Federation of Automobile Dealers Associations | fada.in | Estb: 1964 Feb. - Jun. 2020 | Vol. 20 | Issue: III | Pages : 60 | Rs. 50
fada 4, President’s Message
Journal Be the Change You Wish To See!
Insights from the Automobile Retail Industry 10, India Economics
Inflation on Downtrend | IIP Picks Up from
Lows | Trade Surplus Reflecting Weaker Demand
13, Demystifying GST
Hopes on Non-Levy of GST on
Director's Remuneration
18, Dealership Profitability 21, NADA Auto Show
Customer Experience Trends Why Dealers Love Auto Shows?
to Watch Out The answer is simple: Auto shows sell cars.
32, Automotive & Mobility 27, Business Achievers
How E-Scooters Can Win a GreyOrange: The Rise of the Robots 2.0
Place in Urban Transport?
From L to R: Samay Kohli, Group CEO and Co-Founder of GreyOrange and
Akash Gupta, the Co-founder and CTO of GreyOrange
contents Federation of Automobile Dealers Associations | fada.in | Estb: 1964 Feb. - Jun. 2020 | Vol. 20 | Issue: III | Pages : 60 | Rs. 50
Feb-Jun 2020 | Vol. 20 | Issue: III fada 4, President’s Message
Be the Change You Wish To See!
4 President’s Message Journal
10, India Economics
Be the Change You Wish To See! Insights from the Automobile Retail Industry Inflationon Downtrend | IIP PicksUp from
Lows |Trade Surplus ReflectingWeaker Demand
6 Auto Retail Registration
13, Demystifying GST
FADA Releases June’20 Vehicle Registra on Data Hopes on Non-Levy of GST on
Director's Remuneration
10 India Economics
18, Dealership Profitability 21, NADA Auto Show
Infla on on Downtrend | IIP Picks Up from Lows | Trade Surplus Reflec ng Weaker Demand
Customer Experience Trends Why Dealers Love Auto Shows?
12 Competition Law Updates to Watch Out The answer is simple: Auto shows sell cars.
13 Demystifying GST 32, Automotive & Mobility 27, Business Achievers
Hopes on Non-Levy of GST on Director's Remunera on How E-Scooters Can Win a GreyOrange: The Rise of the Robots 2.0
Place in Urban Transport?
16 Govt Circular
Printed and Published by Saharsh Damani on behalf of Federa on of
Clarifica on in respect of Levy of GST on Director’s Remunera on Automobile Dealers Associa ons, 805, Surya Kiran, 19, K G Marg, New
Delhi-110 001.
18 Dealership Pro itability
Printed at Sita Fine Arts P Ltd, A-16, Naraina Indl Area - II, New Delhi
Customer Experience Trends to Watch Out: A Wake Up Call for Car Dealerships
Editor: Saharsh Damani
21 NADA Auto Show
Advertisers’ Index 30-31
Why Dealers Love Auto Shows? 59
The answer is simple: Auto shows sell cars. Ingenico Group 05
Kuttukaran Group 55
24 Membership Provincial Group 60
Shriram Transport Finance
27 Business Achievers VE Commercial Vehicle
GreyOrange: The Rise of the Robots 2.0 Editor, F A D A Journal and CEO, F A D A
32 Automotive & Mobility Mr Saharsh Damani
T +91-11-6630 4852, 2332 0093, 2332 0095
How E-Scooters Can Win a Place in Urban Transport E [email protected]
37 Consumer Case Studies Of ice Bearers Vice President
Mr Vinkesh Gulati
40 Digital Retailing President E [email protected]
Mr Ashish Harsharaj Kale
Offers are Op ons: Here’s How Digital Retailing Helps You Get to the Final Deal? E [email protected] Hony. Treasurer
Mr C S Vigneshwar
42 Leadership Hony. Secretary E [email protected]
Mr Manish Raj Singhania
How New CEOs Can Boost Their Odds Of Success? E [email protected]
46 Road Safety
Preven on & Using Taxa on to Decongest Roads
52 Statistics
Vehicle Sales, Y-o-Y Growth & Market Share - June 2020
56 Industry Track
Covid-19 Jolts Auto Sales
58 Chart of the Month
President’s Message
Be the Change You Wish To See!
One of the simplest way to allowed sale of 10% BS4 remedy of our Legal
vehicles within 10 days of System.
contribute is to respond to opening up of lockdown. This
was applicable everywhere As we prepare for a
the various surveys that FADA except Delhi NCR. Leadership transi on this
AGM in September, FADA will
rolls out - be it Monthly Auto The Apex Court has also said be holding its first ever
to treat these vehicles as Elec ons for the Governing
Retail Pulse or Dealer unsold, to take it back and Council and I am Extremely
refund the amount to the proud of the fact that I am
Sa sfac on Study (which purchaser. lucky to roll out this ini a ve
within my tenure.
FADA intends to bring out FADA has recently wri en to
our OEM's for return of all My Personal request to each
going forward) or such BS-4 Vehicles which and every member of FADA to
become non-saleable dealer whole heartedly par cipate in
sugges ons/ feedback which stock and are not allowed by this process and help
the Apex Court to be sold strengthen the Democra c
ASHISH HARSHARAJ KALE is requested from Auto Retail and registered, just as they Founda on of our
have taken back from the associa on.
PRESIDENT, FADA Community on various dra NCR Region which the Court
had not permi ed to be sold. With good monsoons across
amendments being brought For vehicles sold ll 31st the country and between the
March, the Court has asked lockdown and unlocking
Dear Members and Dealer about by the Government, so Ministry of Road Transport & happening in various parts of
Friends, that your Federa on is able to Highways (MoRTH) to verify the country, let’s hope that
put out credible reports/ vehicle details which we have Auto Sales rebound full
submi ed and whether these thro le as we welcome the
I am happy to inform you that submit sugges ons/ vehicles are on Vahan/State Fes ve Season in some me.
FADA Journal which had taken recommenda ons to make portal or not. On basis of
a pause due to Covid-19 the Dealer’s views/concerns Ministry’s report, the court As we get into the rou ne of
lockdown is resuming its heard at the right me and at will announce its decision on business, please ensure that
monthly journey once again. the right pla orm. further registra on in its next all in your Dealership Family
hearing on 23-07-2020. strictly follow all the Safety
All the rich content which To be able to sustain the Precau ons as the Spread of
used to be delivered to you beau ful businesses we are in By the me this edi on of Covid-19 con nues and one
will once again start coming from disrup ons which have FADA Journal reaches you, we lax moment can break the
from this very edi on. become the new norm I will would be aware of the details flow of our Business
of the hearing and the Momentum.
Covid-19 has given a clear once again request all of you direc on by the Court in the
ma er and hopefully it brings Do take Care, Stay Safe, Stay
message that things will not to con nue to work towards a respite to all the sold and Strong and Stay United.
unregistered BS4 vehicles
be same again for us, for our Achieving 5% PBT with your across India. This too shall soon pass.
family, for our business and OEMs ll it happens. Our Let me once again assure Happy Selling!
you that FADA will
for all the stakeholders with united, indirect and direct, con nue to fight for the Warm Regards,
Dealer's legi mate rights
whom we deal with on a daily con nued efforts through Ashish Harsharaj Kale
ll the last available President
basis. I have been regularly various means will make this
interac ng with you on happen and I am confident
WhatsApp and Email about about this. Already, the
FADA taking many efforts to indica ons are visible as some
bring to the forefront, the OEMs are acknowledging the
issues that we face as dealers need for an Overhaul of the
and also making con nuous way Dealer Business is, but
efforts in ge ng transparency are yet to ini ate these into
in the Auto Retail Trade. ac on.
I will once again repeat that if Regarding BS-4 ma er,
we have to change the way despite the best efforts of our
our trade works in these legal team to present our
dynamic mes and if we have bonafides, the Hon'ble SC
to ensure that Dealers get according to its latest order
their dues, we will have to dated 08-07-2020 has
invest me and work towards par ally revoked its 27-03-
changing it for the be er. 2020 order where it had
4 F A D A Journal Feb-Jun 2020 | fada.in
Auto Retail Registration
FADA Releases June’20 Vehicle Registration Data
• Vehicle Registra on for June tumbles by -42% as the Indian Economy con nues to ba le with Covid-19.
• On a YoY basis, 2-Wheeler degrows by -40.92%, 3-Wheeler by -75.43%, CV by -83.83%, and PV by -38.34%. Tractors
registra ons con nue to march ahead with June numbers showing a growth of 10.86%.
• Ease in Na onwide lockdown (Unlock 1.0) has boosted the number of vehicles registered compared to May last month.
• Robust Demand recovery observed in rural market leading to rise in sales volume of tractors, followed by 2W, small
commercial vehicles. However, M&HCV and PV sales par cularly in Urban pockets play laggards as Lockdown persists in
many Ci es.
• Demand boosters from the Government can ensure speedier Auto demand revival. A rac ve vehicle scrappage policy is
one of the dire needs for revival of CV market.
All-India Vehicle Registra on Data for June’20 with YoY Comparison
PASSENGER Commercial
VEHICLE Vehicle
June’20 June’19 June’20 June’19
1,26,417 2,05,011 10,509 64,976
- 38.34% - 83.83%
Two TRACTOR Three
Wheeler Wheeler
June’20 June’19
June’20 June’19 45,358 40,918 June’20 June’19
7,90,118 13,37,462 11,993 48,804
10.86%
- 40.92% - 75.43%
Source: FADA Research
Disclaimer:
1. The above numbers do not have figures from AP, AN, MP, LD & TS as all these States/UT’s are not yet on Vahan 4.
2. Online Survey has a limited sample size and reflects an overall trend.
3. Vehicle Registra on Data has been collated as on 13.07.20 and in collabora on with Ministry of Road Transport & Highways, Government of India and has
been gathered from 1,230 out of 1,440 RTOs.
6 F A D A Journal Feb-Jun 2020 | fada.in
Auto Retail Registration
State-wise Vehicle Registra on Analysis
fada.in | Feb-Jun 2020 F A D A Journal 7
Auto Retail Registration
State-wise Vehicle Registra on Analysis
8 F A D A Journal Feb-Jun 2020 | fada.in
Auto Retail Registration
State-wise Vehicle Registra on Analysis
fada.in | Feb-Jun 2020 F A D A Journal 9
India Economics
Inflation on Downtrend | IIP Picks Up from Lows |
Trade Surplus Reflecting Weaker Demand
Headline CPI Released A er Amongst Food Infla on, prices Outlook- Monetary Easing manufacturing was up to 30.8
Two Months of protein products increased Should Con nue in May from low of 27.40 in
by 16.22% YoY for the second April and has improved further
As headline CPI was released consecu ve month. Prices of Though the headline infla on to 47.2 in June 2020.
forJunea er2months,theinfla on pulses eased off to 16.7% YoY is a li le above RBI’s target
stood at 6.09% YoY above the as compared to 21% YoY in band, it is immaterial in mes Clearly, with easing of
Bloomberg consensus May as supply dynamics of nega ve growth, with lockdown restric ons,
es mates of 5.30% but eased improve. While fruit prices output gap vast open. RBI has economy is picking up.
off ~20bps from the imputed remained flat in June against a to be in accommoda ve mode
value of 6.27% YoY in May. 2% increase in April and May, and con nue with monetary Manufacturing picks up on
infla on in vegetables eased easing in the form of MoM basis but S ll Shows A
Core infla on rose by 5% YoY, off to 2% YoY as compared to conven onal rate cuts while Sharp Contrac on
gaining momentum from 5% YoY in May and a huge also including unconven onal
up ck in Gold prices but up ck 23.6% YoY in April. tools such as deficit financing. Manufacturing which
analysts are of the view that Vegetables, that caused some contributes ~77% to the IIP
these numbers may head of the biggest upward swings IIP Shows Pickup numbers remained sluggish at
south hereon. The aggregate in food infla on in the past six ~-40% YoY, though showing a
demand in the economy months might have moderated IIP con nued to contract in pick up from lows of -67% in
remains weak and for good. May, albeit at a slower pace. April. Of the 23 manufacturing
improvement in supply will May reading came in at -35% industries, only pharma has
offer some comfort to the Fuel and Light infla on YoY compared to the revised - shown growth at 2.5% YoY, as
infla on numbers. increased 2.7% Y-o-Y in June, 57.6% YoY in April. Eight core demand of healthcare
from 1.4% Y-o-Y in May as GoI data which contributes ~40% increases. The remaining 22
Food Infla on: Proteins Pick hiked du es despite lower to the IIP, moved up to -23% industry groups have
Up, Fruits and Vegetables crude prices globally. YoY in May from -37% YoY in con nued to contract but at a
So en April. Similarly, PMI slower pace. Mining
Source: RBI & FADA Research
10 F A D A Journal Feb-Jun 2020 | fada.in
India Economics
contracted by -21% in May and YoY in May from -85% YoY in are largely essen als have hereon. A mechanism for
electricity showed contrac on April. Government capex for contracted the least at 12% demand crea on in form of
of -15% on YoY basis. the month of Apr-May has Yo Y, n o r m a l i z i n g f r o m fiscal push con nues to be the
remained healthy. Most contrac on of 49% YoY in April. need of the hour. With a huge
Eight core data showed pick up cement companies have Consumer Durables, however, global s mulus, global
in coal, crude oil & natural gas. hinted at be er outlook than contracted by -68% YoY in May, demand might revive faster
previously expected. The from near shut down in April. than domes c demand and
Some up ck in capex cycle? cement produc on for May is produc on numbers could see
at 22MT compared to 24MT in Outlook- Policy Response some up ck from it. Overall, in
Capital goods contracted by - March and 30MT in February. Needed For Demand Revival the absence of s mulus, the
64% YoY in May from a near path for a pickup in IIP
shutdown at -93% YoY in April. On the consumer goods front, With States op ng for par al numbers may se le at below
Infrastructure and consumer consumer non-durables which lockdown, the up ck in high pre- Covid numbers.
goods also contracted by -42% frequency data might stall
IIP Picks Up From Lows
Source: MOSPI & FADA Research
New (Toll-free)
number of GST
Portal Help Desk:
1800-103-4786 from
26th Feb 2020.
The existing no.
0120-4888999 will be
discontinued.
fada.in | Feb-Jun 2020 F A D A Journal 11
Competition Law
Competition Law Updates
G R Bhatia listed before the SC for final Separately, in another European Commission to
disposal on 21.04.2020. challenge to the CCI’s order, conduct an an trust probe
Partner & Head However, it is to be noted that the COMPAT concurred with into $50 billion merger
Competition Law Practice Group only extremely urgent ma ers the findings of the CCI and between Fiat and PSA
Luthra & Luthra Law Office are being taken up through directed Ford, Toyota and
video conferencing mode in Nissan to remove all The cap oned merger, which
Supreme Court to light of the COVID-19 outbreak. restric ons imposed on auto could result in the combined
adjudicate on allega ons parts suppliers so as to open en ty becoming the world’s
of resale price maintenance SC to adjudicate on the issue up the market for spare parts fourth-largest carmaker,
(RPM) against Hyundai of restric ons on the supply of and supply by Original proposed by Fiat Chrysler and
spare parts to individual Equipment Suppliers to Peugeot maker PSA, has come
Vide order dated 14.06.2017, service providers authorized dealers. On appeal, under the scanner of the EC for
the Compe on Commission the SC stayed the opera on of their high combined market
of India (CCI), a er a detailed As discussed in our previous the COMPAT ’s order on share in the individual/small
analysis of the findings arrived monthly updates, on 08.02.2017 and the ma ers vans segment which would
at by the Director General (DG) 27.07.2015, the CCI had are pending for admission. give them an unfair advantage
in the inves ga on report had imposed a penalty of Rs. 420.6 (a er no ce). over compe tors Ford and
held that Hyundai had imposed crore on Hyundai as well as Renault. The two companies
ver cal restraints of RPM and separately found Toyota, Addi onally, the 14 car were given me ll 10.06.2020
Tying -In, in viola on of Sec on Nissan and Ford along with 14 manufacturers that were to offer concessions to the EC
3(4)(e) [Resale Price other car manufacturers to be found to be viola ng trade to allay an trust concerns.
