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January 2021 issue of FADA Journal

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Published by FADA Journal, 2021-02-22 01:08:55

F A D A Journal - January 2021

January 2021 issue of FADA Journal

Federation of Automobile Dealers Associations | fada.in | Estb: 1964 January 2021 | Vol. 20 | Issue: X | Pages : 60 | Rs. 50

fada 4, President’s Message

Journal Scrappage Policy Finally Sees Light of the Day!

Insights from the Automobile Retail Industry 6, India Economics

RBI MPC Review | Inflations & IIP has Positive
& Economic Surprise

15, Demystifying GST

Union Budget 2021-22: Changing Landscape
of GST Law

25, Perspective 17, FADA in News

THE KEY OTOURROAHD ASANFEDTYS
IS IN

Automotive Retail 2030 FADA Initiates Annual Dealer Satisfaction Study | FADA Celebrates Road
45, Dealership Profitability Safety Day on 12 Feb’21 | FADA’s 300 GC Meeting on 13 Feb’21

30, Business Achievers

Big Play

Why Dealerships Need To Improve Vijay Shekhar Sharma
Their Customer Experience Founder & CEO, PayTm

Dreaming big is what Vijay passionately believes in. Small wonder
then that “Go big or go home,” is the poster right at the entrance
of Paytm’s corporate office in Delhi.

Federation of Automobile
Dealers Associations (F A D A)

is the apex body of Automobile Retail Industry in
India.

F A D A has been representing over 15,000
automobile dealers having over 26,500 dealerships
including 16 associations of Automobile Dealers at
the Regional, State and City levels accounting for
90% of market share in India since 1964. Together,
we employ over ~5 million people in the country
(including Direct and Indirect employment) at
dealerships and service centres.

contents

January 2021 | Vol. 20 | Issue: X

4 President’s Message THE KEY OTOURROAHD ASANFEDTYS
IS IN
Scrappage Policy Finally Sees Light of the Day!
Printed and Published by Saharsh Damani on behalf of Federa on of
6 India Economics Automobile Dealers Associa ons, 805, Surya Kiran, 19, K G Marg, New
Delhi-110 001.
RBI MPC Review | Infla ons & IIP has Posi ve & Economic Surprise
Printed at Sita Fine Arts P Ltd, A-16, Naraina Indl Area - II, New Delhi
8 Auto Retail Registration
Editor: Saharsh Damani
FADA Releases January’21 Vehicle Registra on Data
Advertisers’ Index 60
12 FADA Research 59
Kuttukaran Group 33
Impact of Price Rise and Wai ng Period on Automobile Sector Provincial Group 51
Shriram Transport Finance
15 Demystifying GST United Medicity

Union Budget 2021-22: Changing Landscape of GST Law

17 FADA News

FADA Ini ates Annual Dealer Sa sfac on Study | FADA Celebrates Road
Safety Day on 12th Feb’21 | FADA’s 300th GC Mee ng on 13th Feb’21

24 Govt Noti ication

25 Perspective

Automo ve Retain 2030

30 Business Achievers

PayTM Big Play - Success Story of Mr Vijay Shekhar Sharma, Founder & CEO, PayTM

34 Surveys & Studies

Gen Z Consumers Start to Shape Indian Credit Market as They Become Increasingly Credit Ac ve

37 Union Budget 2021

Make in India 2021: Budget Impact on Automobile Sector

40 Automotive Technology

Rethinking How Cars Are Built—with Modern Consumers in Mind

44 Competition Law Updates

45 Dealership Pro itability Editor, F A D A Journal and CEO, FADA

Why Dealerships Need To Improve Their Customer Experience Mr Saharsh Damani
T +91-11-6630 4852, 2332 0093, 2332 0095
46 Consumer Case Studies E [email protected]

50 Membership Of ice Bearers Vice President
Mr Manish Raj Singhania
52 Industry Track President E [email protected]
Mr Vinkesh Gulati
January 2021: Auto Retails Remain Flat E [email protected] Treasurer
Mr Sai Giridhar
55 Chart of the Month Secretary E [email protected]
Mr C S Vigneshwar
56 Statistics E [email protected]

Vehicle Sales, Y-o-Y Growth & Market Share - January 2021

President’s Message

Scrappage Policy Finally Sees Light of the Day!

