With Novelty Ford, we are proud to have added Endeavour and the iconic - Ford Mustang
one more location that will help us deliver this promise,”
Vinay Raina, ED, Mktg, Sales & Service, Ford India said. • Novelty Ford to offer 3S support to customers; Expands
Novelty Ford offers the company’s safest products comprising the sales and service footprint in Punjab to 16 outlets
of Next-Gen Figo, Ford Aspire, All-New Ford EcoSport, Ford
Endeavour and the iconic Ford Mustang. Novelty Ford is led by Luvtesh Singh Sachdev as the dealer
principal and strengthens the company’s offering.
Ford has a total of 3 dealerships and 16 Sales & Service
facilities in the state of Punjab

35 March 2018

Family Business

Continuity of Family Business Across Generations

Navneet Bhatnagar and Kavil Ramachandran

Creating family businesses that last multiple generations counterparts have demonstrated strong commitment to
has always been a challenge. Given that family controlled entrepreneurship.
businesses constitute a significant part of businesses,
particularly in Asian countries, the need to find It is in this context that the role of women as business
mechanisms to facilitate their survival and growth is leaders becomes relevant. This is an area often not
always important. Unfortunately, awareness about such explored, thanks to the historical dominance of male
mechanisms is limited, let alone the capabilities and leaders in business and society. However, a close look at
resources required to implement any such strategies. It is women leaders and their contribution to building large
in this context that we should look at the relevance and businesses would show the phenomenal inherent
magnitude of the impact of the series of family business capabilities women have as business transformational
conferences, the Indian School of Business has been leaders. Four such qualities are listed below.
organizing over the years. The Thomas Schmidheiny Centre
for Family Enterprise that has organized the conference - Women are proven to be very good in handling
ensured that the message of the conference was shared emotionally sensitive situations.
and discussed across academic and business
communities. - Women are able to empathise with colleagues and
resolve issues amicably.

Leadership Challenges in Building Large Businesses - Their productivity is in no way inferior to men; in fact,
several experts believe that their productivity at work
Most family business leaders continue to explore the is greater.
unknown in their ‘discovery driven journey’, at least until
the business becomes really large. This is so independent - Women are able to communicate tough messages more
of the generation to which the business leader belongs effectively and smoothly, compared to men.
to.
Such insights on the potential contribution of women
Fundamental to building a large business is the clarity leaders are particularly relevant in Asian countries. The
the family and leadership has about its purpose of key message is that leadership has to show tremendous
existence. While a growth strategy is critical, a set of core amounts of human touch in all the strategies it formulates.
organization values that are shared by the employees is a It is true that lasting family businesses have a large pool
basic building block of any successful organization. One of top talent that has remained with the organization for
common thing that helps build lasting large businesses is very long time. They have earned the trust of the promoter
the practice of values, which in most cases, are an family in terms of suitable managerial capabilities to take
extension of the family values. In essence, clarity of family the organization to the higher levels, proven high levels of
values and dedication of the leader to their strict adherence integrity and ability to retain confidentiality. Both men
in their words and deeds is critical for building large and women can be high quality leaders.
businesses.
Building a successful large family business depends a lot
Entrepreneurship is a value that is found to permeate on the quality and contribution of the board of directors.
through the history of any multi-generational organization. Very often family business leaders are not aware of the
As the organization grows big and gets trapped by roles and responsibilities that an active board of directors
structural and systemic forces, it is the ability of the can play. Family businesses that recognize the board as
leadership to sustain entrepreneurial orientation across the custodian of the overall interests of all stakeholders
the organization that helps it to remain competitive. It do benefit immensely from the collective wisdom that
does not happen automatically, and in fact, the quality board members will provide.
gets lost particularly when the attention of the leadership
gets engrossed in improving operational efficiencies. A good board will maintain a fine balance between
Family businesses that have grown faster than their interference in the operations and providing guidance in
building the business as a great institution. For this to