Maintenance] and Sec on viola ng the Compe on Act norms in the spare parts and However, they refrained from
3(4)(a) [ e-in arrangements] for allegedly restric ng the a er-services market, in India, doing so, thereby triggering a
of the Act. CCI also imposed a supply of genuine spare parts and were imposed a total four-month long inves ga on
penalty of 87 crores on Hyundai. and diagnos c tools to penalty of Rs. 2545 crores on by the EC. Interes ngly, the
individual service providers. them, challenged the CCI order two companies had foreseen
The NCLAT, by way of its order as well as the cons tu onality such an inves ga on and
dated 19.09.2018, set aside Hyundai challenged the of the Act before the Division factored it into the meline for
the order of the CCI, primarily cons tu onality of the CCI Bench of the Delhi High Court. the merger, which is scheduled
on technical grounds of alleged order before the Madras HC, The Delhi HC directed the car to be completed in the Q12021.
non-apprecia on of evidence however, both the Single & makers companies to
independently by the CCI and Division bench upheld the CCI approach the NCLAT over the Turkish Compe on Board
relying completely on the order. On a challenge to the ma er of challenging their launches inves ga on into
findings given in the DG's N C L AT, H y u n d a i wa s penal es and directed that a Audi, Porsche, Volkswagen,
inves ga on report. The CCI compelled to deposit 10% of judicial member be appointed Mercedes-Benz, BMW
appealed the said decision of the CCI penalty imposed on it at the CCI. The car
the NCLAT before the SC. The and also comply with the CCI’s manufacturers instead The Turkish Compe on Board
ma er has been tenta vely direc ons. On appeal to the challenged the order of the has launched an inves ga on
SC, the SC vide its order dated Delhi HC before the SC and the into the above-men oned
17.11.2018 has stayed the said apex court has stayed the German carmakers, to
penalty and the ma er was penalty and the ma ers are determine whether they have
listed for hearing on scheduled to be listed on a violated compe on laws.
20.01.2020. Since the ma er is future date. General Motors Pursuant to a preliminary
pending on merits before the appealed the decision of the inves ga on, the Board on
NCLAT, the SC while con nuing Delhi HC before the NCLAT, 11.06.2020 reviewed findings
the stay on penalty, disposed which has been adjourned on therein and ordered a probe.
of the appeal, with a direc on 31.01.2019 as the ma er was on the basis of claims against
to the NCLAT to dispose of the already pending for the companies for breaches of
appeal on merits, expedi ously, considera on before the SC. security&environmentcoopera on
without being influenced by and for sharing compe vely-
the order of the SC. sensi ve informa on.
12 F A D A Journal Feb-Jun 2020 | fada.in
Demystifying GST
Hopes on Non-Levy of GST on Director's Remuneration
DR SANJIV AGARWAL Most of the automobile company would be service by directly or indirectly, holds
Chartered Accountant dealers i.e., members of FADA an employee to the employer, more than ten percent of
M/s Agarwal Sanjiv & carry on their business as a in which case the same cannot the outstanding equity
Company corporate en ty, be it a private be a supply and hence, there is shares of the company.
or public limited company. As a no ques on of levy of GST
MS NEHA SOMANI company, they will be having either in the hands of the From the above defini on of
Chartered Accountant whole me directors as well as company under reverse charge the Companies Act, it is very
M/s Agarwal Sanjiv & non-execu ve directors. The basis or in the hands of the clear that the other than the
Company ques on of taxability of director himself. independent director, all other
director’s remunera on has directors either whole me or
been a subject ma er of Employee and Employer otherwise is considered as
dispute so far as taxability is rela onship employees of the company.
concerned. The recent
advance rulings on the subject The terms employee and Sec on 149(6) defines the
have created more confusion employer are not defined independent director to mean
than clarity on this issue. Here under the GST Act and the a director other than a
is an a empt to look into the same must be understood in managing director or a whole-
taxability aspect in the light of common parlance and with
law and advance rulings. the aid of other laws. me director or a nominee
director.
Supply – meaning and scope Explana on to Sec on 62(1)(b)
of the Companies Act, 2013 So, it is ample clear that the
Sec on 7 of the CGST Act, 2017 defines employee as under: managing director, a whole-
provides the defini on of
supply. Sec on 7(2)(a) ‘‘Employee’’ means- me director and a nominee
provides the ac vi es or director shall be considered as
transac ons specified in a) a permanent employee of employees of the company.
Schedule -III would be treated the company who has
neither as a supply of goods been working in India or However, in case of other
nor a supply of services. outside India; or directors who are not
Sec on 7(2) is a non-obstante execu ve directors but are
clause star ng with b) a director of the company, simplicitor director on the
“Notwithstanding” which whether a whole- me board and also don’t get salary
overrides Sec on 7(1) and director or not but from the company are not
hence even if an ac vity or a excluding an independent employees of the company.
transac on is covered under director; or Such directors do not earn
the scope of supply if the same salary but are remunerated by
finds place in schedule III, it c) an employee as defined in way of si ng fees or in any
would not be supply of either clauses (a) or (b) of a other manner but not salary.
goods or service. subsidiary, in India or
outside The acid test for taxability is
S.No. 1 of the Schedule III ibid therefore, employment which
treats the services by an India, or of a holding company can be substan ated by the
employee to the employer in of the company but does not following evidences:
the course of or in rela on to include-
his employment neither a) Employment contract or
supply of goods nor supply of (i) an employee who is a appointment le er
services. promoter or a person
belonging to the promoter b) Board resolu on
In this context, it would be group; or
important to analyse whether c) Minutes
the service of director to the (ii) a director who either
himself or through his d) Sec on under which TDS
rela ve or through has been deducted
anybody corporate,
e) A c co u n n g e nt r y fo r
salary or remunera on
fada.in | Feb-Jun 2020 F A D A Journal 13
Demystifying GST
The clear interpreta on of Director is in rela on to the The applicant sought Advance It is, therefore, ruled that:
sec on 7 read with entry (i) of services provided by the ruling on whether GST is
schedule 1 would therefore, Director to the company and payable under Reverse Charge a) The considera on paid to
indicate that if employer the recipient of such service is Mechanism vide No fica on the Directors by the
employee rela onship exists, the company as per sec on No. 13/2017- Central Tax (Rate) applicant company will
GST may not be leviable. 2(93) and the supplier of such dated 28-6-17 on the salary a ract GST under reverse
service is the director. The paid to Director of the charge mechanism as it is
Advance Rulings on GST on ques on was not whether this company who is paid salary as covered under entry No. 6
director’s remunera on service is taxable or not, but per contract. Further, whether of No fica on No.
whether this supply of services the situa on would change 13/2017-Central Tax
The relevant Advance Rulings is liable to tax under reverse from (a) above if the Director (Rate) dated 28.06.2017
are briefly discussed charge mechanism. also is a part me Director in issued under sec on 9(3)
hereunder: other company also. of the CGST Act, 2017.
However, ruling did not
Alcon Consul ng Engineers (I) consider or examine Schedule It was observed that the b) Situa on will remain same
Pvt. Ltd. [(2019) 110 III nor did examine the facts considera on paid to the as (a) above and will
taxmann.com 357 (AAR, that if such director was Director for the supply of a ract GST under reverse
Karnataka)] appointed as employee or services to the Company is charge mechanism.
otherwise and therefore. This specifically covered under
The applicant was in the cannot be universally applied No fica on No. 13 /2017- This ruling gives an impression
business of providing but would depend on specific Central Tax (Rate) dated that the directors are not
consultancy services, like facts. 28.06.2017 and GST payable employees without any
surface survey and map under reverse charge basis. reasoning and without
making, project management Clay Cra s India Pvt. Ltd., In re considering factual matrix in
consultancy services for [(2020) 116 taxmann.com 114 It was further observed that the case as to terms of
construc on projects, (AAR, Rajasthan)] considera on paid to the appointment of director, TDS
engineering advisory services Directors is against the supply and PF deduc on etc. and this
and technical tes ng analysis The applicant was a private of services provided by them advance ruling appears to be
services etc. to the general limited company consis ng of to the applicant company and based on a wrong foo ng and
public, State Government six directors and all of them are not covered under clause on the premise that directors
agencies, and Central working at different level of (1) of the Schedule III to the are not employees or directors
Government throughout the management and each one of CGST Act, 2017 as the Directors cannot be considered as
country. them was holding charge of are not the employee of the employees. This appears to be
procurement of raw material, Company. In the instant case, illogical.
It sought advance ruling in produc on, quality checks, Director was the supplier of
respect of the ques on as to dispatch, accoun ng etc. They services and the applicant Both the advance ruling has
whether the expenses were therefore, working company is the recipient of the erred and missed the basic
incurred by the Staff members directors. services. So it is very clear that essence that the employment
on behalf of the company the services rendered by the service is not subjected to GST
exceeding Rs. 5000 a day and Considera on in form of salary Director to the company for whether such employment is
then reimbursed periodically and commission paid to the which considera on is paid to that of a director or any other
are liable to tax. Whether Directors by the company was them in any head is liable to designa on.
Reverse Charge Mechanism against the services provided pay GST under Reverse Charge
(RCM) is applicable on by them to the company and Mechanism. Anil Kumar Agrawal, In re
remunera on paid to the the company is recipient of [(2020) 116 taxmann.com 428
Directors. such service and Directors are No fica on No. 13/2017- (AAR, Karnataka)]
the supplier. Further, the Central Tax (Rate) dated
Further, it was observed that applicant was already paying 28.06.2017 has given the The facts of the case is not a
the services provided by the GST by way of reverse charge dis nct iden ty to the services ques on as to whether
Directors to the company are mechanism on the provided by the Director and remunera on paid to full me
not covered under clause 1 of commission paid to the specifically included in the director by the Company is
the Schedule III to the Central Directors trea ng such category of service on which liable for GST under RCM or
Goods and Services Tax Act, amount as pertaining to the GST will be payable under not, as in the case of AAR,
2017 as the director is not the service provided by them in RCM. Rajasthan. In this case, the
employee of the company. The the capacity of a Director. applicant being an
considera on paid to the unregistered person seeking
14 F A D A Journal Feb-Jun 2020 | fada.in
Demystifying GST
Advance Ruling as to whether in such case, remunera on from Clay Cra ruling dated Epilogue
income received from various paid by the company to the 20.02.2020 provides a ray of
sources form part of the Director is liable for GST under hope as we now have two Going by the statutory
“Aggregate Turnover” for the Reverse Charge Mechanism in different interpreta ons, provision of the GST law on
purpose of obtaining terms of sec on 9(3) of CGST though on the basis of exclusion of employer –
registra on under sec on 25 Act read with No fica on misunderstood facts and short employee transac ons from
of CGST Act, 2017. No.13/2017-CT (Rate) dated sighted interpreta on in M/s levy of GST, reverse charge
28.06.2017. Clay Cra Case. mechanisms and the three
The applicant was in receipt of rulings on hand which are
incomes from various sources It was ruled that the Circular No 140/10/2020 – different facts, it appears that
such as partner’s salary as remunera on received by the GST dated 10.06.2020 the advance ruling in case of
partner from partnership firm, applicant as Execu ve Director Anil Kumar Agarwal is more
Salary as director from Private is not includable in the As expected, CBIC has come balanced, conveys the sense of
Limited company, Interest aggregate turnover, as it is the out with a clarificatory circular law and has also understood
income, Dividend on shares, value of the services supplied and has clarified that the part the query of the applicant in
Rent on Commercial Property, by the applicant being an of Director's remunera on right perspec ve. Read
rent on Residen al flat etc employee. Further if the which are declared as harmoniously along with CBIC
applicant receives the "Salaries‟ in the books of a clarifica on, it can be
While the Authority recorded remunera on as a Non- company and subjected to TDS interpreted that while
that income received, i.e. Execu ve Director, such under Sec on 192 of the directors’ salary is not taxable,
interest income received from remunera on is liable to tax Income Tax Act, 1964 are not director ’s remunera on is
various sources are includable under reverse charge subject to GST and shall not be taxable under RCM. Further ,
in aggregate turnover as the mechanism under sec on 9(3) treated as supply in terms of circular makes it clear now and
ac vi es amount to supply as of the CGST Act 2017, in the Schedule III of the CGST Act, the part of Director's
per sec on 7 of the CGST Act, hands of the company, under 2017. remunera on which is
2017. However, on salary entry no 6 of No fica on No. declared separately other than
received in the capacity of 13/2017-Central Tax (Rate) It has been further clarified "salaries" in the Company's
Director of a company, the AAR dated 28.06.2017. Thus, the that the part of Director's accounts and subjected to TDS
held that there could be two value of the said services of the remunera on which is under Sec on 194J of the
possibili es with regard to applicant being a Non- declared separately other than Income Tax Act, 1964 as Fees
salary as a Director. One is he Execu ve Director are "salaries" in the Company's for professional or Technical
may be an Execu ve Director includable in the aggregate accounts and subjected to TDS Services shall be treated as
and in this case, he becomes an turnover, as it is the value of under Sec on 194J of the taxable supply for GST.
employee of the company and the taxable services supplied Income Tax Act, 1964 as Fees
services provided by employee by the applicant, though the for professional or Technical It would be advisable for
to employer is neither supply tax is discharged by the private Services shall be treated as companies to document the
of goods nor supply of service limited company, under taxable supply for GST and transac on between directors
in terms of Schedule III of CGST reverse charge mechanism. company is liable to discharge as employee and director as
Act, 2017. the applicable GST on it on non-execu ve director
The Karnataka AAR ruling RCM basis. This se les the elaborately so that no dispute
Another possibility is that he pronounced on 04.05.2020 confusion resul ng from the arises and the tax payers are
may be a nominated director within a short span of me two divergent rulings. saved from harassment.
(Non- Execu ve Director) and
fada.in | Feb-Jun 2020 F A D A Journal 15
Govt Circulars
Clarification in respect of Levy of GST on Director’s Remuneration
Circular No: 140/10/2020 - GST
CBEC-20/10/05/2020 -GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
New Delhi, dated the 10th June, 2020
To,
The Principal Chief Commissioners / Chief Commissioners / Principal Commissioners / Commissioners of Central Tax (All)
The Principal Director Generals / Director Generals (All)
Madam/Sir,
Subject: Clarifica on in respect of levy of GST on Director’s remunera on - Reg.
Various references have been received from trade and industry seeking clarifica on whether the GST is leviable on
Director‟s remunera on paid by companies to their directors. Doubts have been raised as to whether the remunera on
paid by companies to their directors falls under the ambit of entry in Schedule III of the Central Goods and Services Tax Act,
2017 (hereina er referred to as the CGST Act) i.e. “services by an employee to the employer in the course of or in rela on
to his employment” or whether the same are liable to be taxed in terms of no fica on No. 13/2017 – Central Tax (Rate)
dated 28.06.2017 (entry no.6).
2. The issue of remunera on to directors has been examined under following two different categories:
(I) leviability of GST on remunera on paid by companies to the independent directors defined in terms of
sec on 149(6) of the Companies Act, 2013 or those directors who are not the employees of the said
company; and
(ii) leviability of GST on remunera on paid by companies to the whole- me directors including managing
director who are employees of the said company.
3. In order to ensure uniformity in the implementa on of the provisions of the law across the field forma ons, the
Board, in exercise of its powers conferred under sec on 168(1) of the CGST Act hereby clarifies the issue as below:
Leviability of GST on remunera on paid by companies to the independent directors or those directors who are
not the employee of the said company
4.1 The primary issue to be decided is whether or not a „Director‟ is an employee of the company. In this regard, from
the perusal of the relevant provisions of the Companies Act, 2013, it can be inferred that:
a. the defini on of a whole me-director under sec on 2(94) of the Companies Act, 2013 is an inclusive
defini on, and thus he may be a person who is not an employee of the company.
b. the defini on of „independent directors‟ under sec on 149(6) of the Companies Act, 2013, read with Rule 12
of Companies (Share Capital and Debentures) Rules, 2014 makes it amply clear that such director should not
have been an employee or proprietor or a partner of the said company, in any of the three financial years
immediately preceding the financial year in which he is proposed to be appointed in the said company.
16 F A D A Journal Feb-Jun 2020 | fada.in
Govt Circulars
4.2 Therefore, in respect of such directors who are not the employees of the said company, the services provided by
them to the Company, in lieu of remunera on as the considera on for the said services, are clearly outside the
scope of Schedule III of the CGST Act and are therefore taxable. In terms of entry at Sl. No. 6 of the Table annexed
to no fica on No. 13/2017 – Central Tax (Rate) dated 28.06.2017, the recipient of the said services i.e. the
Company, is liable to discharge the applicable GST on it on reverse charge basis.