FADA observes February 12, 2021 as FADA Road Safety Day

vinkesh Gulati, president - FADA Dear Friends,

At the outset I wish to thank our Hon’ble Finance Minister, Ms Nirmala
Sitharaman ji for presen ng a futuris c budget and announcing the
proposal to implement the much awaited Vehicle Scrappage Policy
(voluntary), to phase out old vehicles. If we take 1990 as the base year, there
are approximately 37L CVs and 52L PVs eligible for voluntary scrappage. As
an es mate, 10% of CV and 5% of PV may s ll be plying on road and will be
available for scrappage. The details of the policy should be coming out
any me. It will give us deeper idea to understand its real impact on
incen vising retails.

Also, other outlays in the Budget benefi ng the retails include -
infrastructural development viz building of 6,575 km Highway works
proposed in Tamil Nadu, Kerala, West Bengal and Assam and another 19,500
km work for Bharat Mala project will provide much needed boost to
Commercial Vehicles especially M&HCV segment.

Even though in our pre budget memorandum we had requested for
deprecia on benefit on vehicles for individuals, reduc on of corporate tax
for proprietary and partnership firms, the same did not find men on in the
proposal. FADA would however, con nue to work on these proposals ll
they see the light of the day.

Coming to the State Developments, I would like to applaud Odisha’s State
Chairperson Mr Pradeep Agarwal & his en re team as they were able to get
a major impediment in vehicle registra on resolved as TC Odisha passed an
order sta ng that RTOs will not insist for produc on of TC details of financier
at the me of registra on and termina on of hypotheca on.

In Rajasthan, State Chairperson Mr Sharvik Shah wrote to Secretary &
Transport Commissioner to link private sector banks for RTO payments & for
removal of mandatory clause for installa on of PUC machines at dealerships
since the facility was available at Petrol pumps and mobile PUC vans.

In Maharashtra, Mr Amar J Sheth, Chairperson FADA Maharashtra along
with Mr Ashish Harsharaj Kale, Immediate Past President, FADA met CEO
MIDC regarding no ces being received by dealers for using Industrial land
for Commercial purposes and submi ed a memorandum regarding the
same.

In Chha sgarh, Vice President Mr Manish Raj Singhania along with State
Chairperson Mr Anil Agarwal and Regional Directors met Transport Minister
Chha sgarh for ge ng the Type Approval issue resolved, and similarly in
the states of UP, J& K and Punjab, dealers took up the ma er of introducing
faceless and paperless registra on of private vehicles and online renewal of
Trade licences with the concerned State transport authori es.

Similarly, in the case of BS IV vehicle registra on, Delhi State Chairperson Ms
Garima Misra met State Transport Minister, & Transport Commissioner in
ge ng the SC order implemented in spirit for ge ng the BS IV vehicles
which were uploaded on or before March 31, 2020 registered. Though,