March 2018 36

Family Business

happen, it is important for the family to develop trust modalities to all family members. Many a times, the
between the promoter family, business leadership and incumbent's inaction or lack of clarity on matters of
board members. All these key stakeholders should have succession create an environment of conflict among
shared vision and strategy for the board to be productive. siblings. Most such conflicts are on the issues of fairness
and respect rather than money. Succession must be based
Success also depends on the choice of the individuals on meritocracy - i.e., succession needs to be earned, it
chosen as board members. They should be independent cannot simply be a birth right. This needs to be clearly
minded, competent with diverse background. A board communicated to the next generation members.
consisting such people will be able to help the organization
grow rapidly and consistently, keeping the long term The future of family business and its survival depends on
building blocks intact. However, leaders should be aware the choice of successor. The successor must treat
that it means some loss of freedom for them! professionals at par, encourage humility and earn respect
of each stakeholder- employees, dealers, shareholders,
Building Family Bonding as a Unique Strategic Vision board of directors. For this to happen, the successor’s
appropriate grooming is most crucial. Instilling pride in
Family is a unique social institution held together by family legacy, commitment to core family values, respect
emotional bonding among the members. Unlike a business, for diversity, quest for finding own passions, preparing
where relationship among the employees is contractual, for the challenges of real life, objective and unbiased
quality of relationship among the members is influenced assessment and getting rid of entitlement mentality are
by the shared values and purposes. It is a fragile system critical issues that must be taken care of, while grooming
that needs careful nurturing always. the next generation for family business leadership. The
successor must be made aware that he/she must act as a
What makes the family bonding in a family business responsible trustee of the business and wealth that will
context is the positive energy and collective pool of non- be passed on to the next generation.
monetary network of resources. This helps family
businesses to not only withstand challenges but also build Owners Expectations and Growth of Family Business
lasting businesses. This will happen only when there is
strong alignment of goals and intentions in the same Owner families need to continually build their businesses
direction. with the same entrepreneurial zeal that got them started.
As businesses grow and organisational setup becomes
Experiences of several successful family businesses show more bureaucratic, preference for status quo and lethargy
that relationships are shaped and strengthened by may set in. This is what family businesses always need to
individual personalities working with similar perspectives. guard themselves from. It is very crucial for family firms
In the same breath, we can say that discontent in to keep their entrepreneurial spirit alive. Trying new things
relationships grows due to mistrust which in turn is an and exploring new ways of doing business must always be
outcome of gaps between what one does and what one’s explored. However, ensuring synergy in overall strategy is
hidden motivations are. Families have to work towards critical. Family businesses need to have cohesive thinking
aligning everybody’s thoughts and have a shared strategy amongst all family stakeholders and full clarity on
for the business and family. This essentially implies financial terms even with silent partners.
creation of a shared mental model through dialogues,
mutual learning and joint discovery of the unknown. People It is important to aptly manage the expectations of family
should develop capabilities to listen. owners. This is becoming increasingly critical because of
the growing diversity in thinking among members of the
Managing Succession and Next Generation Grooming same family. At any given point of time different family
members are traversing through a different phase in their
Family businesses need to plan and prepare for succession life. Some of them might be current high achievers, some
to ensure smooth leadership transition when the others might be oriented towards future growth and yet
incumbent leader grows old and is not able to continue in others who might be comfortable with status quo. While
leadership role. This requires that the next line of some members may be involved in operations, a few others
leadership is timely trained and groomed to take on the may be involved in developing the strategy, and the
larger responsibility in future. Family businesses need to remaining only be investors. Each one of them would have
evolve a clear succession plan and communicate its

37 March 2018



Family Business

varying expectations from the business. Fulfilling those Responsible ownership is essential for long term
diverse expectations is a big challenge for the family sustenance of family businesses. Ownership togetherness
business. However, it is important that all of them realize and clarify of rewards are critical for building lasting
that their goals are only achievable when the business family businesses. Family businesses need to fortress
registers satisfactory growth and profitability. Staying ownership within. Ambiguity with regard to ownership
together under an effective leadership is the only way that rights is dangerous. Documenting the ownership norms,
this can be achieved. rights and privileges is always more trustworthy. It is
advisable that family businesses prepare legally valid
Preserving family wealth is a major challenge that needs shareholders agreement that defines precisely who owns
to be met to keep families together. Business families what and lays out the rules of transfer, inheritance, sale/
need to adopt diversification strategy in managing their exit. This will ensure that all family members have clarity
business and family wealth portfolios. This on these matters and conflicts are minimized.
diversification needs to be made across clients, asset
classes, geographies, products and commodities. They Building Teams and ‘Letting Go’ of Control
must develop agile and opportunity-prone operating
models. In markets that are less predictable, family firms Developing capable teams that can deliver and giving them
must very strongly anchor their businesses locally. It is decision-making control is essential for smooth transition
important to ensure that family businesses hire, retain of family business leadership to later generations. The
and develop the best talent at all levels. Superior human incumbent family business leader always faces many
resource capital will help family businesses in creation challenges in letting-go the control over the business. On
and preservation of wealth for future generations. one hand this involves emotional issues like, fear of loss of
stature, power and respect once the person relinquishes

control. On the other hand, there are career
concerns – like occupation after one steps
down and idleness. Other issues that
concern the incumbent are the perceived
threats - like what if things do not work
out as planned - insecurity and doubts on
the capability of the successor. Another
aspect that troubles the incumbent is the
threat of how the person will be viewed by
the children, relatives and inner circle,
once he/she steps aside. Family business
leaders need to be up-front in dealing with
and proactive to address these challenges,
insecurities and threats. It is important
that the family business owner adopts a
hands-off approach and plans a smooth
transition into a non-operating owner.