4.3 Accordingly, it is hereby clarified that the remunera on paid to such independent directors, or those directors, by
whatever name called, who are not employees of the said company, is taxable in hands of the company, on reverse
charge basis.
Leviability of GST on remunera on paid by companies to the directors, who are also an employee of the said
company
5.1 Once, it has been ascertained whether a director, irrespec ve of name and designa on, is an employee, it would
be per nent to examine whether all the ac vi es performed by the director are in the course of employer-
employee rela on (i.e. a “contract of service”) or is there any element of “contract for service”. The issue has been
deliberated by various courts and it has been held that a director who has also taken an employment in the
company may be func oning in dual capaci es, namely, one as a director of the company and the other on the
basis of the contractual rela onship of master and servant with the company, i.e. under a contract of service
(employment) entered into with the company.
5.2 It is also per nent to note that similar iden fica on (to that in Para 5.1 above) and treatment of the Director‟s
remunera on is also present in the Income Tax Act, 1961 wherein the salaries paid to directors are subject to Tax
Deducted at Source ('TDS') under Sec on 192 of the Income Tax Act, 1961 ('IT Act'). However, in cases where the
remunera on is in the nature of professional fees and not salary, the same is liable for deduc on under Sec on
194J of the IT Act.
5.3. Accordingly, it is clarified that the part of Director‟s remunera on which are declared as ‘Salaries’ in the books of
a company and subjected to TDS under Sec on 192 of the IT Act, are not taxable being considera on for services
by an employee to the employer in the course of or in rela on to his employment in terms of Schedule III of the
CGST Act, 2017.
5.4 It is further clarified that the part of employee Director‟s remunera on which is declared separately other than
‘salaries’ in the Company’s accounts and subjected to TDS under Sec on 194J of the IT Act as Fees for professional
or Technical Services shall be treated as considera on for providing services which are outside the scope of
Schedule III of the CGST Act, and is therefore, taxable. Further, in terms of no fica on No. 13/2017 – Central Tax
(Rate) dated 28.06.2017, the recipient of the said services i.e. the Company, is liable to discharge the applicable
GST on it on reverse charge basis.
6. It is requested that suitable trade no ces may be issued to publicize the contents of this circular.
7. Difficulty, if any, in the implementa on of the above instruc ons may please be brought to the no ce of the
Board. Hindi version would follow.
(Yogendra Garg)
Principal Commissioner
[email protected]
fada.in | Feb-Jun 2020 F A D A Journal 17
Dealership Profitability
Customer Experience Trends to Watch Out:
A Wake Up Call for Car Dealerships - Ac vEngage
When you ask any savvy car ● 91% of unhappy confident steps towards your While the industry has made
dealer what their dealership’s customers who are non- final des na on: an elevated leaps and bounds towards
primary focus is in 2020, the complainers simply leave. customer experience. omnichannel marke ng, many
answer is usually the same: of these interac ons are siloed
improving the customer ● Only 1 out of 26 unhappy 1. OMNICHANNEL IS NOT AN and vary from channel to
experience. However, it’s one customers complain. The OPTION; IT’S A NECESSITY. channel. True omnichannel
thing to say CX is everything to rest churn. retail offers seamlessly
your dealership and quite Today’s car buyers have more connected touchpoints and
another to actually deliver. ● 67% of customers access to informa on than provides a cohesive customer
men on bad experiences ever, and that has completely experience.
Some sta s cs from about as a reason for leaving. transformed the way they
what your customers think: shop. From buying parts on Consistency across channels is
It’s undeniable; the consumer eBay to shopping for used cars key. The tone of voice,
● 61% said the car shopping landscape is shi ing. The good on Facebook Marketplace to a tudes of your team
experience did not news is that you can use the scheduling service on your members, and level of care &
improve from their customer experience trends in website, the customer journey a en on provided are all
previous me this eBook as a road map to is full of possibili es that span examples of things that need
help you navigate this rocky across mul ple channels. to remain consistent from
● Top 2 frustra ons = terrain. Read on and take more interac on to interac on.
paperwork and
nego a ons An omnichannel experience is
seamless. It means that no
● 47% of me at the ma er what channel
dealership is spent customers are using, they can
nego a ng and filling out move from step to step with as
paperwork li le fric on as possible.
Unfortunately, this experience
● 2h 52min average me
spent at the dealership
18 F A D A Journal Feb-Jun 2020 | fada.in
Dealership Profitability
is seriously lacking across The human experience results 3. CONSUMERS CONTINUE TO A. Transparency about the
industries. from businesses figh ng DEMAND DATA TRANSPARENCY. personal informa on
against the inevitable (please collected
Consumer expecta ons are refer Martec’s Law ). Because we’re living in an era
on the rise. of security breaches and B. Control over how that
Technology is changing faster growing distrust, brands now personal data is used
With consumer expecta ons than organiza ons. In this have to adhere to stricter data
expected to rise, your rigged race to keep up, privacy regula ons or pay the This trend shows no signs of
dealership needs to be present businesses have replaced price. From the California stopping. Much like what
when and where it ma ers humanity with efficiency. Consumer Privacy Act (CCPA) happened with GDPR, the
most to a clientele that’s 2020 is prime me for a to the General Data Protec on CCPA inspired other
diversifying and evolving (Gen reality check. Your customers Regula on (GDPR), it’s clear jurisdic ons (Hawaii,
Z is already buying cars). For don’t wake up as customers; that consumers are Pennsylvania, Washington,
that reason, in 2020, we will they wake up as...well, demanding more: Puerto Rico, etc.) to propose
see more dealership’s shi humans. And the human privacy bills. Proof that if you
towards omnichannel condi on is unchanging: we haven’t been preparing for a
experiences that span want to be seen, heard, and shi to a privacy-driven
throughout the en re understood. That’s why the opera ng model, now is the
customer journey — from right approach to customer
awareness to considera on to experience isn’t digi za on; me to start.
purchase and beyond. it’s humaniza on. Whether regula ons require
dealerships to achieve explicit
2. CONSUMERS DEMAND A Humanizing the customer consent or just to explain their
MORE HUMAN TOUCH. experience is a mind-set. data prac ces, dealerships
now have the opportunity to
Businesses have spent Reflect. When you review your
endless me and money processes and tools, ask demonstrate trustworthy data
inves ng in ways to become yourself what will enable a prac ces. Brands that build
customercentric in recent connec on with an individual privacy into their customer
years — inves ng in mobile, (customers, vendors, experience will gain more trust
data analy cs, and other employees, etc.). and be er access to data —
technology designed to and will ul mately be able to
help us create a be er Listen. Know when to be agile offer the personalized
customer experience. The and when to slow down and experiences consumers
problem is that, while build a connec on by listening expect.
technology may have to your customers’ unsaid Car buyers want personalized
bridged one gap, it has needs. experiences. There’s no
simultaneously created
another. Be authen c. A human
experience can’t be faked.
Allow customers to connect
with real people at the
dealership, and make sure
employees embrace the shi .
fada.in | Feb-Jun 2020 F A D A Journal 19
Dealership Profitability
deba ng it. In fact, 2/3 of impact the customer crea ng a company culture customer experience. If your
consumers are more likely to experience in 2020: that thrives. dealership is focusing on CX in
buy from a retailer that sends 2020, it needs to start within
relevant promo ons. And, 1. Customer Journey Focusing on employee the organiza on to affect true
they are willing to exchange Educa on experience directly results change.
personaldataforpersonaliza on. from pu ng a greater focus on
More companies are training CONCLUSION
Data Transparency Tips: employees across the en re
organiza on about their Retailers have a major
1. Be transparent about customer journey. This helps challenge ahead: sa sfying
how you use the data. reinforce the no on that today’s and tomorrow’s
70% of consumers are everyone - be it front or back- customers. Businesses who
generally comfortable of-house staff - impacts CX. innovate can transform the
with retailers collec ng customer experience and truly
personal data if the 2. Empowerment Manage- change the world.
retailer is transparent ment Training
about how they use it. In an era where consumers
In the era of the customer, so want a humanized
2. Give consumers control skills are becoming more and experience powered by
of their own data. 75% of more valuable in the technology, the automo ve
consumers are generally workplace. Businesses across industry is primed for
comfortable with retailers industries are training success. Because selling cars
collec ng personal data if managers to become is s ll very much a people
theycancontrolhowitisused. empowering leaders who give thing, and it will con nue to
employees the tools and be for the foreseeable future.
3. Use the data consumers mo va on to take ownership
give you to serve them of customer service.
be er. 68% of consumers
reported streaming services 3. Humanizing Employee
use their data because it Experience
helps them find more
products & videos they like. Businesses are no longer
thinking about employee
4. BUSINESSES FOCUS ON experience in terms of just
EMPLOYEE EXPERIENCE. incen ve programs and
benefits. They are focusing on
While in the past we’ve seen the day-to-day experiences in
companies across mul ple the workplace and inves ng in
industries turn to technology
in their quest to provide a
be er customer experience
(CX), humans are becoming
just as (if not more) important.
Businesses are inves ng in
their own people.
The link between employee
experience and CX has been
well-documented throughout
the years. When employees
feel engaged, valued, and
cared for, they go above and
beyond for the customers they
serve.
Here are just a few ways
businesses are focusing on
employee experience to
20 F A D A Journal Feb-Jun 2020 | fada.in
NADA Auto Show
Why Dealers Love Auto Shows?
The answer is simple: Auto shows sell cars.
When it comes to building Auto Show, now in its 29th as a manufacturer they may not have considered
brand awareness and year, is supported by more represen ng Roush before.”
excitement, driving consumer than 100 auto dealers from 11 Performance vehicles. “Seeing
traffic into dealerships and surrounding coun es. “For the the show from both THE AUTO SHOW BOUNCE
increasing vehicle sales, OEMs and dealers who ba le perspec ves, we highly
nothing beats an auto show, with the brand shi , auto support the show because we Whether auto show
say dealers across the country. shows are an outstanding have seen firsthand the a endance solidifies brand
opportunity to either con nue number of people that love to loyalty or creates new
Eight out of 10 dealers say their to lock them into your brand or shop, inquire, touch and feel excitement behind brands that
local auto show is important or catch their a en on and sway the vehicles without sales perhaps a consumer had not
driving customer traffic into them away.” pressure or obliga on,” says explored, local dealers will
their dealerships, according to owner and dealer principal experience what’s known as
NADA’s recent Dealer A tude Tindol Automo ve has Natalie Tindol. “It opens a the “auto show bounce” in the
Survey. “Auto shows sell cars. par cipated in the Charlo e window for the customer to days and months following an
They help sell product, and Auto Show as a Ford dealer for experience makes and models auto show. “For anywhere
that’s the value of auto over 25 year and more recently from 30 to 60 days, dealers will
shows,” says Richard A. Baker, have people coming in from
show manager of the Miami the show and shopping,” says
Interna onal Auto Show and Sco Lambert, president of the
incoming chairman of the Minnesota Automobile
Automo ve Trade Associa on Dealers Associa on (MADA),
Execu ves (ATAE). which represents 371
franchised new-car and -truck
And when auto show dealers. “Some mes they
a endees get to the dealership come right from the show to
showroom, the numbers the showroom. Half the people
indicate they’re more likely to who come to the show are
buy: 54% of buyers made a shoppers with an inten on to
purchase decision based on buy and are ac vely looking
what they saw at an auto show, and researching.”
and 18% bought a brand they
had not been considering To take advantage of that
before they saw it at the show, bounce, many local dealers,
says Foresight Research. including MADA members,
plan their major marke ng
DISCOVERING NEW BRANDS, push to coincide with the Twin
REDISCOVERING FAVOURITES Ci es Auto Show, held each
year at the Minneapolis
In Charlo e, N.C., the brand Conven on Center, Lambert
conversion numbers were says. “ There’s a lot of
even higher—a whopping 62% marke ng around the
of the Charlo e Auto Show show—groups and factories
a endees this year le will have special show
considering a brand they may promo ons that run before
not have considered before and a er. Our show is in early
a ending the show, says Jenn March, and we’re just coming
Jackson, execu ve director, out of winter, so it’s a chance
Greater Charlo e Auto Dealers for everyone to shake off the
Associa on. The Charlo e ice and get marke ng again.”
fada.in | Feb-Jun 2020 F A D A Journal 21
The biggest li is with NADA Auto Show
website visits and digital
inquiries, says Tindol, “which consumers as we possibly
are equivalent to walk-ins in can,” Derrick
our world. The li con nues
for months, and we con nue Hatami, execu ve vice
to hear, ‘When I saw that car president for sales and
at the auto show,’ when we marke ng with Volkswagen
ask where they heard about Group of America, told
us or got their interest in the journalists at the Chicago
par cular unit they are Auto Show in February. “For
looking at.” us, to be able to get access to
11 million people last year
MESSAGE TO OEMS: YOU with our products, and have
CAN’T AFFORD TO MISS OUT them sit in it, touch and feel,
and in some instances
But if a manufacturer actually drive them, it’s a
chooses not to par cipate in huge benefit for us. We
an auto show, local dealers always do well when people
are the ones who feel the actually drive the product.”
pain. Over 75% of dealers say
automaker absence has a Dealers and auto show
nega ve impact on organizers point out that the
customers’ brand awareness, expecta ons for auto shows
and over 66% report that it need to shi from the glitz
has a nega ve impact on and glam of the media
customer traffic and retail coverage to the nuts and
sales, according to the Dealer bolts of reaching consumers
A tude Survey. and selling cars. “For the EU
OEMs, auto shows are more
While some manufacturers, of a showcase for media, but
par cularly European OEMs, in the U.S., we sell cars
are reassessing their auto through shows,” says MADA’s
show par cipa on, Lambert. “The domes c
others—including Toyota, marke ng departments
Volkswagen and Honda—are understand: This is how
commi ng to what has people shop for cars. They
proven to be a worthwhile come in and kick the res.”
investment. “From a
consumer standpoint, auto “We all recognize consumer
shows are stable and growing shopping habits have
in importance,” Sage Marie, dras cally changed in the last
assistant vice president for decade. The automo ve
public rela ons at American business is no excep on,”
Honda, told Automo ve says Jackson. “One thing has
News. “From a media certainly not changed:
standpoint, the dynamic is Having a consumer actually
definitely changing. The way experience a vehicle is s ll
automakers leverage auto the No. 1 factor when it
shows to deploy news is comes down to persuasion
changing.” and choice. There is nothing
like feeling the seat, holding
“For us, it’s probably one of the steering wheel, checking
the most efficient ways to get out the technology, coun ng
in front of as many the cup holders, li ing the
hood … that new-car smell.”