4 F A D A Journal January 2020 | fada.in

President’s Message

most vehicles of self registering dealers are ge ng registered to do our bit in helping mi gate road accidents. Every second,
but registra on is pending at non self registering dealers in Delhi either one life is lost or one is severely injured. I am happy to
NCR. As I write, we are taking legal steps to see that all BS IV share that FADA got the support from all Governing Council
vehicles as per the order are successfully cleared by Delhi Members, State and Regional Directors in driving this ini a ve in
Transport Authority. their respec ve States. Over 15,000 people took Road Safety
pledge from all across the country. Dealerships asked all walk-ins
To further strengthen our bond between FADA and its members, in their showrooms and workshops to take road safety pledge,
FADA office bearers will soon be holding statewise mee ngs with put up Road Safety Banner in their dealerships and followed
State Chairpersons, their en re team and all the members of the various ini a ves for keeping roads safer which included free
Associa on from that State to understand the issues which distribu on of helmets, crea ng awareness about wearing seat
dealers are facing with. This will help in building a more cohesive belt etc.
FADA by taking up local issues effec vely.
A er the success of 1st phase of Grow with Google which was
With vaccina on in place, opening up of economy and things designed for Dealer Principals and CEOs, the 2nd part of the
ge ng back to normal, FADA held its 300th Governing Council Series (designed for Sales and Marke ng people within our
mee ng in Phygital format. It was nice mee ng few of the dealerships) will be a comprehensive program via a series of 30
Governing Council Members in person a er almost a year. video sessions on how to best leverage digital to drive
profitability. It’s a good ini a ve from Google, ASDC and FADA
At our 300th Governing Council Mee ng, we invited Mr Deepak and I request you to register your sales and marke ng staff.
Jain, President ACMA to have an interac ve session with our Moreover, this program is absolutely free of cost.
members. I thank Mr Jain to be kind enough to accept my invite.
Mr Jain shared how Auto Component Industry visualises the FADA is also joining hands with ASDC in the RPL Project under
overall economy shaping up once again and thus, its impact on PMKVY 3.0. This is in recogni on of Prior learning. The
Auto. He also emphasised on one voice for Auto Industry and dealerships which agree to train its employee gets paid a small
suggested more collabora ons in future between ACMA & FADA. fee in return. On successful comple on of the course, the
Apprecia ng the work of FADA’s research wing he said industry employee is awarded with a cer ficate. It promotes good culture
looks forward to the reports published by FADA & requested as the employee is professionally trained in skill sets he requires
retail industry to keep its inventory level low. to build his career on. More details on the same will be shared at a
later date with all of you.
With things coming back to normalcy, FADA intends to begin
holding Vyapar Events in each State. Vyapar not only helps to Friends, India will be celebra ng its 75 year of Independence in
build synergies amongst dealers but is a pla orm for open, 2022. The Government of India is celebra ng [email protected] for the
transparent discussions on various issues/concerns & for sharing en re year from 15 Aug’21 ll 15 Aug’22. This is a path
best prac ses. We will share more detail on the same soon with breaking ini a ve. It envisions how India should be in her 75
all of you. Do request your State Chairperson to organise a year of Independence and seeks to bring together all
Vyapar, if there has been no such event in your state ll date! stakeholders including the Industry, Government, Ins tu ons,
Community groups and individuals to translate the vision into a
By now you would have come to know that FADA will be reality. As India’s apex body of Automobile Retail, FADA cannot be
launching Dealer Sa sfac on Study in partnership with le behind. I hence request you to kindly share your views on
PremonAsia. This comprehensive study will make us understand what as an associa on should we do to contribute our 2 cents to
& quan fy dealer expecta ons from OEMs. Through this study, this whole ini a ve.
we will be able to iden fy gaps that impact OEM-Dealer
partnership across all key business aspects. We will also come to As we do more within our retail community and humanitarian
know how dealers foresee the evolving automo ve retail efforts in our society at large, our image from being a mere trader
business. We aim to release the final report by end of June’21. will soon change to one who cares and one who facilitates. This is
what we must all collaborate to achieve.
This is the first of the kind indigenous auto retail survey being
carried out at such a large scale and the results of which will be Before concluding and as always, I request you for your
looked forward to by OEMs, Investors, Financial & Insurance sugges ons and inputs in further strengthening FADA by wri ng
companies etc. Hence, when the team calls for your to me at [email protected] .
par cipa on, please par cipate and also encourage your dealer
friends to par cipate as it is Our Survey, represen ng Our Voice. Warm Regards,
Let’s help our voice in being heard!
Vinkesh Gula ,
FADA on 12th February, 2021 observed FADA Road Safety Day, a President FADA
small step to say ‘No to Road Accidents & Drive Safely’. Observing
Road Safety Day was to create awareness in our communi es and

fada.in | January 2021 F A D A Journal 5

India Economics

RBI MPC Review| Inflations & IIP has Positive &
Economic Surprise

Favourable growth infla on con nue being resilient. 2021, and to 4% by May 27, central government. To
projec ons Infla on has been tamed, at a 2021. RBI is also aiming at comply with the Basel III
much faster pace than was neutralizing the liquidity loss capital guidelines, the
RBI projects 10.5% growth for previously expected. Benign through more durable implementa on of the last
FY22. It expects the urban infla on lies ahead with RBI instruments. The previously tranche of capital
demand and contact- projec ng infla on at 5.2% in announced held to maturity conserva on buffer (CCB) of
intensive sectors to do well Q4FY21, 5-5.2% in H1FY22, (HTM) limits extension, which 0.625% was deferred un l
with the vaccina on drive in and 4.3% in Q3FY22. was ending on March 31, April 2020 and has now been
progress, while also be ng 2022, has now been extended extended un l April 2021.
big on Government’s efforts Fine-tuning of liquidity un l March 31, 2023. The
to revive investments in the con nues securi es acquired between This will lead to a minor
economy. While the capacity April 1, 2021 and March 31, breather for the banks which
u liza on has picked up to RBI has con nued to fine- 2022 will be included in this are near the statutory
63.3 in Q2FY21, private tune liquidity opera ons, category. borderline in terms of
investments con nue to be with phased CRR exemp on maintaining their overall
subdued. Agri and rural rollback, reinsta ng This will favourably assist the capital adequacy ra o,
economy is expected to borrowing of state and though most private banks
CRR to 3.5% by March 27,