Bringing high quality non-family
professionals and giving them freedom to
operate is essential for long-term
institutional building. This has to be
achieved by mutual trust, taking charge,
delivering performance and adhering to
value systems. In most long-lasting family
businesses all family members involved are
aligned with strategic objectives and are
willing to adapt/evolve. Such businesses are
receptive to external input and talent and
are also valued by external investors.

39 March 2018

Family Business

Conclusion Family businesses must also ensure timely grooming of
the next generation to prepare and equip them for larger
Transforming family businesses into enduring legacies across responsibilities in future. Formulation of a clear
generations requires building them as institutions while succession plan with clearly defined roles and
keeping the organisation and the people managing it rooted
in human values. In order to transform family businesses responsibilities will help family businesses in avoiding
into lasting institutions, business leadership must adopt long- conflicts. The incumbent leader must mentor the
term perspective while maintaining strategic freshness. successor for a limited period of time and should let-go
Keeping their entrepreneurial spirit alive and building of control once the successor is prepared to manage
leadership capabilities is very important for family the affairs. Building capable teams augments the
businesses to successfully face future challenges. It is also support to successive leadership. It is important for
crucial that even as they grow into large organisations, family
businesses retain their familiness and unique strategic vision long-term sustenance that the successor is trained to
that can continue to provide them a competitive edge. Though act as a trustee and take everyone along. Responsible
competition can garner superior financial and other physical ownership is another important aspect essential to make
resources, it is the unique human capital resource that sets a family business long-lasting. Varying expectations of
the family businesses apart - this must always be valued different family owners must not hinder the family
whenever strategic decisions are made. Augmenting human business from its overarching goal of long-term growth
capital and strengthening familiness must be a core activity
for the family business. and profitability. Family businesses that act and fortify
on these five fronts transform themselves into long-
lasting institutions.

About the Authors
Navneet Bhatnagar is the Analyst and Professor Kavil Ramachandran is the Executive Director at the Thomas Schmidheiny
Centre for Family Enterprise, Indian School of Business.

"This article has been reproduced with permission from ISBInsight, the flagship research publication of the
Indian School of Business, India."

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]

March 2018 40

Competition Law Updates

European Commission fines maritime car carriers and car Supreme Court stays COMPAT order that imposed penalty
parts suppliers a total of €546 million in three separate on 3 car companies
cartel settlements The COMPAT by its order dated 09.12.2016 concurred
with the findings of the CCI and directed Ford, Toyota and
The European Commission Nissan, to remove all restrictions imposed through
has found that the Chilean agreements on auto parts suppliers so as to open up
maritime carrier CSAV, the market for spare parts, remove all restrictions on supply
Japanese carriers "K" Line, of spare parts by original equipment suppliers to
MOL and NYK, and the authorized dealers etc.
Norwegian/Swedish On appeal, Hon’ble Supreme Court has stayed the
carrier WWL-EUKOR operation of the COMPAT’s order and the matter, last
participated in a cartel listed on 22 February 2018, will now be taken up on
concerning intercontinental 19.04.2018.
maritime transport of Nine Japanese auto-part manufacturers file writ petitions
vehicles, and imposed a before the Delhi High Court
total fine of €395 million. Nine Japanese auto-part Companies (NOK Corporation,
Sumitomo, Motherson Sumitomo Wiring Systems, Toyo
G R Bhatia, Partner & Head, For almost 6 years, from Denso, etc.) challenged the order of investigation passed
Competition Law Practice Group, October 2006 to September by the Competition Commission of India (CCI) under
2012, the five carriers Section 26(1) of the Competition Act, 2002 (Act) and the
Luthra & Luthra Law Office formed a cartel in the notices sent by the Director General, CCI (DG)
requisitioning information pursuant to the order of
market for deep sea transport of new cars, trucks and investigation.
other large vehicles such as combine harvesters and The broad contention of the petitioners is that (a) they
tractors, on various routes between Europe and other have not been informed whether they are charged parties
continents. or third parties; (b) by rejecting their inspection
applications, the CCI is violating the principles of natural
The EC has ruled that the carrier ’s sales manager justice by not allowing the petitioners to have access to
coordinated prices, allocated customers and exchanged case material in order to effectively respond to the DG’s
commercially sensitive information about elements of notices. Arguments were advanced on 14.03.2018 and
the price, such as charges and surcharges added to prices will be continued on 12.07.2018.
to offset currency or oil prices fluctuations. CCI imposes penalties on three airlines for forming a cartel
to fix fuel surcharge
New Zealand blocks vehicle advertising merger The Competition Commission of India, vide its order
dated 07.03.2018 has imposed penalties on three airlines
The Commerce Commission has declined to grant Jet Airways (INR 39.81 crore), IndiGo (INR 9.45 crore)
clearance to Trade Me to acquire Motorcentral. In July and SpiceJet (INR 5.10 crore) for colluding to fix and
2017, Trade Me, an online marketplace and classified revise fuel surcharge rates on cargo flights.
advertising platform, sought clearance to buy The Competition watchdog said it imposed the penalties
Motorcentral, a Christchurch-based supplier of motor based on the revenue each airline generated through its
vehicle dealer management (DMS) software. DMS air cargo transport services. The fine was levied @ 3% of
software is used by motor vehicle dealers to manage their their average relevant turnover for the last three years.
businesses and may include functionality such as keeping The Commission expressed that fuel surcharge rates were
track of inventory, customer relationship management, meant to check volatility in fuel prices, but Jet Airways,
and uploading vehicle listings to online advertisers. IndiGo and SpiceJet were using them as a pricing tool
Trade Me currently operates Dealer Base which has some and therefore also passed a “cease and desist” order
of those functions. against the airlines