fada.in | Feb-Jun 2020 F A D A Journal 23
Membership
WE WELCOME OUR NEW
MEMBERS
No. Dealer Principal Name Dealership Name City State Franchise
1 Mr Dange Suresh Pavan Motors Eluru Andhra Pradesh HMSI
Benelli
2 Mr Komal Deep Singamse y SS Infra Rajahmundry Andhra Pradesh HMSI
HMSI
3 Mr Ramesh Babu Malempa Pruthvi Motor Cycles Gudivada Andhra Pradesh HMSI
Hyundai
4 Mr Satyanarayana R Rajasagi Hamsa Motors Pvt Ltd Visakhapatnam Andhra Pradesh Hyundai
Royal Enfield
5 Mr Dadi Girish Kumar Dadi Motors Vizianagaram Andhra Pradesh Renault
M&M
6 Mr Manash Pro m Konwar Borah Agencies Pvt Ltd Tinsukia Assam Hyundai
India Yamaha
7 Mr Bhupen Borah Borah BBM Automobiles LLP Dibrugarh Assam Maru Suzuki
TVS Motors
8 Mr Chirag Gupta Chirag Enfield Guwaha Assam Force Motors
Ford Motor
9 Mr Aayush Choudhury Srimanta Sankardev Auto World P Ltd Nagaon Assam TVS Motor
Con nentalEngines
10 Ms Bhara Barahma Hatorki Motors Pvt Ltd Bongaigaon Assam Hero MotoCorp
Royal Enfield
11 Mr Diganta Baruah Baruah Automobiles Pvt Ltd Nagaon Assam Hero MotoCorp
TVS Motor
12 Mr Amit Agarwal Grand Yamaha Guwaha Assam Hyundai
HMSI
13 Mr Bhusan Kumar Reeshav Automobiles Pvt Ltd Patna Bihar Piaggio
Royal Enfield
14 Mr Pankaj Bansal Shri Ram Motors Ambikapur Chha sgarh Hero MotoCorp
15 Mr Jaideep Singh Khanuja MLC Automo ves Raipur Chha sgarh
16 Mr Digvijay Vaid Vardhman Wheels Pvt Ltd Kumhari Chha sgarh
17 Mr Sudeep Agrawal Agrawal Motors Baikunthpur Chha sgarh
18 Mr Inder Jaggi Siddhi Vinayak Baxy Motors Raipur Chha sgarh
19 Mr Rajnish Kumar Agarwal "Aditya Automobiles Raigarh Chha sgarh
20 Mr Manu Khanna United Automobiles New Delhi Delhi
21 Mr Anil Goel Himgiri Automobiles Pvt Ltd New Delhi Delhi
22 Mr Manish Agarwal S D Motors New Delhi Delhi
23 Mr Sandeep Kaushik "VS Motors Pvt Ltd New Delhi Delhi
24 Mr Ni n Anand Smooth Motors New Delhi Delhi
25 Mr Vivek Bengani Bhawani Realtech Pvt Ltd New Delhi Delhi
26 Mr Sa sh Kumar Garg ESS AAR Motors New Delhi Delhi
27 Mr Manmohan Singh Metro Motors New Delhi Delhi
24 F A D A Journal Feb-Jun 2020 | fada.in
Membership
No. Dealer Principal Name Dealership Name City State Franchise
28 Mr Nikhil Popli SNV Motors Pvt Ltd New Delhi Delhi HMSI
29 Mr Himanshu Gupta G L Sales Pvt Ltd New Delhi Delhi SuzukiMotorcycle
30 Mr Ajay Agarwal GO Auto Pvt Ltd New Delhi Delhi Tata Motors
31 Mr Raghuvinder M Chauhan Rajpoot Motors New Delhi Delhi TVS Motor
32 Mr Arjun Bajwa Bajwa Automobiles New Delhi Delhi TVS Motor
33 Mr Ankit Bansal RDB Automoitve Pvt Ltd New Delhi Delhi SuzukiMotorcycle
34 Mr Gaurav Bha a Celebrate Motors Pvt Ltd New Delhi Delhi HMSI
35 Mr Gurvansh Singh Chadha Extreme Automobiles LLP New Delhi Delhi India Kawasaki
36 Mr Tarun Mi al JMD Automo ves New Delhi Delhi Hero MotoCorp
37 Mr Raghav Seth Ambuj Automobile New Delhi Delhi India Yamaha
38 Mr Sandeep Kaushik Shri Sai Motors New Delhi Delhi HMSI
39 Mr Inderpreet Singh G K Motors Pvt Ltd New Delhi Delhi TVS Motor
40 Mr Mrunal H Gandhi Orange Automo ve Pvt Ltd Amreli Gujarat Bajaj 3W
41 Mr Ramanbhai M Prajapa Sakal Auto Himatnagar Gujarat Bajaj Auto
42 Ms Kalpana K Gupta Shiv Automobiles Palanpur Gujarat Hero MotoCorp
43 Mr Manoj Kumar L Sarda Shree Balaji Motors Surat Gujarat Hero MotoCorp
44 Mr Ankur Desai Horizon Motors NADIAD Gujarat Hero MotoCorp
45 Mr Sanjay Passi Pasco Automobiles Gurugram Haryana Maru Suzuki
46 Mr J P Singla J P Motors Solan Himachal Pradesh Tata Motors
47 Mr Janish Mi al Snowview Automobiles Pvt Ltd Shimla Himachal Pradesh M&M
48 Mr A V Suresh Babu Akshaya Auto Service Tumkur Karnataka KTM
49 Mr Samith A S Saketh Automobiles Tumkur Karnataka Maru Suzuki
50 Mr Manunath N Kalleshwara Motors Pvt Ltd Davangere Karnataka SuzukiMotorcycle
51 Mr Ravi M Reddy Android Motors Pvt Ltd Bengaluru Karnataka VECV
52 Mr Pavan Chand Nahar Aqustya Bengaluru Karnataka VECV
53 Mr A Ganesh Rao ARM Motors LLP Mangaluru Karnataka Kia Motors
54 Mr Jayaram Suvarna Jaydev Automobiles Udupi Karnataka Piaggio
55 Mr A K Karan Kumar Dev Motors Mysore Karnataka Piaggio
56 Mr Rakesh Malik CI Automotors Pvt Ltd Bhopal Madhya Pradesh M&M
57 Mr Prafulla Taralekar Taralekar Motors Pvt Ltd Miraj Maharashtra Maru Suzuki
58 Mr Shreyaunsh Mirje Mirje Associates Kolhapur Maharashtra HMSI
59 Mr Hemant Ramesh Chopda Chopda Autowheels Pvt Ltd Nashik Maharashtra HMSI
60 Mr Chetan H Daiya Vashi Automobiles Navi Mumbai Maharashtra Force Motors
61 Mr Siddharth S Khinvasara Siddharth Motors Pune Maharashtra Force Motors
62 Mr Indrajeet P Konduskar Rasika Motors Pvt Ltd Kolhapur Maharashtra Honda Cars
fada.in | Feb-Jun 2020 F A D A Journal 25
Membership
No. Dealer Principal Name Dealership Name City State Franchise
63 Mr Mahendra M Sachdeo Mangharam Agencies Karad Maharashtra TVS Motor
64 Mr Andy Mangsatabam Manipur Hyundai
65 Mr Prashant Goenka Punya Motors Pvt Ltd Imphal Meghalaya Bajaj 3W
66 Mr Debesh Prasad Nanda Odisha Skoda Auto
67 Mr Luv Goyal Goenka Enginnering Works Shillong Punjab MG Motor
68 Mr Ashok Kumar Punjab TVS Motor
69 Mr Amitabbh Jain Durgesh Motros Pvt Ltd Cu ack Rajasthan Bajaj Auto
70 Mr Kavi Sharma Rajasthan Hyundai
71 Mr Abhishek Kasliwal Gitansh Motors Pvt Ltd Ludhiana Rajasthan Bharat Benz
72 Mr Jagdeep Singh Gehlot Rajasthan M&M
73 Mr K Sundara Moorthi Laxmi Service Sta on Ludhiana Tamil Nadu HMSI
74 Mr AVT Mohan Tamil Nadu Bajaj Auto
75 Mr R Raja Nidhi Kamal Co Pvt Ltd Jaipur Tamil Nadu TVS Motor
76 Mr Arun Surendra Tamil Nadu Tata Motors
77 Mr Sree Venkata Teja K P L Motors Ltd Jaipur Tamil Nadu Jeep India
78 Mr C Senthilvel Tamil Nadu Hero MotoCorp
79 Mr S S Subbu Kamal Commercial Vehicles Pvt Ltd Jaipur Tamil Nadu Tata Motors
80 Mr Thangaraj Anand Tamil Nadu Hero MotoCorp
81 Mr S Sundaresan Gehlot Motors Pvt Ltd Sikar Tamil Nadu Hero MotoCorp
82 Mr Satheesh Kumar M J Tamil Nadu Royal Enfield
83 Mr Belman Abhishek Rao Mukesh Motor Sivakasi Telangana HMSI
84 Mr Arnav Arora U ar Pradesh Benelli
85 Mr Alpit Agarwal TKRA Motors Salem U ar Pradesh Tata Motors
86 Mr Shafiq Ahmad Khan U ar Pradesh Hero MotoCorp
87 Ms Saraswa Mishra Shriraj Agencies Tiruchirapalli U ar Pradesh Hero MotoCorp
88 Mr Shyam Dixit U ar Pradesh Hero MotoCorp
89 Mr Rajesh Pippal V S T Motors Ltd Chennai U ar Pradesh HMSI
90 Mr Amrendra Prakash Jain U ar Pradesh HMSI
91 Mr Amit Agrawal VTK Automobiles Pvt Ltd Chennai U ar Pradesh Tata Motors
92 Mr Neeraj Nanglia U arakhand Royal Enfield
93 Mr Brij Mohan Ajmani Majes c Motors Mayiladuthurai U arakhand Hyundai
94 Mr Mandeep Singh U arakhand Hero MotoCorp
95 Mr Sovon Du a LRN Motors Pvt Ltd Salem West Bengal India Yamaha
96 Mr Akhil Agrawal West Bengal Hyundai
97 Mr Manotosh Das MSK Motors Erode West Bengal HMSI
98 Mr Giriraj Daga West Bengal Force Motors
LRN Motors Salem
Sreehitha Auto Zone Pvt Ltd Chennai
ShreeDurgaParameshwariMotors Hyderabad
Felix Autowerks LLP Noida
AKC Motors Bareilly
Aman Automo ves Ghaziabad
Mishra Automobiles Etawah
Asha Motors Kannauj
Peoples Automobiles Agra
APJ Automobiles Pvt Ltd Agra
G P Motors Pvt Ltd Allahabad
Allied Auto Agencies Dehradun
B M Autosales Pvt Ltd Dehradun
Lahoria Traders Rudrapur
KD Automart Murshidabad
Fulcrum Agencies Pvt Ltd Kolkata
Mira Auto Centre Raiganj
Fortune Motors Kolkata
26 F A D A Journal Feb-Jun 2020 | fada.in
GreyOrange: The Rise of the Robots 2.0
As GreyOrange widens its reach, intensifies R&D and recruits talent from the world over,
its backers believe big things are in store for it.
From L to R: Samay Kohli, Group CEO and Co-Founder of GreyOrange and
Akash Gupta, the Co-founder and CTO of GreyOrange
Venture capital funding is LPs [limited partners] for of the ho est names on the courier-services companies
no proof of a startup’s addi onal capital to be able to global warehouse automa on DTDC and Dubai-based
success, but it is a pre y good con nue inves ng our pro-rata and robo cs circuit. Robots Aramex; Chilean home-
improvement retailer
g a u g e o f i t s p r o m i s e . share of the larger rounds,” built by the company, founded Sodimac; state-owned postal
company Pos Indonesia; Hong
A u t o m a o n s t a r t u p says Karthik Reddy, managing by BITS Pilani alumni Samay Kong-based Kerry Logis cs;
and Singapore-based logis cs
GreyOrange has raised funding partner at Blume Ventures. Kohli and Akash Gupta, are firm Ninja Van. The ar ficial
intelligence (AI)-enabled
four mes in its eight years of The Mumbai-based VC firm’s deployed in over 70 client sites robots are made in India,
China, and the U.S.
existence. The most recent t o t a l i n v e s t m e n t i n across India, Japan, Europe,
GreyOrange’s backers believe
was last September when it GreyOrange is $10 million. La n America, and the U.S., big things are in store for it.
Ajay Royan of Mithril Capital,
raised $140 million in Series C Now, there are two things of helping improve efficiency and which led the latest funding
funding at a reported valua on note here. One, the size of the save me. round, points out that the
of $400 million to $500 million. latest funding, which is four global logis cs and
GreyOrange’s clientele
Blume Ventures, an early-stage mes the total amount raised includes India’s largest e-
V C fi r m t h a t b a c k s t e c h in the preceding rounds. Two, commerce retailer Flipkart (co-
startups, has invested in all consistent backing from VC founder Binny Bansal is an
these rounds. “Even when the firms such as Blume Ventures. investor); fashion portal
original fund’s reserves were No surprise there though. Myntra; furniture retailer
exhausted, we requested our GreyOrange has become one Pepperfry; Mahindra Tractors;
fada.in | Feb-Jun 2020 F A D A Journal 27
Business Achievers
automa on market is Boston that would Boston. It is a well-planned to 600 people across offices in
expected to exceed $125 manufacture robots and move for a company that India, Japan, Singapore,
billion within the next seven warehouse automa on anchors its products on Germany and the U.S., and its
years. “And we see systems. Boston is home to top machine learning, AI, and data R&D centres in Gurugram and
GreyOrange uniquely edu - Na onal ins tutes that intelligence. About 50% of its Boston. Much of its
posi oned to capitalise on that focus on science and workforce is involved in R&D. prototyping happens in China’s
expansion,” says Royan, who technology such as the Even those involved in Shenzhen, the world’s go-to
founded Mithril Capital along Massachuse s Ins tute of opera ons, sales, and place for top-notch hardware.
with early Facebook investor Technology (MIT). marke ng have an engineering Gupta, 30, chief technology
Peter Thiel. “This is a game degree or some background in officer of GreyOrange, says it is
changer in an industry that has In the next 12 months, new tech. important to leverage talent
had very li le disrup on in the GreyOrange plans to hire 50 pools and ecosystems in
past decade.” engineers for its R&D centre in The company today has close different parts of the world to
meet market and customer
In an cipa on of the market expecta ons. “We took a
opportunity, GreyOrange has conscious decision that if we
been gearing up. A few years want to be a global company,
ago, it moved base to the workforce has to be global
Singapore from Gurugram. In as well,” he says.
the startup world, it is
common knowledge that Though GreyOrange’s
many Indian startups register approach to R&D is melding
in Singapore despite opera ng inputs of its teams across all
in India to avoid tax woes and units, it prefers opera ons
benefit from Singapore’s managed locally. “Our
business-friendly policies and products are driven through
other incen ves for foreign a global R&D team. But we
investors. Kohli, the 33-year- wanted our opera ons to be
old CEO of GreyOrange, says in local,” explains Kohli. Last
its case it has more to do with year, the company appointed
opera onal flexibility: Chris Barber as regional CEO,
Singapore gives it be er access North America. Barber was
to the Asia-Pacific region. “In previously vice president of
the last five years, we were southern opera ons at
focussing on how to tap into Honeywell Intelligrated. “We
global markets and establish operate in a regional profit
our base outside India. Every and loss (P&L) model. Hiring
quarter, we were adding a new a regional CEO for the North
city globally,” says Kohli. Today, American market was
only 10% of the company’s cri cal,” says Kohli. This
revenue comes from India August, GreyOrange
while the rest comes from reiterated its global scaling
Japan, the U.S., and Western plans by hiring Jeff Cashman
Europe. as global COO and senior vice
president. Cashman, who
Last year, GreyOrange set up was CEO of e-commerce
its U.S. head - quarters in service provider Ally
Atlanta, Georgia, to serve its Commerce, packs 30 years of
key market be er. The reason: experience in supply chain
Atlanta is one of the key technology and has had
transporta on hubs with a s nts with Accenture’s
large base of leading supply supply chain strategy
chain and logis cs providers. It prac ce. He will be
has also set up an R&D unit in
28 F A D A Journal Feb-Jun 2020 | fada.in
Business Achievers
responsible for shaping says Kohli. The duo began by used in manufacturing courier services today
strategies for widening making products for other facili es and large retail usually face challenges such
customer base, market companies. Then they felt warehouses. It can ferry loads as spurts in volumes or the
penetra on, revenue they needed to narrow down up to 1,600 kg. The AI-backed pressure of same- or next-
growth, marke ng, solu on on an industry for which they robot is equipped to make day delivery. The Flexo can
delivery, and customer would design solu ons. This decisions by accessing data sort over 10,000 post and
success. was the me when e- using machine learning courier items in an hour,
commerce was gathering applica ons and adapt to reducing the cost per
Folks who know their startup pace in India. Kohli and Gupta scenarios such as seasonal shipment and dependency
history would know big ideas observed that online peaks or a surge in demand. on addi onal labour during
that took off in India trace marketplaces, flush with The Butler’s services are used peak hours. Scaling of tech,
their origins to the West. For funds, needed robots and by U.S.-based XPO Logis cs revenue, and reach is key to
instance, Flipkart (Amazon), automated systems to ensure (ranked 180 on the Fortune GreyOrange if it is to hold its
or Ola (Uber). Raju Reddy, a 500 list), a $17-billion own against compe on.