Infla on Inches Up Further

Source: CEIC & FADA Research

6 F A D A Journal January 2021 | fada.in

India Economics

have adequate capital, and MoM to 10.6%, owing to of supply side shocks and ‘chemicals and products’
few PSU banks are already some correc on in Gold coupled with a plen ful at 7.2%. Labour intensive
raising more capital. prices and precious metals. harvest. manufacturing con nues to
Going forward, most struggle and remains in the
Core infla on remains s cky, components of core IIP moves back to expansion contrac onary zone.
food is on a sustainable infla on may con nue being Consumer goods grew by
downtrend s cky, with further push December’s IP print came in 3.1%, with both durables and
from up ck in commodity at 1% (vs -2.1 in Nov), with non-durables being in growth
Core infla on has remained prices. Food prices are on manufacturing moving back trajectory.
s cky at 5.6%, owing to sustainable downtrend, with to growth trajectory.
strong services infla on. a huge support from double Capital goods have grown by
Miscellaneous infla on digit bases. Vegetables Of the 23 manufacturing 60bps, a turnaround in capex
stands at 6.5%, as the final infla on has contracted by industries, 10 have shown and infra cycle should be
consumer con nues to bear 16% in January a er growth, led by ‘Motor Vehicles, watched at. Overall, the IIP 3
higher cost of services. contrac ng by 10% in trailers and semi trailers’ at Month Moving Average stays
However, ‘Personal care and December owing to easing 5.4%, ‘computer, electronic at 1%.
effects’ has eased by 110bps and op cal products’ at 18.9%

Trends in IIP and its Components

Source: CEIC & FADA Research

fada.in | January 2021 F A D A Journal 7

Auto Retail Registration

FADA Releases January’21 Vehicle Registration Data

Ÿ A er showing a one- me YoY growth in December, January registra ons once again fell by -9.66%.

Ÿ All categories except Tractor were in red. On a YoY basis, 2W, 3W, CV and PV fell by -8.78%, -51.31%, -25% and -4.46%.
Tractor con nued its upbeat momentum with a YoY growth of 11.14%.

Ÿ Non-availability of vehicles due to scarcity of semiconductors, a fading pent-up demand and recent price hikes coupled with
no fes vi es and auspicious days landed January registra ons in nega ve zone.

Ÿ While Dealer inventory for PV con nued to fall and came down in range of 10-15 days, 2W inventory stayed put at 30-35
days.

Ÿ Union Government’s announcement of scrappage policy (though voluntary) is in right direc on. The spend on
infrastructure projects like roads and public transport will help build trac on for commercial vehicles over a longer period
of me.

All-India Vehicle Registra on Data for January’21 with YoY Comparison

PASSENGER Two Three TRACTOR
Wheeler Wheeler
VEHICLE Jan’21 Jan’20
Jan’21 Jan’20 Jan’21 Jan’20 60,754 54,662
Jan’21 Jan’20 11,63,322 12,75,308 31,059 63,785
11.14%
2,81,666 2,94,817 - 8.78% - 51.31%

-4.46%

Commercial
Vehicle

Jan’21 Jan’20
55,835 74,439

- 24.99%

Light Commercial mEDIUM Commercial hEAVY Commercial oTHERS
Vehicle Vehicle Vehicle
Jan’21 Jan’20
Jan’21 Jan’20 Jan’21 Jan’20 Jan’21 Jan’20 3,626 2,975

34,464 48,014 3,466 4,038 14,279 19,412 21.88%

- 28.22% - 14.17% - 26.44% Source: FADA Research

8 F A D A Journal January 2021 | fada.in

Auto Retail Registration

OEM wise Market Share Data for the Month of January’21 with YoY comparison

Passenger Vehicle (PV)