The merger would combine Trade Me, which is the most
popular online classified advertising platform for motor
vehicle dealers, and Motorcentral, which is the largest
provider of DMS products to independent motor vehicle
dealers in New Zealand. Based on the evidence received,
the commission could not exclude the real chance that
this could result in a substantial lessening of competition
in these markets, including deterring new entry.

41 March 2018

NADA Musings

Auto Industry Rejects Trump's Tariff Threats

Automotive companies on both sides of the Atlantic pushed But with more and more German cars made in America, the
back on President Donald Trump's talk of a trade war with nation's deficit with Europe's largest economy narrowed to
Europe using a similar refrain: Everyone will suffer if his about 64,000 vehicles last year.
rhetoric becomes reality. Volvo Cars CEO Hakan Samuelsson said that tariffs could
"Tariffs are not good for anybody," Steven Armstrong, Head, affect the carmaker's plans to export from a plant it's building
Ford Motor Co.'s European operations, said in a Bloomberg in South Carolina, where half of the 4,000 projected jobs are
Television story at the Geneva International Motor Show. "Any tied to shipping S60 sedans and XC90 crossovers to overseas
form of tariff is going to be bad news for us and lift our costs, markets.
and we're going to pass that through, probably to the consumer." 'No winner'
"There's no winner in any trade war," Didier Leroy, Executive
Big automakers such as Volkswagen AG and Toyota Motor Vice President at Toyota, said in an interview in Geneva. "The
Corp., smaller manufacturers such as Volvo Cars and PSA risk is for the end customer, who'll feel the financial impact
Group and even a group representing American auto dealers because he'll probably pay more."
echoed the sentiment in the wake of a tit-for-tat between Trump The steel and aluminum tariffs Trump announced last week
and European Commission President Jean-Claude Juncker. touched off a firestorm that could compromise negotiations
The comments suggest the auto industry could form a unified to rework NAFTA. US Trade Representative Robert Lighthizer
front after the President tweeted he could slap levies on said time is running out to redo the accord as Canada and
BMWs, Audis and other cars shipped from Europe if the US's Mexico pushed back against the levies that the president
planned tariffs on imported steel and aluminum are met with hasn't yet finalized.
retaliation. "I think the American government knows that in the past we
The war of words adds to uncertainty for the auto industry had agreements like NAFTA that shouldn't just be destroyed
already dealing with disruption stemming from volatile on a whim," Volkswagen CEO Matthias Mueller said. "We all
political environments, the decline of diesel and the advent put our efforts into globalization in the past decades, and I
of self-driving technology. think we shouldn't give up that idea so easily."
"The world is already chaos, so a little bit more, a little bit Combined, German car factories in the US produced 804,000
less, it's already chaos," Carlos Tavares, CEO of PSA Group, vehicles last year, with 430,000 of those exported outside
the maker of Peugeot, Citroen and Opel vehicles, said in an the country. The number of German cars imported into the US
interview in Geneva. "It's better that we have an open world has slid about 20 percent since 2014, to 494,000 vehicles,
where we can trade peacefully." the VDA said.
Trump tweeted over the weekend that European cars "freely GM's exit
pour" into the US and have created a "big trade imbalance." Trump's beef likely stems from the lack of US automakers in
Europe. While Ford is among the top mass-market brands in
the region, General Motors sold its German unit last year
after trying and failing to establish the Chevrolet nameplate
in Europe. Fiat Chrysler Automobiles sells Jeep vehicles in
the region, but Dodge and Chrysler models are rarities
because of the region's preference for smaller cars.
German automakers have been pursuing US expansion for
years. Since 2013, brands like Mercedes, VW and BMW have
added 5,700 jobs, increasing US staffing to 36,500 people,
according to the VDA. BMW's largest facility in the world is
in Spartanburg, SC, which makes crossovers including the X3
for customers in Germany and elsewhere, while Volkswagen
is expanding production in Chattanooga.