U.S.-based angel investor, mely customer fulfilment. transporta on and logis cs There are Chinese startups
says the story is a bit different Karthik Reddy of Blume service provider; Japan-based such as Quicktron, which
with GreyOrange. “It is rare Ventures says more than furniture retailer Nitori; and counts ecommerce giant
for an Indian-origin hardware anything else, it is Kohli and fishing tackle maker Daiwa. Alibaba as its customer, and
startup to build high-tech Gupta’s vision of using this Geek+, whose client roster
products which require not opportunity that has kept the Besides robo c products includes smartphone maker
just so ware exper se but VC firm invested in such as the Butler, Xiaomi, and Japanese startup
hardware, electrical and GreyOrange. “There was an automated picking system Mujin. Then there are
mechanical engineering for a incredible sense of passion in PickPal and the Sorter, a established global players
global market. This business both founders to build an IPO- conveyor belt-based system such as Germany’s SSI
is not imita ng some able company from India, that segregates packages Schaefer, Swisslog, Siemens,
Western idea. It shows applying their knowledge of according to zip codes, and Mitsubishi.
significant competence,” robo cs to complex problems weight, and volume,
says Raju Reddy. He was of warehouses and the GreyOrange also has a The investor, however, is
among those who invested logis cs supply chain,” says so ware pla orm, confident of the startup’s
$500,000 in GreyOrange’s Karthik Reddy. “Their dream is GreyMa er. It integrates future. “Clients from Chile to
first round of funding in not simply some valua on mul ple automa on Japan, the U.S. to Germany,
December 2012, a year a er and a fundraise; they want a systems backed by AI and have evaluated GreyOrange-
it launched in 2011. Blume company that lasts longer machine learning to perform deployed smaller paid pilots
Ventures and BITS Spark (an than any fund life. That kind of large and complex and rapidly graduated to $10
angel network of BITS, Pilani clarity is why we have backed opera ons in real- me for million-$20 million single
alumni) were the other them through every round to industries such as retail, warehouse deployment
investors. date.” manufacturing, and e- contracts. It is proof that tech
commerce. “In the last two- and revenue can scale
In the following years, Kohli The company’s flagship three years, we have been massively,” says Karthik
and Gupta became known product, the Butler, a box- focussing heavily on Reddy, adding that the
figures in robo cs and began shaped robot, owes its design building capabili es within autonomous warehouse era is
ge ng invita ons to teach to the learnings its creators the warehouse to build key at the beginning of the
and share ideas at workshops. obtained by observing the drill technology pla orms that adop on cycle. He, however,
In February 2011, they started in warehouses. It can move would enable mul ple cau ons that GreyOrange
GreyOrange as a robo cs- shelf units stacked with items products,” says Gupta. must keep pace with tech
educa on company with `5 weighing up to 500 kg to a advances.
lakh from savings from their human assistant, who then Earlier this year, GreyOrange
internship days in the U.S. By picks up the products and launched its latest AI- This is not news for Kohli and
the end of that year, they scans their barcodes. The enabled modular sorta on Gupta. “In robo cs, if you
shi ed tack. “We decided that robot then moves the selected system, the Flexo, targeted at wait too long to do
we will bank on our product items to the shipping bay distribu on and logis cs something, you’ve waited ll
exper se and build a business where they are sealed for centres of retail and courier it’s too late to do anything,”
model on that knowledge,” delivery. A stronger variant of companies. Postal and says Gupta.
the Butler launched last year is
fada.in | Feb-Jun 2020 F A D A Journal 29
Automotive & Mobility
How E-Scooters Can Win
a Place in Urban Transport
- Boston Consul ng Group
One of the fastest-growing unit economics have improved what are the prospects for the THE ECONOMICS ARE
worldwide consumer significantly, and companies e-scooter–sharing industry at LOOKING MUCH BRIGHTER
phenomena in memory, e- are innova ng aggressively to this cri cal juncture?
scooters are also one of the overcome opera onal E-scooters started out at a
most controversial. And while constraints. Companies are What does the industry’s long- disadvantage. First-genera on
some ci es are pu ng the also engaging with regulators term economic picture look e-scooters, which debuted in
brakes on their prolifera on, far more pro-ac vely than in like? Where are operators ci es in the fall of 2017, were
industry leaders are the past. It is clearer than ever most likely to succeed in retail models and had a
maintaining valua ons in the that micro-mobility solu ons gaining trac on? How will the lifespan for fleet use of only
billions, so the funding are not a fad; in an increasingly market unfold—and what two to three months, which
con nues to flow unabated. congested and polluted urban must operators do to survive made achieving profitability a
landscape, ci es urgently need and thrive? Most important, challenge if not an
E-scooter sharing is big, hot, them, as their presence in how can e-scooter companies impossibility. As fleet
and (with apologies to some 350 ci es worldwide and city leaders con nue to operators and venture
Winston Churchill) a paradox a ests. (See Exhibit 1.) Further work together to make e- capitalists hoped, however,
wrapped in a conundrum. expansion will follow. scooters a viable micro- second-genera on
Some observers dismiss it as mobility solu on? The current scooters—jointly designed
yet another overhyped It’s hard to unravel the experience in the US and with manufacturers to boost
industry rife with funding and, dynamics of this fast-paced, Europe, the two most sturdiness and lifespan—are
sooner or later, big losses. But s ll-developing market. It has developed regions, sheds light far more durable, las ng 12 to
the reality is that e-scooters’ now grown past its infancy, but on these ques ons. 24 months in fleet use. In
addi on to being more rugged,
the new scooters are more
powerful and have a greater
array of smart elements, such
as sensors. Swappable
ba eries are gaining ground,
too, especially in Europe;
Berlin-based Tier Mobility, for
instance, plans to replace its
en re fleet with swappable-
ba ery-powered scooters by
mid-2020. As a result, a
handful of industry leaders
have managed to achieve
posi ve variable margins at
both city and regional levels of
opera on. More—and more
substan al - improvements
32 F A D A Journal Feb-Jun 2020 | fada.in
Automotive & Mobility
are in the works, including a companies can train their own providers now charge the Popula on Density. Day me
self-parking capability and employees and retain full equivalent of €0.15 to €0.25 popula on density offers a
autonomous reloca on (the control over opera ons. Third- (represen ng a slight increase good benchmark for
la er obviates the need for party contractors are less since service began). understanding poten al local
workers to move scooters expensive but less stable; and Companies almost always demand for micro-mobility
around town in vans). These gig workers, although a charge these per-minute rates modes such as e-scooters.
improvements also go a long cheaper op on, give on top of an unlock fee of $1 or Cars are more expensive and
way toward fulfilling the e- companies less control and are the equivalent. For core target inconvenient to drive and
scooter ’s promise of the least reliable at ensuring users—a young and affluent park, public transporta on is
environmental sustainability. the comple on of all necessary group—cost increases o en overloaded &
tasks. Business models don’t amoun ng to cents per minute uncomfortable, and heavy
Hardware improvements are drive the choice en rely, are inconsequen al and repre- vehicular traffic makes
not the only factor in e- however. In ci es such as Paris, sent far less of an issue than alterna ves such as taxis and
scooters’ brighter economics. bidders seeking permits must availability. That’s a good thing ride sharing less appealing
Providers have also been meet certain social standards for providers, since regulatory and less reliable. High-
tackling opera onal obstacles, as well as environmental goals. fees (permits and ridership density areas are more
zeroing in on the key France encourages fees), fines, and other costs are condensed, so trips are
opera onal cost drivers in employment with benefits and exer ng pressure on unit shorter, which bodes well for
individual markets. Because frowns on gig work. For this economics. scooters and micro-mobility
they eliminate the need to reason, some operators are vehicles in general.
retrieve, charge, and redeploy abandoning the gig model Together, a more durable
each scooter, swappable altogether in certain ci es. product, improvements in Bicycle Friendliness. An
ba eries are proving to be a opera onal efficiency, and infrastructure that supports
game changer, reducing labour With a high volume of product higher prices have made e- bicycling (with special traffic
and logis cs costs, down me, in the field, it’s not surprising scooter opera ons more lanes and accommoda ons for
and the scooter ’s that data (along with the economical, at least for the top parking, for example) serves as
environmental footprint. The analy cs and science around echelon of leaders in the more an important proxy for e-
next level of innova on with it) is crucial for informing mature markets and in some scooter poten al.
regard to swappable ba eries decisions related to boos ng individual ci es. But to reach
will be decentralized charging fleet u liza on. Tracking sustainable profits and jus fy Weather. E-scooters are not
sta ons, where users can swap up me (the propor on of live their current valua ons, well suited to inclement
ba eries in return for ride and available scooters in the companies need a model that weather, so even ci es that are
credit, similar to what is fleet) and op mizing supply- reflects a broader pool of ci es otherwise hospitable to
already being done with and-demand matching enable and micro-mobility modes. scooters are not prime
refueling in car sharing. operators to increase the They need to operate on a markets if they have extreme
u liza on of ac ve machines scale big enough to amor ze levels or extended periods of
Perhaps the biggest factor in circula on. For example, their corporate overhead precipita on or cold
underlying the improvement iden fying the loca ons where costs. temperatures.
in opera onal unit economics consumer demand is highest
is the professionaliza on and enables operators to pick more USING CITY ARCHETYPES TO A Large Popula on of Young
op miza on of providers’ strategic drop-off loca ons EXTRAPOLATE FUTURE People. Because young people
opera ons. Scale effects, along and to relocate stock to high- GROWTH are the largest user group for
with early lessons learned, demand areas. e-scooters, we looked at
have enabled providers to How bright are the industry’s metropolitan areas in which
lower the costs per ride Finally, price increases have prospects for growth? students cons tute a rela vely
significantly. Labour pped the economics in a Certainly, varia ons in large percentage of the
costs—which depend on one disposable income, even popula on.
of three basic models for more favourable direc on. In across Europe, make some
managing logis cs, charging, 2019, Bird and other providers ci es be er candidates than We used these dimensions to
and repair—are driven by the raised their per-minute prices others for scooter growth. To iden fy seven micro-mobility
provider’s business model and in most US ci es from 15 cents arrive at a sound es mate, we archetypes derived from vari-
by the specific opera ng per minute to as much as 39 first categorized ci es on the e es of US and European
region. In-house labour is cents per minute (in Los basis of four key dimensions, ci es. (See Exhibit 2.) The
more expensive, but Angeles, for instance). In using decision-tree analysis: archetypes are as follows:
Europe, depending on the city,
fada.in | Feb-Jun 2020 F A D A Journal 33
Automotive & Mobility
Megacity. A major global city Scooter Paradise. A midsize, market size, however, we also ADVANCING TOWARD LONG-
with a metropolitan-wide non-car-centric city—such as need to es mate the number TERM GROWTH
popula on of at least 3.5 Aus n, Lisbon, Nice, or San of scooters per market.
million—such as Paris, Madrid, Diego—with mild weather. Given how quickly the e-
or Chicago—that is dense From exis ng data on scooter scooter marke ng is evolving,
enough to be bicycle friendly. College Town. A small prevalence and use in ci es we also looked at how e-
city—such as Charlo esville, within our archetypes, we scooter penetra on
Car-Centric Giant. A major US Virginia; Ann Arbor, Michigan; developed an es mate of throughout the US and Europe
city—such as Los Angeles, or Münster, Germany—that scooter penetra on—the would progress over me,
Dallas, or Atlanta—whose owes much of its popula on to number of people per scooter focusing on three phases, or
layout is more horizontal than the college or university in a given area. For example, horizons. (See Exhibit 3.) The
ver cal and whose located there. there are about 16,000 e- three horizons are as follows:
predominant mode of scooters in Aus n, Texas,
transporta on is the car. Scooter-Friendly Small Town. which has a popula on of 1 Horizon 1—the immediate
A smaller municipality that million within its city limits, so future, marked by con nued
Car-Centric Middleweight. A holds poten al for e-scooter we used this ra o (62.5 people expansion in exis ng core
midsize US city—such as San growth. to 1 scooter) to represent the urban areas (in both the US
Antonio, Indianapolis, or satura on point for Scooter and Europe) and an emerging
Nashville—where cars Approximately 750 ci es could Paradise ci es. We then e-scooter market in new ci es.
predominate. support widespread micro- applied that ra o to similar Widespread regulatory restric-
mobility in the US and Europe. ci es to calculate the total
Weather-Challenged This figure is more than double number of scooters that each ons will cap the allowable
Middleweight. A midsize the number of ac ve markets market could bear at its number of e-scooters. We
city—such as Brussels, Denver, or today, sugges ng huge growth current popula on. expect that, by the end of
Portland, Oregon—that has long poten al. To be er Horizon 1, the US- and
wintersorinclementweather. understand the long-term European-based fleet of e-
scooters will amount to
roughly 1 million machines and
will generate $3 billion to $4
billion in total revenue.
Horizon 2—the phase when e-
scooters have become
endemic to city street life but
for the most part remain
located in downtown areas.
During this period, the market
will mature and economics will
stabilize to create market equi-
libriums. Con nued
improvement in opera ons
and ongoing growth in scooter
use will help address city
concerns, resul ng in caps
being li ed or adjusted to
match market demand. By the
end of Horizon 2, we expect,
the total US- and European-
based fleet will number
roughly 2 million to 3 million
scooters and will yield $7
billion to $8 billion in total
revenue.
Horizon 3—the longer term,
with a mature e-scooter
34 F A D A Journal Feb-Jun 2020 | fada.in
Automotive & Mobility
market and more broadly from cars and toward more circumstances—and can use happen as early as 2020.
reorganized and integrated varied, lower-impact forms of that informa on to tailor the Becoming the dominant player
mobility systems. We es mate transit, not just scooters. customer experience and in a region demands a market-
that 15 Megaci es will European and US market op mize opera ons by-market or even city-by-city
generate more than one-third revenue will likely reach $25 accordingly. Finally, regulatory approach. Without a he y
of overall industry revenue. In billion to $30 billion. limits on deployment are an investment, late entrants will
this phase, scooters will extend impediment to small entrants, not be able to capture a
their range beyond core urban WHAT THE NUMBERS MEAN but larger players that already leading posi on.
areas and into the less dense FOR COMPETITION have a market foothold can
outlying areas and suburbs of meet the costs of compliance. The winners will most likely
Megaci es, Weather- In the short me since e- Over me, these barriers to consist of a mix of global and
Challenged Middleweights, scooter sharing debuted, the entry will con nue to grow. local providers. Global
and Scooter Paradises. E- barriers to entry have risen champions will compete on
scooters will have reached considerably. Scale is a major The underlying unit the basis of cost and ubiquity,
most smaller towns with driver of this development: economics, the barriers to while local champions will
semiurban cores in Europe and despite improvements in entry, and the fact that few capitalize on their inside
elsewhere. hardware, opera ons remain mobility modes today have knowledge and local
labour intensive and more than a handful of players rela onships to offer a more
At Horizon 3, when suburbs expensive. As fleets have will likely result in three to four customized user experience.
and small towns have fully grown from hundreds to significant players compe ng Naturally, this evolu on will be
adopted e-scooters, we thousands of scooters per in any given market. Our dynamic; leading in 2020 does
envision a fleet of some 4 market, leading en es have projec on of the future not mean that you are
million to 5 million scooters, secured the advantage of economics suggests that des ned to win in 2025. The
genera ng revenues of economies of scale, allowing companies with less than 25% introduc on of new product
between $12 billion and $15 them to reinvest and further market share will struggle to forms or major regulatory
billion in the US and Europe improve their opera ons do be er than break even on a changes could easily reshuffle
alone; of the two, Europe will capabili es on a global scale. fully loaded basis. This would the winners’ roster and
have the larger market. Data is another major mark a significant departure introduce cracks for disruptors
advantage: companies that from today’s landscape, in to exploit.