OEM Name Jan'21 Market Share Jan’20 Market Share
(%), Jan’21 (%), Jan’20
MARUTI SUZUKI INDIA LTD 1,51,585 51.42%
HYUNDAI MOTOR INDIA LTD 1,38,690 49.24% 46,204 15.67%
TATA MOTORS LTD 16,611 5.63%
MAHINDRA & MAHINDRA LTD 48,250 17.13% 19,257 6.53%
KIA MOTORS INDIA PVT LTD 9,963 3.38%
RENAULT INDIA PVT LTD 23,267 8.26% 11,060 3.75%
HONDA CARS INDIA LTD 9,457 3.21%
TOYOTA KIRLOSKAR MOTOR PVT LTD 15,031 5.34% 9,456 3.21%
MG MOTOR INDIA PVT LTD 2,758 0.94%
FORD INDIA PVT LTD 14,470 5.14% 5,135 1.74%
SKODA AUTO VOLKSWAGEN INDIA PVT LTD 16 0.01%
NISSAN MOTOR INDIA PVT LTD 9,775 3.47% 2,157 0.73%
MERCEDES-BENZ INDIA PVT LTD 1,201 0.41%
BMW INDIA PVT LTD 8,703 3.09% 1,345 0.46%
FIAT INDIA AUTOMOBILES PVT LTD 883 0.30%
JAGUAR LAND ROVER INDIA LTD 8,372 2.97% 409 0.14%
VOLKSWAGEN AG/INDIA PVT LTD 3,011 1.02%
FORCE MOTORS LTD, A FIRODIA ENTERPRISE 3,366 1.20% 815 0.28%
VOLVO AUTO INDIA PVT LTD 194 0.07%
PORSCHE AG GERMANY 3,350 1.19% 48 0.02%
AUDI AG 421 0.14%
SKODA AUTO INDIA/AS PVT LTD 2,670 0.95% 1,660 0.56%
MERCEDES -BENZ AG 1 0.00%
ROLLS ROYCE 1,808 0.64% 2 0.00%
FERRARI INDIA PVT LTD 5 0.00%
BENTLEY MOTORS LTD 830 0.29% - 0.00%
AUTOMOBILI LAMBORGHINI S.P.A 3 0.00%
Others 703 0.25% 1,160 0.39%

439 0.16%

211 0.07%

209 0.07%

171 0.06%

109 0.04%

46 0.02%

45 0.02%

35 0.01%

29 0.01%

7 0.00%

3 0.00%

1 0.00%

1 0.00%

1,075 0.38%

Total 2,81,666 100.00% 2,94,817 100.00%

fada.in | January 2021 F A D A Journal 9

Auto Retail Registration

OEM wise Market Share Data for the Month of January’21 with YoY comparison

Two Wheeler (2W)

OEM Name Jan’21 Market Share Jan’20 Market Share
(%), Jan’21 (%), Jan’20
4,69,804 36.84%
HERO MOTOCORP LTD 3,96,074 34.05% 3,10,922 24.38%
1,83,372 14.38%
HONDA MOTORCYCLE AND SCOOTER INDIA (P) LTD 3,02,329 25.99% 1,53,195 12.01%
4.16%
TVS MOTOR COMPANY LTD 1,76,307 15.16% 53,038 3.94%
50,186 3.23%
BAJAJ AUTO LTD 1,30,735 11.24% 41,137 0.42%
0.31%
ROYAL-ENFIELD (UNIT OF EICHER LTD) 54,461 4.68% 5,329 0.02%
3,911 0.03%
SUZUKI MOTORCYCLE INDIA PVT LTD 46,611 4.01% 0.02%
303 0.01%
INDIA YAMAHA MOTOR PVT LTD 44,511 3.83% 372 0.02%
264 0.00%
PIAGGIO VEHICLES PVT LTD 4,511 0.39% 101 0.00%
258 0.24%
CLASSIC LEGENDS PVT LTD 2,285 0.20% 100.00%
35
BMW INDIA PVT LTD 351 0.03% 2 Market Share
(%), Jan’20
ADISHWAR AUTO RIDE INDIA PVT LTD 156 0.01% 3,079
12,75,308
INDIA KAWASAKI MOTORS PVT LTD 120 0.01%
Jan’20
TRIUMPH MOTORCYCLES (INDIA) PVT LTD 63 0.01%