March 2018 42

NADA Musings

NADA Outgoing Chief Touts Political 'Seat at the Table'

Outgoing National Automobile Dealers Association Chairman Q: What do you think about the Trump administration's tax
Mark Scarpelli will remember his tenure as 14 months in reform?
which the organization gained a greater ally in the White A: Tax reform is good for the car-buying public as well as
House and dealers banded together in times of need. business owners, including small business owners such as
the majority of car dealers in America. If you put more money
Now, Scarpelli says, is as great a time into people's pockets, they're more free to save, go on trips,
as ever to be an auto dealer, as sales buy new homes and new automobiles — everybody wins in
remain healthy and NADA has a more that case.
prominent "seat at the table" to In our world, as automobile dealers, I'll give you an example.
influence regulatory issues under the There was a directive on the table with the new tax reform
Trump administration. about interest deductibility. Interest deductibility, in car
Scarpelli, a dealer since 1990, spoke dealers' world, is our lifeline. Many dealers have anywhere
about auto sales, the Trump from $12 million to $80 million in new automobiles sitting
administration and NADA's on their lots to show our customers. Along with that big
humanitarian efforts. inventory comes an interest bill every month.
Q: How did your tenure go as NADA chairman? There was a directive by members of Congress to not be able
A: I don't want to sound corny, but it has been one of my to deduct that interest floorplan on a monthly basis. We,
greatest chapters — both professionally and personally. As along with other business leaders from other industries,
an automobile dealer, to be able to walk in the path of other talked to the administration about deductibility and what it
great automobile dealers before me and help our industry would mean for jobs, stocking of inventory. And they listened,
out the way that I've been able to, along with a great NADA and they did not make this part of tax reform.
team, has been something I could have never fathomed. Therefore, letting businesses be able to conduct interest
Q: What made you most proud? deductibility was a win for everybody, and the administration
A: I've been involved with NADA, as a Director and now as saw it that way. That's one example of working together
current Chairman, for almost eight years and I can tell you across all lines, and having some smart tax reform.
the depth and knowledge, and the professionalism, of the Q: How was the auto industry in 2017 for dealers? How does
NADA professionals and staff is bar none No. 1. They truly 2018 look?
are interested in dealers and dealership businesses and how A: Surely, we're not at levels where we were a couple of years
the industry is going. They really have a vested interest in it. ago as far as automobile sales. The term has been used in the
I will also tell you the current administration is there for press and in public of a plateau. If this is a plateau, I'll take
businesses. We had a seat at the table with the previous this plateau all day long.
administration — not to make a political statement by any Our forecast and others' are still in the realm of 16.7 million
means — but the previous administration, as far as business or north of 16.7 million. It's a great time to be in the car
went, we didn't have quite a voice like we have now in regard business. There still is much, much pent-up demand.
to talking about smart tax reform, legislation, all of those Q: As sales slow, what are the biggest concerns facing dealers?
things. We do have a seat at the table. A: There are a couple of things. You've heard the expression,
Q: How much interaction have you had with the Trump "too fast, too soon," or "get caught speeding," however you
administration? want to characterize it. We had such a monumental, fast
A: Six or seven months ago, we were actually in the Roosevelt pace a few years back and we've plateaued a little bit. So,
Room in the White House for a meeting with Gary Cohn, you've got a couple of risks here for sure.
Economic Director, and Mike Pence, Vice President stopped You've got to make sure, as an automobile dealer, your
in our meeting for five minutes. When I tell you, "we have a expenses are in line and you're doing what you need to do to
seat at the table," we really have a seat at the table. We've make sure your fixed operations — meaning service, parts
had subsequent meetings about all different kinds of things and body shop — are solid. You have to make sure you're
with the administration — everything from NHTSA issues to concentrating on all areas of your business.
Department of Transportation and tax reform. We've had quite
the gamut to give suggestions and give fresh ideas.