The long-term scenario will see deploy tens of thousands of e- which up to ten players
con nued integra on of scooters across different par cipate in some markets. BEYOND THE HORIZON
micro-mobility in urban market archetypes can learn a
planning in order to achieve great deal about rider Consolida on is inevitable; we Reaching a global market in the
ci es’ goals of shi ing away behaviour under different expect the first wave to double-digit billions of dollars
(or euros) will take more than
just me. E-scooter providers
must cooperate closely with
ci es while con nuing to
refine and innovate their core
business models. As fleet
operators and city leaders gain
a clearer understanding of the
op mal balance of supply and
demand, they will be be er
equipped to compromise on
opera onal and regulatory
guardrails addressing rules of
the road, public safety, parking
and no-scooter zones, and
other concerns. With their
longstanding bicycle culture
and infrastructure, many
European ci es, such as
Copenhagen and Berlin, are
fada.in | Feb-Jun 2020 F A D A Journal 35
Automotive & Mobility
naturally conducive to e- MAKING SCOOTERS WORK IN Obviously, the price elas city first step.
scooter growth. Further URBAN MOBILITY of demand will vary from one
scooter penetra on will m a r ket to a n o t h e r. The Challenges for Ci es and
depend on advances in urban Clearly, e-scooters will Frequency of use among Policymakers. For their part,
planning, as ci es increasingly con nue to be part of the riders is another important ci es need to regulate
turn their a en on from the public debate on urban considera on: occasional though ully, drawing on the
automobile and toward other mobility for years to come. users and tourists tend to be lessons of peer ci es and their
public transit and micro- While providers focus on rather indifferent to price. To own pilot programs, as well as
mobility solu ons. Fleet growth and consolida on, city achieve cri cal mass as a on data and analy cs that
operators could pursue new leaders must find ways to bona fide transporta on operators have gathered. A
business models, such as integrate scooters and other alterna ve, e-scooters need good place to start is with per-
partnering with public transit micro-mobility modes into to be more a rac ve as an mits and data requirements.
agencies to serve as a more their urban mobility strategy. everyday choice for Ci es and policymakers also
a rac ve first- and last-mile commuters, rather than as an need to define rules of the
op on, par cularly beyond E-scooter operators must occasional choice. road, public safety
urban centres. achieve sustainable profits if Commuters arguably requirements, parking and no-
they are to remain viable represent the most scooter zones, and liability
Safety improvements would businesses. And their viability important segment for considera ons. Well-planned
encourage greater uptake, as is important if ci es are to future growth, and providers investment in infrastructure,
well. At present, more than realize their goal of crea ng should consider addressing including two-wheelers lanes
80% of fatal accidents environmentally sensi ve the needs of this segment and designated parking, will
involving bicycles or e- micro-mobility solu ons that with special package rates advance safety and encourage
scooters are instances in serve growing urban designed to boost the overall greater and more responsible
which cars or trucks strike popula ons. The two sides number of rides. Offering e-scooter use.
riders. The rise in specially have work to do, both such discounts to a high-
designated lanes bodes well separately and together. volume segment also creates Above all, providers and city
for e-scooter riders as well as a desirable lock-in effect, leaders need to work closely
for bicyclists, by providing a The Challenges for Operators. albeit at the cost of eroding together to successfully
safer travel zone. Realloca ng Operators must con nue to the gains in per-ride unit integrate e-scooters into the
parking spaces that are now improve their economics, economics. mobility mix of the future.
dedicated to automobiles especially as the market Their coopera on should
would be another way to consolidates. Design and The industry as a whole needs encompass not only
encourage greater use of engineering improvements to pay special a en on to transporta on strategies, but
micro-mobility modes and can have an enormous impact issues of environmental also broader efforts to
reduce clu er on sidewalks. In on profitability, considering sustainability. Beyond not promote solu ons that serve
the short term, such a move the high cost of maintaining a genera ng emissions during the public good, such as
by ci es might encounter large e-scooter fleet. opera on, e-scooters must programs for lower-income
opposi on; but as conges on Increasing vehicle longevity achieve a light end-to-end users. E-scooters are here to
grows, concerns about through product innova on environmental footprint - from stay, and the progress made
emissions increase, and car and maintenance, along with manufacturing and shipping to thus far is a good indica on
ownership con nues to further op mizing opera ons, charging and disposal. The that they (and micro-mobility
decline worldwide, the will improve economics. So will improvements in hardware forms in general) will be an
longer-term odds favour pursuing various measures to durability and ba ery important staple of urban
modest realloca ons. boost e-scooter use, such as capability are an important mobility in the future.
package offers and new pricing
strategies.
36 F A D A Journal Feb-Jun 2020 | fada.in
Consumer Case Studies
In the Supreme Court of India
Civil Appellate Jurisdiction
JUSTICE NAVIN SINHA IMPORTANT POINT: An insurance company cannot deny claim to the owner of a vehicle
& involved in a road accident if his driver had falsely claimed to be holding a valid driving licence
JUSTICE KRISHNA by producing a fake document.
MURARI
Krishna Murari, Jus ce - repudia on le er that the order of the District Forum,
Nirmala Kothari - Leave granted. driver Dharmendra Singh the Respondent/ Insurance
Appellant(s) Chauhan did not have a proper Company challenged the same
2. T h e A p p e l l a n t / driving licence at the me of by way of appeal before the
Versus Complainant, Nirmala the accident. The licence State Commission, but the
Kothari’s husband, Vinod produced by him, alleged to said appeal having been
M/s United India Signature Not Verified GEETA have been procured from the dismissed vide impugned
Insurance Company AHUJA Ray Kothari was office of the licencing order dated 18.09.2015, the
Limited – Respondent(s) owner of a Hyundai Elantra authority, Sheikh Sarai, Delhi Respondent/ Insurance
vehicle, registra on no. could not be verified, as the Company came before
Civil Appeal No. 1999-2000 Digitally signed by Date: concerned officer of the Na onal Commission by way
of 2020 2020.03.04 15:39:02 IST transport department of the Revision Pe on No.
Reason: returned their le er with the 2835/2015.
Decided on 04/03/2020 endorsement that the record
RJ36CA 0111, which was pertaining to the said licence 4. T h e c o m p l a i n t n o .
Arising out of Special Leave insured with the Insurance was not available. Alleging 227/2012 had been filed by
Petition (C) Nos. 14739- Company for a sum of deficiency on the part of the the same complainant
14740 of 2018) Rs.5,00,000/- . Respondent/ Insurance Nirmala Kothari, against the
Company, the complainant Respondent/ Insurance
3. The said vehicle met filed a consumer complaint, Company, reques ng for
with an accident with a seeking direc ons to the compensa on of Rs.
tractor bearing no. HR38K Respondent/Insurance 2,00,000/- as accident claim
3216, on 06.06.2010 as a Company to pay the Insured with interest @ 9% per
result of which the declared value (IDV) i.e. a sum annum and compensa on of
Appellant’s husband, Vinod of Rs. 5,00,000/- alongwith Rs. 20,000/- for mental
Ray Kothari, who was the interest @ 9% per annum from agony and Rs. 11,000/- for
owner of the car, and his the date of filing the complaint cost of li ga on. The
daughter died and the Respondent/ Insurance
vehicle was damaged. The ll payment and also to pay a Company repudiated the
driver of the vehicle, sum of Rs. 50,000/- as said claim also vide their
Dharmendra Singh Chauhan compensa on for mental le er dated 14.02.2012 on the
got an FIR registered with agony and Rs. 11,000/- as same ground that
the police. The Respondent/ li ga on cost. The District Dharmendra Singh Chauhan,
Insurance Company, on Forum vide their order dated the driver of the vehicle did
in ma on having been given 30.05.2012, allowed the said not possess a valid and
to them, appointed a spot consumer complaint and effec ve driving licence at the
surveyor, and also a regular directed payment of an
surveyor to carry out survey in amount of Rs. 3,57,500/- to me of the accident in
the ma er, but the claim was the complainant, as assessed ques on.
rejected by them vide their by the surveyor alongwith
le er dated 28.03.2011. The interest @ 9% p.a. and cost of 5. T h e c o n s u m e r
Respondent/ Insurance li ga on of Rs. 2,500/-. Being complaint no. 227/2012 was
Company stated in the aggrieved against the said also allowed by the District
Forum, vide order dated
fada.in | Feb-Jun 2020 F A D A Journal 37
Consumer Case Studies
28.02.2013 and the genuineness of the same. established. if the a en on of the owner of
Respondent/ Insurance the vehicle is otherwise invited
Company was directed to pay 7. Breach of condi ons The law with this respect has to the allega on that the
an amount of Rs. 2,00,000/- under Sec on 149(2)(a) of been discussed in detail in licence issued to the driver
for personal accident claim the Motor Vehicles Act, 1988 the case of Pepsu RTC vs. employed by him is a fake one
along with interest @ 9% per absolves the insurer of its Na onal Insurance Co. 2 We and yet the owner does not
annum from the date of filing liability to the insured. may extract the relevant take appropriate ac on for
the complaint and the cost of Sec on 149(2)(a)(ii) deals paragraph from the verifica on of the ma er
li ga on of Rs. 2,500/-. Being with the condi ons regarding Judgment: (Pepsu case, SCC regarding the genuineness of
aggrieved against the said driving licence. In case the pp. 223-24, para10) 1 (2003) the licence from the licensing
order of the District Forum, vehicle at the me of 3 SCC 338 : 2003 SCC (Cri) 641 authority. That is what is
the Respondent/ Insurance accident is driven by a person 2 (2013) 10 SCC 217 “In a explained in Swaran Singh’s
Company challenged the same who is not duly licenced or by claim for compensa on, it is case (supra). If despite such
by way of appeal no. 366/2013 a person who has been certainly open to the insurer informa on with the owner
before the State Commission. disqualified from holding or under Sec on 149(2)(a)(ii) to that the licence possessed by
The said appeal having been obtaining a driving licence take a defence that the driver his driver is fake, no ac on is
dismissed vide impugned during the period of of the vehicle involved in the taken by the insured for
order dated 01.08.2016, the disqualifica on, the insurer is accident was not duly licensed. appropriate verifica on, then
Respondent/ Insurance not liable for compensa on. In Once such a defence is taken, the insured will be at fault and,
Company came before the the instant case it is a ma er of the onus is on the insurer. But in such circumstances, the
Na onal Commission by way fact that no record of the even a er it is proved that the insurance company is not
of the Revision Pe on No. licence bearing no. licence possessed by the driver liable for the compensa on.”
3053/2016. The Na onal P03041288753070 was found was a fake one, whether there
Commission absolved the with the licensing authority. is liability on the insurer is the 9. While the insurer can
Respondent/ Insurance moot ques on. As far as the certainly take the defence
Comapany of its liability since 8. Having set forth the owner of the vehicle is that the licence of the driver
no record of the licence of the facts of the present case, the concerned, when he hires a of the car at the me of
Driver was found with the ques on of law that arises driver, he has to check whether accident was invalid/fake
licencing authority. Thus, for considera on is what is the driver has a valid driving however the onus of proving
aggrieved the Appellant/ the extent of care/diligence licence. Therea er he has to that the insured did not take
Complainant has come up in expected of the sa sfy himself as to the adequate care and cau on to
appeal. employer/insured while competence of the driver. If verify the genuineness of the
employing a driver? To sa sfied in that regard also, it licence or was guilty of willful
6. It is the case of the answer this ques on, we can be said that the owner had breach of the condi ons of
Respondent/ Insurance shall advert to the legal taken reasonable care in the insurance policy or the
Company that in the absence posi on regarding the employing a person who is contract of insurance lies on
of a valid and effec ve liability of the Insurance qualified and competent to the insurer.
driving licence with the Company when the driver of drive the vehicle. The owner
driver, there was the offending vehicle cannot be expected to go 10. The view taken by the
fundamental breach of the possessed an invalid/fake beyond that, to the extent of Na onal Commission that
terms and condi ons of the driving licence. In the case of verifying the genuineness of the law as se led in the
insurance policy in ques on United India Insurance Co. Ltd. the driving licence with the Pepsu case (Supra) is not
and hence, the claim made vs. Lehru & Ors. 1 a two Judge licensing authority before applicable in the present
by the Appellant/ Bench of this court has taken hiring the services of the ma er as it related to third-
Complainant was not the view that the Insurance driver. However, the situa on party claim is erroneous. It
payable. Whereas, it is Company cannot be permi ed would be different if at the has been categorically held in
argued by the Appellant/ to avoid its liability on the the case of Na onal
Complainant that at the me ground that the person driving me of insurance of the Insurance Co. Ltd. vs. Swaran
of employing the driver, the the vehicle at the me of the vehicle or therea er the Singh & Ors. 3 (SCC pp.341,
documents like driving licence accident was not duly licenced. insurance company requires para 110) that, “110.
etc. are generally checked but It was further held that the the owner of the vehicle to (iii)…Mere absence, fake or
no one usually verifies the willful breach of the condi ons have the licence duly verified invalid driving licence or
of the policy should be from the licensing authority or
38 F A D A Journal Feb-Jun 2020 | fada.in
Consumer Case Studies
disqualifica on of the driver produces a licence which on Company is able to prove was not available with them. It
for driving at the relevant me, the face of it looks genuine, that the owner/insured was is not the conten on of the
are not in themselves defences the employer is not expected aware or had no ce that the Respondent/ Insurance
available to the insurer against to further inves gate into the licence was fake or invalid Company that the
either the insured or the third authen city of the licence and s ll permi ed the person Appellant/complainant is
par es. To avoid its liability unless there is cause to to drive, the insurance guilty of willful negligence
towards the insured, the believe otherwise. company would no longer while employing the driver.
insurer has to prove that the con nue to be liable.
insured was guilty of If the employer finds the The driver had been driving
negligence and failed to driver to be competent to 12. On facts, in the instant competently and there was
exercise reasonable care in the drive the vehicle and has case, the Appellant/ no reason for the
ma er of fulfilling the sa sfied himself that the Complainant had employed Appellant/Complainant to
condi on of the policy driver has a driving licence the Driver, Dharmendra doubt the veracity of the
regarding use of vehicles by a there would be no breach of Singh as driver a er checking driver’s licence. In view of
duly licenced driver or one Sec on 149(2)(a)(ii) and the his driving licence. The above facts and
who was not disqualified to Insurance Company would be driving licence was circumstances, the
drive at the relevant me.” 3 liable under the policy. It purported to have been impugned judgment is not
(2004) 3 SCC 297 : 2004 SCC would be unreasonable to issued by the licencing liable to be sustained and is
(Cri) 733 place such a high onus on the authority, Sheikh Sarai, hereby set aside. The appeals
insured to make enquiries Delhi, however, the same accordingly stand allowed.
11. While hiring a driver with RTOs all over the could not be verified as the The respondent/ Insurance
the employer is expected to country to ascertain the concerned officer of the Company is held liable to
verify if the driver has a veracity of the driving licence. licencing authority deposed indemnify the appellant.
driving licence. If the driver However, if the Insurance that the record of the licence
fada.in | Feb-Jun 2020 F A D A Journal 39
Digital Retailing
Offers are Options: Here’s How Digital Retailing Helps
You Get to the Final Deal? - Cox Automo ve
Welcome to the upside- How can this be, in the age of monthly payment in mind, it’s digital retailing model, the
down world of price digital accuracy and ‘know not the exact car they want, or reality can at mes be as
and payment. before you go?’ maybe they think the dealer different as the customers who
will make thousands on the walk through your showroom
Dealers today know the drill: a Some customers simply like to transac on – and they just doors. Offers start low, but
shopper hits the website nego ate. In fact, they’ve been want a fair price. Online, it’s all numbers and approvals
researching their next new car, condi oned to do so, with about price comparison require verifica on and
with perhaps the most years of experience buying a shopping, dealer vs. dealer, a nego a on. It all sounds
important piece of informa on car the old-fashioned way. And star ng salvo in the inevitable familiar, but with the added
for them being the payment. in that way selling cars today tug-of-war over a few hundred power of star ng the process
They’ve already looked at the isn’t much different than it dollars. Payment fantasies and online, where informa on is
vehicle on online pla orm and always has been. It’s ul mately confusion stem from a variety transparent and steps to
the OEM site, and now they’re not necessarily about the of factors, from automaker purchase happen more
at your dealership site ready to payment, but payment MAP restric ons to inaccurate efficiently.
get down to details. op ons. A lowball offer is and customer financial data and an
Somewhere, somehow, they will always be a place to start overwhelming desire by the TRANSPARENCY IS FRIEND,
think a monthly payment of the conversa on, pour the dealer to show only one NOT FOE
$250 is doable – when the real coffee and nego ate with a payment – or none at all.