H-D MOTOR COMPANY INDIA PVT LTD 27 0.00%

DUCATI INDIA PVT LTD 10 0.00%

DUCATI MOTOR HOLDING SPA - 0.00%

Others including EV 4,771 0.41%

Total 11,63,322 100.00%

Commercial Vehicle (CV)

OEM Name Jan’21 Market Share
(%), Jan’21

TATA MOTORS LTD 21,877 39.18% 31,028 41.68%
MAHINDRA & MAHINDRA LTD 13,673 24.49% 19,840 26.65%
ASHOK LEYLAND LTD 14.92% 10,364 13.92%
VE COMMERCIAL VEHICLES LTD 8,333
MARUTI SUZUKI INDIA LTD 3,192 5.72% 3,847 5.17%
DAIMLER INDIA COMMERCIAL VEHICLES PVT LTD 3,001 5.37% 2,924 3.93%
SML ISUZU LTD 1,127 2.02% 1,385 1.86%
FORCE MOTORS LTD, A FIRODIA ENTERPRISE 0.73% 0.72%
Others 409 0.61% 537 1.46%
339 6.96% 1,088 4.60%
3,884 3,426

Total 55,835 100.00% 74,439 100.00%

10 F A D A Journal January 2021 | fada.in

Auto Retail Registration

OEM wise Market Share Data for the Month of January’21 with YoY comparison

OEM Name Three-Wheeler (3W) Market Share Jan’20 Market Share
(%), Jan’21 (%), Jan’20
BAJABAJAJ AUTO LTD Jan'21 28,304
PIAGGIO VEHICLES PVT LTD 36.98% 11,899 44.37%
MAHINDRA & MAHINDRA LTD 11,486 17.28% 18.65%
ATUL AUTO LTD 5,366 4,290
TVS MOTOR COMPANY LTD 1,401 4.51% 3,476 6.73%
Others including EV 1,322 4.26% 1,062 5.45%
798 2.57% 14,754 1.66%
34.41% 23.13%
10,686

Total 31,059 100.00% 63,785 100.00%

OEM Name Tractor Market Share Jan’20 Market Share
(%), Jan’21 (%), Jan’20
MAHINDRA & MAHINDRA LTD (TRACTOR) Jan'21 22.18% 12,928 23.65%
MAHINDRA & MAHINDRA LTD (SWARAJ DIVISION) 16.81% 9,123 16.69%
INTERNATIONAL TRACTORS LTD 13,476 14.23% 6,563 12.01%
ESCORTS LIMITED (AGRI MACHINERY GROUP) 10,211 11.42% 6,208 11.36%
TAFE LTD 10.25% 6,249 11.43%
JOHN DEERE INDIA PVT LTD (TRACTOR DEVISION) 8,647 7.77% 4,246 7.77%
EICHER TRACTORS 6,941 6.31% 3,887 7.11%
CNH INDUSTRIAL (INDIA) PVT LTD 6,230 4.04% 2,005 3.67%
KUBOTA AGRICULTURAL MACHINERY INDIA PVT LTD 4,721 1.70% 814 1.49%
VST TILLERS TRACTORS LTD 3,831 0.85% 472 0.86%
FORCE MOTORS LTD, A FIRODIA ENTERPRISE 2,457 0.49% 280 0.51%
CAPTAIN TRACTORS PVT LTD 1,033 0.30% 195 0.36%
INDO FARM EQUIPMENT LTD 0.25% 168 0.31%
Others 517 3.39% 1,524 2.79%
Total 295
184 100.00% 54,662 100.00%
154
2,057

60,754

Source: FADA Research

Disclaimer:
1. The above numbers do not have figures from AP, MP, LD & TS as they are not yet on Vahan 4.
2. Vehicle Registra on Data has been collated as on 07.02.21 and in collabora on with Ministry of Road Transport & Highways, Government of India

and has been gathered from 1,273 out of 1,480 RTOs.
3. CV is subdivided in the following manner

a). LCV – Light Commercial Vehicle (incl. Passenger & Goods Vehicle)
b). MCV – Medium Commercial Vehicle (incl. Passenger & Goods Vehicle)
c). HCV – Heavy Commercial Vehicle (incl. Passenger & Goods Vehicle)
d). Others – Construc on Equipment Vehicles and others