43 March 2018

NADA Musings

You know, in the car dealership world, it's not just car sales. consider a new but will change their decision to a nearly
You've got five or six business units — new-car sales, used- new. Demand for used cars and trucks is real strong, very,
car sales, service, body shop, parts, finance and insurance very strong.
— under one roof at a car dealership. Q: Has NADA done enough to protect the franchised dealer
My best advice is to make sure each department is running model?
on all cylinders and that your expenses are in line to keep up A: We as an organization represent over 16,500 automobile
with customer demands and volume. dealers coast to coast. Those are rooftops in small-town
Q: Will the rise in incentive spending continue? Are dealers America and big metro areas. We, as automobile dealers,
being pressured by the companies to increase incentives? collectively, employ over 1.1 million. That's more than
A: The incentive levels vary mainly on stocking levels for manufacturing in the automobile world.
inventories around the country. If the vehicle is turning faster We are quite the grass-roots force in America. In many cases,
than it can be produced or it has a little days' supply, the we are the largest tax base in our towns and we're the first
incentive level will probably be a lot less on that particular ones to raise our hands to support the Little League teams
vehicle versus one where we might have 120 days' supply on and senior centers and other things that are noteworthy
it. That never changed. That's always moving. The other thing causes.
is there are many car companies that have emphasis on SUVs, The franchised system itself has never been stronger. NADA
or trucks, or a certain sedan. They will always rely on supports the states in their causes and their endeavors with
incentives for customers to buy a particular vehicle. It's a making sure that legislation is conducive to do business,
battle. These companies want to be No. 1 in certain areas. and to protect the franchised model.
Q: How did the used-car market impact dealers in 2017? Q: What advice would you give the incoming Chairman?
What is expected in 2018? A: My advice to auto dealers and NADA is to continue to be
A: With all the new cars and trucks that are being sold, the diligent and be on the offense, not on the defense. We've been
flow has been pretty steady. But a new car or truck is not for able to direct and guide our business of late in quite a different
everybody. There are affordability issues. way than we have in the last eight years. We have a seat at
One of my mantras over this past year has been vehicle the table and now's the time to make sure that we're out there
affordability. There are many people who walk in and will talking about auto dealers and being the voice of car dealers.

NADA Foundation Launches Major Workforce Initiative

The NADA Foundation’s Board of Trustees has approved plans technicians. There is currently very little brand-neutral
and funding for a largescale workforce initiative to promote information on training centers.
the value of dealership jobs, especially service technicians, “What we found are a lot of competing silos that don’t appear
in the automotive retail industry. to be talking to each other, which makes getting into a
The initiative – which will include a new NADA Foundation technician career unduly burdensome on potential recruits,”
website, videos, digital & social media content, and outreach said Jonathan Collegio, NADA’s Senior Vice President of Public
to opinion leaders – will be developed in 2018 and launched Affairs, whose department administers the NADA Foundation.
at the 2019 NADA Show in San Francisco. The Foundation Collegio cited competing information on training centers as
will also begin fundraising for the initiative in 2019. a major hindrance to recruiting, as OEMs often only refer to
“Local dealerships provide more than a million good-paying training centers they are partnered with, while ignoring other
jobs in sales, management and service, which benefit programs. For example, on its website, one major automaker
communities everywhere,” said NADA Foundation Chairman references its Baltimore and Chesapeake, Va., T-10 training
Annette Sykora, who is the dealer principal of Smith South centers, but ignores a major training center near Washington,
Plains Ford and Lincoln in Levelland, Texas, and a former DC, because it is not associated with that automaker. A
NADA Chairman. potential recruit in the Washington, D.C., area may therefore
The NADA Foundation developed the framework for its not know there is a training center nearby.
workforce initiative over the course of 2017, after identifying There is also a lack of targeted messaging and marketing to
the great need to harmonize efforts from automakers, training promote the careers, which Collegio says the NADA
centers, and dealerships – especially on recruiting Foundation will address in its marketing efforts

March 2018 44

Declaration of Ownership

Form IV (See Rule 8)

1. Place of Publication : Federation of Automobile Dealers Associations
805, Surya Kiran, 19, Kasturba Gandhi Marg
2. Periodicity of its publication New Delhi – 110 001
3. Printer’s Name
: Monthly

: Saharsh Damani

Whether Citizen of India : Yes

If foreigner, state the country of origin : Not Applicable

Address : 126, 1st Floor
4. Editor’s Name Uday Park, South Delhi
Delhi – 110 049

: Saharsh Damani

Whether Citizen of India : Yes

If foreigner, state the country of origin : Not Applicable

Address : 126, 1st Floor
5. Name and addresses of Individuals who Uday Park, South Delhi
Delhi – 110 049
own the Newspaper and partners or
Share holders holding more than one : Federation of Automobile Dealers Associations
per cent of the total capital. 805, Surya Kiran, 19, Kasturba Gandhi Marg
New Delhi – 110 001
A section 25 company (now section 8 of Companies Act,
2013) not for profit.

I, Saharsh Damani, hereby declare that the particulars given above are true to the best of my knowledge and belief.