payment is around $500 (plus customer who is obviously In fact, transparency is more
tags and taxes). willing to do so. That’s the A good digital retailing solu on powerful for you than the
bread and bu er of the can help solve these conflicts. customer, for a few simple
“Look, digital showroom – both online and in Shoppers build a deal online, reasons. First, it means that
retailing and the the store. figure out monthly payments most shoppers will get a more
transparency it based on real lender rates and accurate picture of new vehicle
brings is not the Unrealis c consumer offers terms, value their trade-in, pricing, which provides a
issue. And the ‘race really come down to where the then shop a ermarket items. be er understanding of the
to the bottom?’ customer is in their buying They go to the dealership, narrow nego a ng window
That’s the reality of journey. A low-ball offer where a salesperson wraps up you truly do have – thus
the car business usually means one of several the transac on with a test elimina ng the no on of
today – sure, it things: they can’t afford the drive and finalizes paperwork. lowball offer success. More
started with the car, they have a different While that’s certainly the ideal importantly, it ’s about
internet, but understanding the shopper’s
customers have mo va ons and building a
always been willing personalized experience from
to travel four hours the start. Digital retailing gives
to save 500 bucks on you the data to understand
a $30,000 car. That’s what customers want and
not going to change.” what they can afford before
they arrive for a test drive. The
- Digital Retailing Dealer informa on they shared online
comes with them to the
dealership when they do,
which empowers dealership
salespeople with insights. For
the sales team, transparency is
perhaps the greatest
40 F A D A Journal Feb-Jun 2020 | fada.in
Digital Retailing
nego a on tool since the sales confusion,’ digital retailing an hour spent grinding a buyer online.3 83% say they want to
manager was invented. can provide current and on gap insurance or re do one or more steps of the
accurate rates from financial protec on might result in a purchase process online.3
TRANSPARENCY CAN HELP partners, and can help sale – but might leave a mark And the data shows when
REDUCE BAD LEADS determine a legi mate view on your CSI score. more of the car-buying
of their possibili es and process online, digital retail
There’s more to that, payments. That’s a far more Equipping your dealership leads are more likely to
however, and it has to do with accurate and effec ve way to with online F&I protec on convert to sales.4 But
availability of informa on. start the sales conversa on. op ons helps to educate consumers may use digital
Gated pricing puts up false shoppers ahead of me, retailing tools in different
roadblocks, which really does WELCOME TO THE WORLD OF improving their experience ways. Some may treat it as the
nothing but keep sales away THE “NO-BALL” OFFER – and se ng up your F&I team start of an order – one to be
from the dealership. In this AFTERMARKET STYLE for addi onal sales. In fact, completed at the dealership.
way, transparency helps to 63% of customers are more Given the industry’s culture of
ensure that the customer Think about F&I products from likely to purchase F&I products nego a on and conversa on,
rela onship starts in the right car shoppers’ perspec ve: if they could learn about them many will also treat it as an
way, with access to accurate they o en don’t know what it on their own me.2 By opening offer – one that fits
and important informa on is, why it’s important, how educa ng consumers online within the already-defined
about lis ngs. It not only much it costs, or if they’re first, your team can have an process at the dealership.
improves credibility, but also ge ng a good deal. Plus, they actual sales conversa on
generates more interest. think they’ve finally struck a about the value of packages Ul mately, all car buyers want
Dealers that include a price on deal with you and have a good and add-ons the customer is an experience that’s efficient,
their lis ngs on Autotrader understanding of the price and already familiar with – and produc ve, and complete –
get 53% more vehicle detail payment, and then here come interested in buying. from ini al credit check to
page (VDP) views per lis ng.1 the F&I product pitch that a ermarket products. Make
They also get 65% more VDP sounds good but then jacks up AN OFFER IS AN OPTION – sure you choose a digital
views for lis ngs the monthly payment they AND A CONSTRUCTIVE START solu on that delivers that level
merchandised with mul ple thought they had agreed to TO THE SALE of flexibility and transparency.
custom photos versus stock and locked in. The en re The more informa on the
photos.1 Here’s an example: experience is frustra ng and Here’s the point: 7 in 10 customer shares, the more
Instead of hiding behind the shrouded in a fog of confusion. consumers say they are more effec ve the sale becomes for
MSRP ‘cloak of consumer So it’s no surprise, then, that likely to buy from a dealership the dealership.
if they could start the process
fada.in | Feb-Jun 2020 F A D A Journal 41
Leadership
How New CEOs Can Boost Their Odds Of Success
A data-driven look at the link between the strategic moves of new CEOs and the performance of their companies
highlights the importance of quick ac on and of adop ng an outsider’s perspec ve.
- McKinsey & Company
The success of CEOs is their first two years in office. however. What’s more, the moves than those who joined
deeply linked to the Using annualized total returns sheer number of moves seems well-performing
success of the companies they to shareholders (TRS), we to make a difference, at least organiza ons. To learn
lead, but the vast body of assessed their companies’ for CEOs who join poorly whether this idea was true,
popular literature on the topic performance over the CEOs’ performing companies. Also, we looked at how each
explores this rela onship tenure in office. Finally, we external hires appear to have a company had been
largely in qualita ve terms. analyzed how the moves they greater propensity to act. performing rela ve to its
The dangers of these made—at least those visible to industry counterparts prior to
approaches are well known: external observers1 —and the These findings have important the new CEO’s arrival and
it’s easy to be misled by health of their companies prac cal implica ons for new then subdivided the results
outliers or to conclude, when they joined them CEOs and the boards that hire into three categories: well-
mistakenly, that prominent influenced the performance of them: focus early on a few bold performing, poorly
ac ons which seem correlated those companies.2 moves well suited to the performing, and stable
with success were responsible context of your company, and companies.4 When we
for it. The results of this analysis, recognize the value of the reviewed the moves by
bolstered by nearly 250 case outsider ’s perspec ve companies in each of these
We tried to sidestep some of studies, show that the number —whether or not you are one. categories, we found that new
these difficul es by and nature of the strategic CEOs act in similar ways, with
systema cally reviewing the moves made by CEOs who join Surprising similari es a similar frequency, whether
major strategic moves (from well- and poorly performing they had joined well- or
management reshuffles to companies are surprisingly CEOs taking the helm at poorly performing
cost-reduc on efforts to new- similar. The efficacy of certain poorly performing organiza ons. CEOs in
business launches to moves appears to vary companies, feeling compelled different contexts made bold
geographic expansion) that significantly across different to do something to improve moves—such as M&A,
nearly 600 CEOs made during groups of companies, results, would have a greater changing the management
propensity to make strategic
42 F A D A Journal Feb-Jun 2020 | fada.in
Leadership
team, and launching new striking contrasts between Ÿ Poorly performing strategy. Organiza onal
businesses and products—at organiza ons that had been companies enjoyed +0.8 redesigns are challenging for
roughly the same rate. performing well when the new percent TRS when they all companies and may, in
CEO took charge and those reshuffled their some cases, be premature for
Contextual contrasts that had been performing management teams. But organiza ons in significant
poorly: when well-performing flux.6 Also plausible was the
Although new CEOs companies did so, they finding that cost-reduc on
transi oning into companies Ÿ Organiza onal redesign destroyed value. programs appear to improve a
that have been performing was correlated with company’s TRS rela ve to
well and CEOs transi oning significant excess TRS (+1.9 We recognize that excess TRS those of its counterparts for
into companies that have been percent) for well- CAGR does not prove a causal both well- and poorly
performing poorly make performing companies, but link; too many other variables, performing organiza ons,
similar moves with a similar not for low performers. some beyond a CEO’s control, though the effect is strongest
frequency, that doesn’t mean have an influence. But we do for weak ones.
those moves are equally Ÿ Strategic reviews were find the differences that
effec ve. We measured the correlated with significant emerged quite plausible. It A final point on context is that
performance of companies by excess TRS (+4.3 percent) stands to reason that troubled the bar for top performance
excess TRS over a CEO’s tenure. for poorly performing companies would enjoy varies significantly by sector. In
At companies where chief companies but were less special benefits from major some, such as investment
execu ves made strategic helpful for companies that overhauls of management or services and automo ve, the
moves early on, we found had been performing well. TRS CAGRs of top-performing
organiza ons with new CEOs
are more than 16 percent
above those of their industry
counterparts. In other sectors,
such as media and
telecommunica ons, a CEO’s
company must outperform the
market by only a few
percentage points to be
classed in the top quin le. The
implica on is that new CEOs
seeking to calibrate their
star ng points and to priori ze
strategic moves should look
beyond top-level performance
metrics to understand what it
will really take to beat the
market.
Bold bouncebacks
We also sought to compare the
number of major moves that
new CEOs made in parallel at
well- and poorly performing
companies. Well-performing
companies had no discernible
pa ern. But in poorly
performing ones, CEOs who
made four or more strategic
moves at the same me during
their first two years achieved
an average of 3.6 percent
fada.in | Feb-Jun 2020 F A D A Journal 43
Leadership
excess annual TRS growth over
their tenures. Their less bold
counterparts in similarly bad
situa ons could claim just 0.4
percent excess annual TRS
growth.
These findings are in line with
earlier McKinsey research
showing how difficult it is to
reach higher levels of
economic profit without
making substan al strategic or
opera onal shi s. That has
also been our own experience
working with new CEOs on
turnarounds.
Outside views
When the me comes to companies. It’s no important to note that new Equally, there is value in
appoint a new CEO, corporate coincidence, in our view, that CEOs need not come from having outsiders who can
boards face a difficult the strategic moves that have outside companies to cul vate lean into the boldness that
ques on: promote an the largest gaps in the an outsider’s mind-set—or to their status naturally
execu ve from within or propensity to act include some be successful in their role. encourages. Some
choose an outsider? We of the most far-reaching ones: execu ves have done so by
turned our own lens to this organiza onal redesign, for While our results are averages crea ng new ways to
issue and found that the example, or geographic assess a company’s
performance of outsiders and contrac on. across mul ple organiza ons performance
insiders differed significantly. objec vely—for example,
Externally appointed CEOs Poorly performing companies and industries, they do suggest by taking the view of a
have a greater propensity to are more likely to appoint poten al acquirer or
act: they were more likely to external CEOs, and corporate a few principles for new CEOs: ac vist investor9 looking
make six out of the nine performance tends to revert to for weak spots that require
strategic moves we examined. the mean. But the TRS edge of Ÿ Adopt an outsider’s mind- immediate a en on.
The size of the gap in outside hires was substan al: set. On average, external Others have reset
frequency—in other words, over their tenure, they hires appear to make more expecta ons for the annual
the chance an external CEO outperformed their internally moves during their early alloca on of resources,
would make a par cular move promoted counterparts by a years. This doesn’t mean changed the leadership
minus the chance an internal margin of more than five to that insiders are the wrong model and execu ve
CEO would do the same one—on average, a 2.2 choice for boards. But it compensa on, established
thing—was much greater for percent excess TRS CAGR, does suggest that it’s an innova on bank, and
the moves external CEOs compared with 0.4 percent. cri cal for insiders to resist looked for addi onal ways
opted to make (Exhibit 2). legacies or rela onships to bring an external
Clearly, this performance which might slow them perspec ve to the heart of
External CEOs almost certainly differen al is the result of down and that approaches
have a leg up when it comes to mul ple factors, and it’s which help insiders adopt
bold ac on. They are generally an outsider ’s mind-set
less encumbered by have great poten al.
organiza onal poli cs or
iner a than their internal
counterparts. They may also
be more likely to take an
outside view of their
44 F A D A Journal Feb-Jun 2020 | fada.in
Leadership
the leadership approach. companies rela ve to that at once, but it does suggest window of opportunity
of their peers and, in light a bias toward boldness and doesn’t last long.
Ÿ Don’t follow the herd. On of the star ng posi on, ac on. Plan a comprehensive
average, new CEOs make assess the odds that set of moves that will On average, an inflec on
many of the same moves, poten al moves will pay significantly improve your point arrives during year
regardless of star ng point. off. company’s performance, three of a CEO’s tenure. At
They will do be er, and make sure that you aim that point, a CEO whose
however, by carefully Ÿ When you’re behind, look high enough. company is underperforming
considering the context of at the whole playbook. On is roughly twice as likely to
their companies and average, CEOs taking the New CEOs take the helm with depart as the CEO of an
leveraging more scien fic helm at underperforming a singular opportunity to outperforming one—by far
ways to assess their companies do be er when shape the companies they the highest level at any me in
star ng points. For they make more major lead. The best ones ar ully a chief execu ve’s tenure.
instance, some new CEOs strategic moves, not fewer. use their own transi on into During this rela vely short
take stock of the economic- That doesn’t mean they the CEO role to transform window, fortune favours the
profit performance of should try to do everything their companies. But this bold.
Attention: Members
Engagement of GST Consultants
GST consultants – Ms Puloma Dalal and Dr Sanjiv Agarwal, based in Mumbai and Jaipur respec vely, have been
engaged by F A D A on retainership to help members deal with the complexi es of GST law and procedures. They
will, on reference made by F A D A, guide and give opinion on various issues rela ng to GST as applicable to
automobile dealers.
Federa on of Automobile Dealers Associa ons (F A D A) will forward the queries raised by members to
them for their opinion. While Ms Puloma Dalal and Dr Sanjiv Agarwal will, essen ally, give legal posi on
and clarifica on, supported by case law, on various GST issues raised by F A D A Members, those wan ng to
engage them as counsel, will have to pay separately as per terms that may be mutually agreed to.
Member seeking clarifica on or legal posi on related to GST as relevant to automobile dealer, may send their
queries to F A D A , 804-805-806, Surya Kiran, 19, K G Marg, New Delhi – 110 001. (E-mail Id: [email protected]).
fada.in | Feb-Jun 2020 F A D A Journal 45
Road Safety
Prevention & Using Taxation to Decongest Roads
- Maj P T Choudary (Retd), Chairman - Ins tute for Democra c & Economic Affairz (IDEAz)
Summary included). in China about 2.61 Lakhs and even of fatali es from
and in Japan less than them, of all the countries in the
Increasing vehicular traffic Ÿ Roads are as, if not more, 5,224. Hence it is not the world, though perhaps not if
especially within urban areas, important to a City as its number of vehicles only measured per vehicle, or per
and the resul ng conges on of Parks and Open spaces, so that is responsible for the kilometer length of road, or
available road space, is leading adequate area should be high number of traffic per capita, or even per vehicle
to an ever increasing number dedicated to them and care accidents but other factors kilometer. A more accurate
of serious traffic accidents. All taken to properly maintain too. Most of the fatali es and representa ve measure
this requires us to work for the them. resul ng from accidents in would be as a factor of the
preven on and mi ga on of India (about 81 percent) density and diversity of traffic
accidents, management of Ÿ Convenient and Effec ve are of two- wheeler riders and quality of road discipline.
traffic, using taxa on and Mass Rapid Transport and pillion riders, of which
other policies to decongest systems are the only way to most are due to the lack of However any such sta s c
roads, and providing reduce vehicular road road discipline and to the should be seen in proper
immediate and effec ve First traffic within a city. not wearing of helmets. context before reaching any
Aid and Trauma Care to the conclusion on the ac ons to be
Vic ms in order to save lives Ÿ A vehicle user pays a road Ÿ Desirable road area as taken to reduce accidents and
and reduce vehicular tax as per the foot print and percentage of total city fatali es. Comparisons of
pollu on. es mated usage of the area is 25 percent, Indian number of accidents /fatali es
vehicle in addi on to the ci es have much less. by Country are fallacious
We need to look at accident property tax that all in a city (Delhi – 22 percent, because such a comparison
preven on vide educa on, must pay, and hence should Mumbai – 17 percent, does not account for
ensuring strict compliance be at least allowed Hyderabad – 11 percent popula on size, popula on
with effec ve penal es for equitable right to road use and Kolkata – 6 percent) density, availability and quality
non-compliance of rules and, as for the pedestrians, of road area with respect to
even using taxa on and other some of whom may not be Ÿ Also as the average speed total area of Ci es, access
policies as a means to paying any property tax at of traffic in Delhi is 20 control to high ways, vehicular
decongest the roads etc. all. kms/hr, Mumbai 18 use, availability of foot paths
kms/hr, Hyderabad - 14 and pedestrian /animal
Road/Traffic accidents Key Metrics kms/hr, Chennai - 12 crossings, variety and
kms/hr, Bengaluru - 8 limita ons of vehicular and
Key Concepts Ÿ Of the en re vehicle kms/hr, calling for other traffic on roads and
popula on (Trucks, Buses unnecessary safety highways, and knowledge and
Ÿ A road is a river of traffic & Cars) in the Asia Pacific features as may be implementa on of road / lane
and all movement along or Region, Japan has 34 required for cars on Express discipline by all users of roads
across, in both direc ons percent, China has 17 ways and cars abroad only and those crossing them.
and for a variety of vehicles percent and India only 8 serve to escalate the cost of
and even pedestrians, has percent. cars to beyond the reach of If these factors are taken into
to be so regulated as to a two-wheeler owner who account the picture would not
allow a smooth flow. It Ÿ Number of cars per seeks to upgrade his family present Indian roads to be as
should only be crossed at thousand popula on is to a car. No one can really deadly as looking at only the
designated crossings about in - USA - 838, argue that a simple four numbers does.