fada.in | January 2021 F A D A Journal 11

FADA Research

Impact of Price Rise and Waiting Period on Automobile Sector

As the effects of the Global emission norms. The further Kia Motors has increased the intensified by the Covid-19-
Pandemic started to decline, increase in prices will offset the prices for models w.e.f Jan’21 induced na onal lockdown.
Automobile Manufacturers already sluggish demand for Seltos and Sonet SUVs from The lockdown had sent a
have recently increased prices growth and lead to a delay in January onwards. However, shockwave throughout the
of their vehicles across the recovery of the auto sector. there is no hike in prices of the auto industry, restraining
segments from Jan'21. The Carnival MPV, which has been consumer demand, and later,
price rise can be a ributed to The Automobile Manufacturers Kia’s least selling vehicle. The affec ng the sales.
growing input costs, rise in who have increased their price of KIA Sonet is expected
commodity prices especially prices include: to increase by up to INR 20K & Commodity Price Pressure:
steel, and fluctua ons in the INR 11K for Seltos. Whereas, Rise in prices of steel, copper,
exchange rate. India’s leading carmaker the price hike for TATA ranges aluminium, lead, and rubber
Maru Suzuki increased the from INR 5,500 to INR 25,500, has inched up higher in the
These price changes have prices across its range. The depending on the model, past month and has added to
helped the OEMs to improve hike in prices has been variant, and fuel type. Moreover, commodity price pressure for
their revenue as sales increased majorly dependent on the Renault has also increased its ancillaries which has further
post Jun'20. However since the models. The prices for Maru prices for its models by up to INR increased the prices of vehicles
beginning of 2021, the PVs have increased at an 28,000 in Jan’21. and hurt consumer demand.
increased prices have started average of 2.97% across
impac ng the consumers and segments. On the other hand, FACTORS IMPACTING THE Adverse Economic Climate:
their purchasing power. This is home-grown SUV maker PRICE RISE The choice made by auto
majorly due to automakers had Mahindra has also announced manufacturing companies
already observed a similar spike its new prices for its vehicles. Indian automakers have been concerning passing on higher
in prices due to the industry’s The price hike ranges from stressed for a long, whirling commodity prices onto the
transi on to stricter BS-VI INR 299 to INR 40,000 across first under the economic customers will lead to
the segments. slowdown, which in turn got reduc on in demand recovery

12 F A D A Journal January 2021 | fada.in

FADA Research

post-December 2020 though semi-conductors and its normalcy, but the price hike Renault, TATA, Mahindra, and
for a short period. inadequate supplies of cri cal has again led to a decline in many others are observing
produc on materials such as auto sales volume as a er huge wai ng period for their
Shortage of Steel and steel and other metals. showing a one- me YoY best-selling models.
Semiconductors: Supply- growth in December,
Demand mismatch con nues A decline in Auto Sales: It is January’21 registra ons once This is even resul ng in
to remain in the market even expected that customers will again fell by -9.66%. customers shi ing towards
a er the Indian automobile take around a month to adapt purchasing premium
industry tries to drive out of to the new price and things will Higher Wai ng Period for second-hand vehicles at a
the slowdown. This is mainly slowly normalize a er that. Vehicles: In India, OEMs such similar cost and speedy
due to the global shortage of Demand was steadily reaching as Maru Suzuki, Hyundai, delivery.

OEM Wise Average Wai ng Period of Top Selling Models, as on 15th Feb 2021

Source: FADA Research

Note: The Above Men oned wai ng period is applicable on all new bookings. Wai ng Period may differ on the basis of colour of the
vehicle or variant

Maru Suzuki Nexa Hyundai Renault TATA KIA Nissan M&M
Triber Kiger
Celerio Eeco Baleno S-Cross Creta Creta Tigor/ Nexon Sonet Seltos Magnite Magnite THAR THAR
(Base) (Top) Harrier (Base) (Top) (Conv. (Hard
Top) Top
Petrol)

fada.in | January 2021 F A D A Journal 13

FADA Research

OEM Wise Change in Price of Top Selling Models, as on 15th Feb 2021

Source: FADA Research

Note: Above Men oned Prices are of Ex-Showroom, Delhi and does not include any other costs.
(collated in the Month of Feb’21)