Sd/-
Saharsh Damani

Publisher
on behalf of
Federation of Automobile Dealers Associations

45 March 2018

Surveys & Studies

White Remains Most Popular Car Colour Globally

Axalta Global Automotive 2017 Colour Popularity Report

For an amazing seventh year in a row, white retained its top North America
ranking as the most popular car automotive colour • White grew two per cent and totals 27 per cent holding
internationly in the Axalta’s 65th edition of Global
Automotive 2017 Colour Popularity Report . the top preference for eleven years in a row.
At 39 per cent, it is up two points over last year and leads • The truck segment is growing and showed a six per cent
black by 23 per cent. Japan has the highest preference for
pearlescent whites and is viewed as a luxury colour space. increase for white…especially in solid whites. The luxury
Although white increased in most regions, no other region segment saw a five per cent increase in white pearl for a
produces more white cars than China as 62 per cent of new total of 29 per cent.
vehicles sold are white. • Blue is gaining popularity, especially in the compact /sport
Black remains in second place in the world, down two per segment where it gained six per cent to total 16 per cent.
cent from last year. Black is most popular in areas of Japan South America
(22 per cent) and Europe (21 per cent). Black is least popular in • Gray is the rising star in South America moving from 8
India at only three per cent. per cent to 11 per cent.
Gray and silver are tied for third place for the second year in • Red was up four per cent this year to nine per cent overall.
a row; both are unchanged at 11 per cent. Gray saw a three • Silver continues to keep second place at 22 per cent, but
per cent increase in popularity in Europe, Africa, and South white is far ahead at 41 per cent total.
America. Overall, there has been interest in this space as • Black and gray tie at 11 per cent.
this dynamic neutral can vary in lightness and hue. Gallant Russia
Gray was the Automotive Colour of the Year 2017 and received • White remains the top colour rising four per cent for a
positive feedback on its global appeal. Gallant Gray followed total of 32 per cent.
Radiant Red (2015) and Brilliant Blue (2016) as Colours of • Beige/brown and silver increase in popularity.
the Year. Europe
While the top three spots are dominated by neutrals, • At 20 per cent, gray is more popular with Europeans
conclusions that buyers are looking away from bold colours than any other region. Gray’s three per cent increase
could be drawn. A closer look at the numbers, however, shows was driven by effect colours.
pockets of colour across the map. In North America, blue is • For the first time in more than a decade, silver stops its
up two per cent and one per cent in Europe, Africa, and Asia. fall and stagnates at 11 per cent. Only the Intermediate/
Red is up four per cent in South America. Yellow/gold colours MPV sector continues to experience a decline.
hold the number five spot in China. Green, however, still lags • The steady increase in blue underlines, that the tendency
in popularity worldwide but is predicted to increase in toward more chroma will return to EU OEMs’ palettes.
various shades, including blue-shade greens. This year, blue could crack the 10 per cent hurdle.
Asia
Colour Preferences at a Glance • Not surprisingly, white stays on top in China and keeps
growing up five per cent over last year. White pearl grows
World Colours six per cent with mica and other various flake effects
• White increases two per cent to hold its reign for the including glass and aluminium flake. Solid white drops
just one per cent.
seventh year. • Light colours dominate India: white is 32 per cent and
• At 39 per cent, white has grown 10 per cent in five years. silver is 30 per cent.
• Following the trend of pearl colours being employed on • Japan still shows the strongest preference for white pearl
at 28 per cent up one per cent from last year. Colourful
luxury vehicles, white pearl increased four per cent while versions of blue, red and beige/brown hold steady.
solid white decreased two per cent.
• Gray and silver hold steady at 11 per cent each, but
black continues to decline.
• Blue holds the top spot for the most colourful hue at
seven per cent.

March 2018 46

• South Korea sees increases in blue, beige / brown and but defend their second and third place positions.
gray showing trends toward more colourful versions.
Africa • With a three per cent gain, gray bounces up and reaches
double-digits for the first time.

• White rises by two per cent with almost half of all vehicles • The region shows a one per cent increase in blue and
produced (49 per cent). beige / brown versus a one per cent decrease in red and