(Zebra Crossings or foot Average across Europe - wheeler with at best a seat-
over bridges or under 543, China - 179, Malaysia - belt is not far safer than a Of course, this does not in any
passes, analogous to 433, Srilanka - 70, while in two-wheeler especially for way reduce the sheer enormity
bridges & ferries on real India it is only 28, and a family. of the human tragedy and also
rivers). hence talk of too many cars of the economic costs the road
is misleading. India has by far the highest accidents cause, and the
Ÿ Traffic Rules need to be number of traffic accidents, importance of a ending to as
complied with by all road Ÿ Number of fatali es from
users (Pedestrians traffic accidents in 2010 in
India was about 1.58 Lakhs,
46 F A D A Journal Feb-Jun 2020 | fada.in
Road Safety
many, if not all, of the causes as 2. Improve the footpaths wheelers owners and by medical care, and about
urgently and comprehensively and clear them of all pedestrians too, by what their reac on to
as possible by all concerned. obstruc ons. As far as ensuring strict penal es accidents, either as one
Ac ons Required possible they should be of for any and all infrac ons. involved or as an onlooker,
A start should be made by adequate width to allow If not financial penal es should be. Also properly
recognizing that road safety is the expected pedestrian then at least by enforced staffed and equipped
equally the responsibility of all traffic and con nue so all community service which Ambulances should be
road users and not just the along the en re length of may include cleaning the posi oned so as to respond
bigger vehicle drivers. The
the road without roads and helping in traffic to any accident report and
a tude to blame only the bo lenecks and also be regula on, a er a ending reach the accident site
driver of the vehicle / bigger
comfortable to walk on suitable training and within the shortest
withconvenientkerbheight. orienta on programmes possible me as deemed
vehicle for every accident,
even if it is not really his / her 3. M a r k o u t “ Z e b r a etc as may be necessary. prac cal and necessary.
fault should be overcome. Crossings” at reasonable 5. Ensure all traffic on the 8. It is noted that knowledge
Vote bank ideology should not intervals and install road is capable of moving of safety features leads to
be a considera on in this “Camel / Penguin” type atleast at the speed limit over confidence & hence
ma er if everyone is to be really push bu on indicator applicable on that stretch, to a greater level of risk
treated as equal before law. lights, indica ng “Walk” - slower moving vehicles taking or rashness. Seat
Every road user is equally “Don't Walk” signs, to cause serious bo lenecks belts, air bags, ABS etc in
responsible to ensure that he / warn regular traffic to stop in the easy flow of traffic. cars encourage many a
she does not behave in a way and allow safe crossing to However do ensure that driver to take chances
as to endanger him / herself or pedestrians. Of course the speed limits are he/she would otherwise
the other road users, and such lights should only prac cal and not too low not have taken. Everyone
should always be equally operate again a er a or unnecessarily should be made aware of
conscious of the rights of the specified period to allow precau onary, leading to such a tendency and be
other road users. To do for vehicular traffic them being ignored. taught to overcome it.
otherwise is to behave in a rash
and negligent manner, movement also. These 6. Ensure that all the road 9. C o m m u n i t y B a s e d
whether driving, or riding, or could also be synchronized users follow the rules laid Organiza ons (CBOs) such
jay walking and each such with the nearby traffic down, eg: use of seat belts as Free Masons, Lions,
ac vity should be duly signal system. Pedestrians in cars and wearing of Rotarians, Colony
punishable under the law. should also be taught to helmets for two wheeler Associa ons, local police
Every road user pays dearly for understand that if riders, func oning lights and even doctors of
anarchy either in me lost, fuel everyone con nues and indicators, use of neighbourhood clinics
wasted, extra pollu on and crossing where ever they reflectors etc and strictly and hospitals, must be
maintenance costs and most of decide or whenever they penalize defaulters. If any encouraged to become
all in serious injuries & lives lost. want, the vehicle drivers of the rules are deemed to involved in educa ng the
will soon tend to disregard be unnecessary or people on the right way to
Ac on should begin on many “Zebra crossings” as imprac cal in view of the drive and do things.
otherwise they will never traffic condi ons of today
fronts, some of which are as be able to proceed. Such - then such rules need to Experience of other countries,
listed below: behavior is called 'Jay be suitably amended or shows us that the quickest way
1. Educate children on Walking' and is a rash and even be deleted. Having to bring about awareness of
proper road usage, negligent behavior, rules but not enforcing traffic rules and of the
method of crossing the endangering not only the 7. them only inculcates common courtesies of road
road and the common 'jay walker' but also the greater disregard for use is by properly educa ng
courtesy to be extended 4. other road users and is a other rules and laws. the children and encouraging
to other road users. crimethatmustbepenalized. them to inform and remind
Encourage them to point To reduce the number of their elders, and by ensuring
Ensure strict lane fatali es, ensure
out and remind the key discipline & implemen- appropriate training is due training to the applicants
elements of such courtesy ta on of ALL traffic rules, given to all applicants for a for a driving license.
to their parents and elders by ALL vehicle owners driving license about 'First However, as the old saying
when they see them err. even 2- wheelers and 3 - aid' and basic emergency goes 'Preven on is be er than
fada.in | Feb-Jun 2020 F A D A Journal 47
Road Safety
Cure'. Therefore the best way rules and for using the roads discouraging another entrant. the following measures may be
to get everyone to follow these safely and with considera on considered as being more
rules is by ensuring strict for the other road users. To Calls for 'ad hoc' and prac cal and effec ve, and
policing and penalizing of paraphrase the Transport 'piecemeal' solu ons overallbe errevenuegenerators;
every defaulter for every Department Mo o, (conges on tax, alternate day
infrac on, whether major or usage of vehicles, even more 1. To reduce the conges on
minor, and whether he be a Remember - Safety Always For prohibi ve Road Taxes, on the roads:
poor man illegally dwelling, or All on Roads (SAFAR) controls on vehicle popula on
even sleeping, on the etc) being jus fied as being a. Expedite and expand
pavements and road sides, or a Proposal for more equitable applicable in other States or the Public Transport/
richer two-wheeler rider or an taxa on of road vehicles to even other Countries, without Metro/MMTSproject.
even richer vehicle driver or an reduce conges on and proper reference to their
employee driving a vehicle of pollu on context are NOT the solu on. b. Improve the roads
any sort. Equality of Proper understanding of the and pedestrian paths
considera on before the law Every ci zen must pay his/her problems and their causes and and remove all
does not allow such share of property tax which how they can be tackled in the encroachments
dis nc ons to be made should include an equitable local context is what is called thereon. The
between any of such people. share toward building and for. 'Knee jerk' reac ons may minimum width of
Sympathy doesn't mean maintaining the roads/lanes. sound right in the short term the roadway should
allowing them to transgress The commercial shops and but will only end up further be at least 20 mtrs
the law, put themselves into establishment owners should compounding the problem. with 2.5 mtrs wide
posi ons of risk and then claim pay more to also cover the footpaths on both
of being a vic m. extra use of the roads by their The transport sector sides and proper
customers. contributes greatly to the Tax storm water drains.
Also the tendency to Revenues of the State,
automa cally assume that the The municipality should primarily through the GST and c. B a n s l o w m o v i n g
bigger vehicle driver is at fault maintain the roads and also also the Road Tax collected vehicles / animal
should be avoided. Laws which provide for proper collec on & (Life or Quarterly etc) and also carts / hand carts on
call for immediately booking disposal of not only garbage through the other various fees roads in the central
the driver under a rash and and sewerage but also of storm charged for licenses / permits areas of the city.
negligent driving charge water to allow the roads to be etc. The tempta on to
should be properly viewed in kept properly usable. increase revenue collec on by d. Install proper switch
context and implemented only increasing the burden of life operated “Stop / Go”
if found applicable. A jay Conges on of vehicles on tax is actually an a empt to kill or “Walk / Don't
walking pedestrian, or a two- roads and the pollu on caused the 'goose that lays the golden Walk” lights at Zebra
wheeler rider trying to insert by them do adversely affect egg'. Of course the reasons crossings, duly
him/ herself into every small the other people who live or given are always different in synchronized with
gap between vehicles, should work nearby. Many ideas are order to seem more poli cally nearby traffic signal
be held as responsible for such floated to reduce such affects, correct. eg: lights. Insist on all
rash and negligent behavior as ban the vehicles, restrict their pedestrians only
any other road user. Adults use to certain days or mes, 1) We are only trying to control crossing the road at
who allow li le children to run impose puni ve tolls / taxes the traffic conges on or, such points and
across traffic bound roads and so on, all 'Knee -jerk' strictly penalize 'Jay
without accompanying and reac ons calling for 2) We are only aiming to Walking'.
holding them, are also to be inequitable and unrealis c reduce the pollu on and so
held responsible for any responses The objec ve on. e. Teach Traffic / Road
accident that such behavior should be to equitably tax the courtesies to all
might cause. Driving while vehicle operator for his/her Proper considera on will users, from children
under the influence of alcohol, contribu on to such prove these are fallacious to applicant drivers &
or other intoxicants, should be conges on and pollu on so as arguments, which if really ensure compliance
strictly & severely punishable. to discourage unnecessary implemented would severely even from pedestrians.
use. Ofcourse it can also be reduce revenues with not
Every road user should be held argued that every me one much improvement in the f. D e l e t e a l l
responsible for following the vehicle adds to the traffic and parameters desired. If unnecessary and
makes the conges on worse, it however it is really the unimplementable
also makes it be er by inten on to improve ma ers, traffic rules and lay
down prac cal speed
limits (not just state
48 F A D A Journal Feb-Jun 2020 | fada.in
Road Safety
15 kmph or 40 kmph, Vehicles coming into specified area, who does not possess a the workshop of any
when 60-80 kmph is high tax rate Pin code areas cer ficate from the concerned Authorized Dealer of
more prac cal and from lesser tax rate Pin code Municipal Authority that vehicle should
realis c) on express- areas should be asked to pay a confirming that an adequate also be considered.
ways 120kmph is a toll tax valid for a day / a week / private parking space for the The fee for such
more realis c limit, or a month as elected by the vehicle is available at the cer fica on could be
unless the vehicle is vehicle owner, and like the required place, as road side equitably shared
not rated for that pollu on cer ficate this token parking adds to conges on. between the Dealer
speed. Then strictly should be displayed on the Such a tax could be greater in and the Transport
enforce all traffic windshield or body of the areas with greater conges on. Authority.
rules and collect fines vehicle, and a penalty imposed
for even minor for not ge ng the token It has been noted that b. Insist that the Seller
infrac ons. renewed .Commercial vehicles increasing the fuel costs as a of a used vehicle,
within the city should be measure to restrict usage or both private and
g. Implement the fines charged at double the rates increase vehicle taxes / costs to commercial, be
under the new Act. If except at night. Ofcourse if restrict vehicle purchases, can required to get a
anyone claims the they are by-passing the ci es only be a temporary solu on. similar Fitness
fines are too heavy, or towns using the Ring / By- Such solu ons have not been cer ficate from the
the answer is – then Pass roads then they need not found to work very well Authorized Dealer of
don't break the Rules. be charged any extra tax. wherever tried and hence that Vehicle to ensure
If some few are should not be resorted to. that an unfit vehicle
unable to pay the fine It should be noted that a tax not be passed on to
it may be compoun- based on mileage run is more It is also necessary that Life or the Buyer, not earlier
ded with serious appropriate than the payment Road use Tax being collected than within 7 days of
community service. of a life me / one me tax, be used primarily for the date of taking
which encourages more usage improving the roads and possession of the
Introduce differen al road tax of the vehicle as the cost per providing traffic facili es as vehicle or the date of
based on conges on / kilometer run actually reduces given above. sale, whichever is
pollu on. The road tax for a the more the vehicle is run. earlier.
city dweller should be higher However ll a prac cal way to 2. To reduce the cause of
than that for a town dweller impose such a tax is arrived at, road accidents and c. E n c o u r a g e
which should in turn be higher the concept of tax for a period reduce pollu on: replacement of even
than that for a rural dweller. of 3 years for a private vehicle private older
The road tax for CVs should be renewable for an addi onal, a. Implement the ban vehicles, with more
far higher, or perhaps be the say 2 years each me on all over 15 years environmentally
same as for the private vehicles therea er upto 15 years, and old CVS, including taxi acceptable newer
of the area the commercial yearly therea er, and an ini al cabs & auto rickshaws. vehicles, by offering
vehicle is to be used in, but for period of 2 years for a In addi on to suitable incen ves,
a much shorter period keeping commercial vehicle renewable pollu on, these especially for two
in view the nature and annually therea er for a total vehicles risk wheelers with two-
intensity of its opera on. period of 10 years or upto 3 passenger safety due stroke engines.
lakh kms (or such mileage limit to greater wear & tear
This can be done by mapping as may be set for each type of and metal fa gue d. Proper enforcement
the registra on area with the vehicle) whichever is earlier, leading to component of traffic rules will
PIN code, implemen ng the may be considered. Also a failure and are also lead to smoother
tax rates as per the PIN code of 'conges on cess' can be added therefore o en found flow of traffic and
the vehicle owner's address. to the parking cost in such to be the cause for reduced emissions,
The present system of areas, which can be enhanced frequent & dangerous and to less use of
alloca ng registra on as per in congested areas and at the road accidents. The horns thus reducing
the District / Mandal / Tehsil more stringent noise pollu on too.
and Village is not sa sfactory mes when conges on is high. op on of requiring all
as the District may stretch commercial vehicles 3. To increase Revenues:
across many postal Pin code An addi onal parking tax may to be rigorously and
areas and cause confusion for also be collected from any comprehensively a. Call on 15 years and
address verifica on. vehicle owner resident in an tested and cer fied older private vehicles
as 'Fit', annually at to meet pollu on
norms or pay a
fada.in | Feb-Jun 2020 F A D A Journal 49
Road Safety
pollu on tax and also convenient. Charges persons in the community to such pa ents at the soonest,
to pay an annual road for correc on of errors see and understand how for transfer to a more
tax a er sa sfactory in Engine or Chassis accident vic ms should be comprehensive facility if they
fitness test, as life tax numbers could be handled or more importantly are not equipped to provide
is for a maximum of double the above rates NOT handled. the necessary care themselves.
12 years. and also require RTA
verifica on. They can also work with the Such skills too should be a
b. Impose a 1 percent relevant authori es, and with necessary part of their medical
Transfer Fee, on d. I n t r o d u c e s t r i c t organiza ons such as the NCC educa on curriculum and
whatever the pollu on standards and the EMRI, to offer should call for regular
declared price be, for for 2-stroke engine standardized training at upgrada on/ requalifica on.
change of owner for vehicles with higher schools & colleges and award Star ng with requiring medical
all used vehicles. This penal es or cer ficates of capability to graduates to serve 12-18
fee should be low to registra on fees, with those who a ain to set levels months in rural PHC's, as part
encourage the right excep on for such of First Aid, on similar lines as of a team of at least three
declara on of price. engines as meet the for Life guards & Scouts skill medical graduates under a
required pollu on awards. To encourage wide fully qualified doctor, before
c. I n c re a s e fe e s fo r norms. Enforce par cipa on, such awards according them permanent
Registra on to more Pollu on checks and should carry some weightage registra on. This will ensure an
realis c levels say, Rs penalize defaulters. for College Entrance improved level of Trauma Care
500 for 2W and Rs Examina ons. at every PHC/Clinic/Hospital.
1 0 0 fo r 4 W. S to p Finally: Training for First Aid The Govt should make all the
harassing the Public In most cases the accident Police and legal requirements
by trying to increase Emergency Medical Care and vic ms need emergency care in such cases as minimum and
revenues by proper response to all types of and immediate transfer to convenient as possible to
excessive add on accidents is essen al. Hence nearby hospitals. It is therefore encourage the by-standers and
charges for small such training should be essen al that facili es like the doctors to respond
correc ons etc. Such extensively available and people EMRI are expanded and without fear of harassment.
correc on charges encouraged to undergo it. properly supported to enable
could be standardized such transit to be as quick as All this will make our ci es
at say Rs.100 or The Community Based possible. Finally the Staff and be er places to live in and will
Rs.200, for all vehicles Organiza ons can also organize Doctors at ALL clinics and also greatly mi gate the cost to
and the procedures visits to EMRI and even to the hospitals need to be able to at life and limb of the vic ms of
made more hospitals to allow selected least stabilize the condi on of any Accident.
youngsters and relevant
50 F A D A Journal Feb-Jun 2020 | fada.in
The words you are searching are inside this book. To get more targeted content, please make full-text search by clicking here.
Feb-Jun 2020 issue of F A D A Journal
Discover the best professional documents and content resources in AnyFlip Document Base.
Search