• In contrast, black and silver lose three per cent each yellow

47 March 2018

PASSENGER VEHICLE SALES - FEBRUARY 2018

Domestic Sales Feb-18 Feb-17 Growth Y-o-Y (%) Exports Feb-18 Feb-17 Growth Y-o-Y (%)
1,207 40 2,917.50
OEM 1,941 - - OEM 14,924 -4.87
34 319 -89.34 FCA India 7,698 15,688 22.19
FCA India 261 40.61 Ford India 600 6,300 -19.79
Fiat India 367 8,338 General Motors 10,917 748 4.90
Force Motors 9,041 1,809 8.43 Honda Cars 46 666.67
Ford India 67 - Hyundai Motor 679 10,407 -5.96
General Motors - 14,249 Isuzu Motors 15 6 -
HM Finance Corp 20 42,327 -70.15 Mahindra 11,790 24.08
Honda Cars 11,650 109 -18.24 Mahindra Electric 6,391 722 -43.92
Hyundai Motor 44,505 20,602 Maruti Suzuki 235 - -62.76
Isuzu Motors 271 114 5.15 Nissan Motor 342 97.69
Mahindra 22,339 120,599 148.62 Renault India 865 9,502 47.11
Mahindra Electric 50 4,807 Tata Motors 4,769 11,397 -2.45
Maruti Suzuki 136,648 11,198 8.43 Toyota Kirloskar
Nissan Motor 4,738 1,206 -56.14 Volkswagen 60,478 631
Renault India 7,305 13,957 13.31 173
Skoda Auto 1,317 11,543 Total 588
Tata Motors 20,022 3,965 -1.44 4,889
Toyota Kirloskar 11,864 -34.77
Volkswagen 3,217
9.20
Total 275,329 43.45

2.78
-18.87

255,470 7.77 61,091 -1.00

Domestic Sales + Exports

OEM Feb-18 Feb-17 Growth Y-o-Y (%)

FCA India 3,148 40 7,770.00 Segment wise (Domestic Sales + Exports)
Fiat India 34 319 -89.34
Force Motors 261 40.61 Category Feb-18 Feb-17 Growth Y-o-Y (%)
Ford India 367 24,026 -0.25
General Motors 23,965 8,109 -5.07 Cars 226,322 222,090 1.91
HM Finance Corp -70.15
Honda Cars 7,698 67 -18.32 UVs 93,396 77,575 20.39
Hyundai Motor 20 14,997 5.10
Isuzu Motors 52,734 175.65 Vans 16,089 16,896 -4.78
Mahindra 12,250 7.94
Mahindra Electric 55,422 115 -42.98
Maruti Suzuki 21,324 14.09
Nissan Motor 317 -31.32
Renault India 23,018 114 -36.26
Skoda Auto 130,101 9.20
Tata Motors 65 16,204 44.12
Toyota Kirloskar 148,438 11,829 4.93
Volkswagen 11,129 -9.80
1,206
7,540 14,130 6.08
1,317 12,131
20,364
12,729 8,854
7,986
316,561
Total 335,807 Total 335,807 316,561 6.08
Source: SIAM

March 2018 48

TWO-WHEELER SALES - FEBRUARY 2018

Domestic Sales Exports

OEM Feb-18 Feb-17 Growth Y-o-Y (%) OEM Feb-18 Feb-17 Growth Y-o-Y (%)
Bajaj Auto 175,489
H-D Motor 142,287 23.33 Bajaj Auto 122,025 102,671 18.85
Hero MotoCorp 273
HMSI 605,355 266 2.63 H-D Motor 432 264 63.64
India Kawasaki 489,638 511,954 18.24 Hero MotoCorp 24,242
India Yamaha 370,122 32.29 HMSI 30,144 12,618 92.12
Mahindra 2W 204 137.21 India Yamaha 20,251
Piaggio 60,907 86 -10.57 23,520 28.16
Royal Enfield 68,104
Suzuki 499 14,578 38.91
Triumph 5,508
TVS Motor 71,354 1,735 -71.24 Mahindra 2W 1,230 2,804 -56.13
Total 46,147
4,410 24.90 Piaggio 206 156 32.05
87 56,737 25.76 Royal Enfield 1,723
230,353 33,641 37.17 Suzuki 5,684 1,702 1.23
1,685,814 -3.33 TVS Motor 50,589
90 33.45 6,630 -14.27
172,611
32,588 55.24

1,362,043 23.77 Total 256,526 197,531 29.87

Domestic Sales + Exports Feb-17 Growth Y-o-Y (%)

OEM Feb-18

Bajaj Auto 297,514 244,958 21.46

H-D Motor 705 530 33.02

Hero MotoCorp 629,597 524,572 20.02

HMSI 519,782 393,642 32.04

India Kawasaki 204 86 137.21

India Yamaha 81,158 82,682 -1.84

Mahindra 2W 1,729 4,539 -61.91 Segment wise (Domestic Sales + Exports)

Piaggio 5,714 4,566 25.14 Category Feb-18 Feb-17 Growth Y-o-Y (%)

Royal Enfield 73,077 58,439 25.05 Scooters/ 589,282 472,785 24.64
Scooterettes
Suzuki 51,831 40,271 28.71
Motorcycles/ 1,278,985 1,008,556 26.81
Step-Through
Triumph 87 90 -3.33

TVS Motor 280,942 205,199 36.91 Mopeds 74,073 78,233 -5.32

Total 1,942,340 1,559,574 24.54 Total 1,942,340 1,559,574 24.54
Source: SIAM

49 March 2018