14 F A D A Journal January 2021 | fada.in

Demystifying GST

Union Budget 2021-22: Changing Landscape of GST Law

DR SANJIV AGARWAL The Union Budget for financial used for crackdown on GST associa ons etc.)
Chartered Accountant year 2021-22 has been laid in input tax credit, refund, and
M/s Agarwal Sanjiv & Parliament on 1st February, other frauds and to iden fy all • Simultaneously, similar
Company 2021 by the Finance Minister. those who are trying to game provision specified under
This is the first budget of the the system. Invoice and input Paragraph 7 of Schedule II
MS NEHA SOMANI new decade and the first amid tax credit matching is being to the CGST Act has been
Chartered Accountant COVID pandemic with focus on done wherein returns having omi ed. Aforesaid change
M/s Agarwal Sanjiv & unconven onal areas. The mismatch more than 10 has been made effec ve
Company Budget revolves around three percent or above a threshold w.e.f. 1st July 2017.
themes i.e., inspira onal India, are iden fied and pursued.
economic development and Significant policy level changes New condi on to avail Input
caring society. have also been made. GST rate Tax Credit (Clause 100 of
structure is also being Finance Bill, 2021)
The Budget made a statement deliberated so as to address
that of all the structural issues like inverted duty • New clause (aa) to sub-
reforms, the Goods and structure. sec on (2) of the sec on
Services Tax (GST) has been the 16 of the CGST Act, 2017
most historic in our country. Following are the major has been inserted to
The Goods and Services Tax changes proposed in the provide that input tax
has been gradually maturing Budget 2021-22 (Finance Bill, credit on invoice or debit
into a tax that has integrated 2021) note may be availed only
the country economically. It when the details of such
has consolidated numerous Scope of term ‘supply’ invoice or debit note have
taxes and cesses to one tax and enhanced (Clause 99 of been furnished by the
facilitated formaliza on of Finance Bill, 2021) supplier in the statement
economy. It has resulted in the of outward supplies and
efficiency gains in logis c and • New clause (aa) in sub- such details have been
transport sectors. The sec on (1) of Sec on 7 of communicated to the
turnaround me for trucks has the CGST Act, 2017 (Scope recipient of such invoice
witnessed a substan al of ‘supply’) has been or debit note.
reduc on to the tune of 20% inserted retrospec vely
due to aboli on of check posts with effect from the 1st • Reflec on of inward
in GST. The dreaded Inspector- July, 2017, so as to ensure invoices is GSTR-2B is
Raj has also vanished. levy of tax on ac vi es or being made as a mandatory
transac ons involving condi on for availing ITC
O n G ST, t h e b u d get supply of goods or under the GST law.
emphasized that simplifica on services by any person,
is ongoing. A simplified return other than an individual, GST Audit to be discon nued
shall be implemented which is to its members or (Clause 101 & 102 of Finance
under pilot run. It will make cons tuents or vice-versa, Bill, 2021)
return filing simple with for cash, deferred
features like SMS based filing payment or other • Sec on 35(5) is proposed
for nil return, return pre-filling, valuable considera on. to be omi ed so as to
improved input tax credit flow remove the mandatory
and overall simplifica on. • The person and its requirement of ge ng
Refund process has been members shall be deemed annual accounts audited
simplified and has been made to be separate en es and and the reconcilia on
fully automated with no transac ons between statement submi ed by
human interface. them shall be deemed to specified professionals.
take place from one
It is to be noted that deep data person to another • Sec on 44 on annual
analy cs and AI tools are being (applicable to clubs, return is proposed to be
subs tuted by a new
sec on so as to:

fada.in | January 2021 F A D A Journal 15

Demystifying GST

- Remove the mandatory the tax which is paid by provisionally any property prescribed me limits
requirement of debi ng the electronic including bank account under Foreign Exchange
furnishing a cash ledger. belonging to taxable Management Act, 1999
reconcilia on person (in manner as (FEMA) for export of
statement duly audited • This will be effec ve prescribed). goods to entail return of
by specified retrospec vely w.e.f. refund amount along-with
professionals. 1.7.2017 implying that • The proposed applicable interest.
department will have to amendment provides that
- Provide for filing of forego such demands provisional a achment Other Changes
annual return on self raised ll now and shall remain valid for the
cer fica on basis. interest will only be en re period star ng from • Seizure and confisca on
payable on tax liability the ini a on of any of goods / conveyances in
- Empower the payable in cash. proceeding under Chapter transit to be a separate
Commissioner to XII, Chapter XIV or Chapter proceeding for recovery of
exempt any class of Scope of self-assessed tax XV ll the expiry of a tax (sec on 74).
taxpayers from filing of expanded (Clause 105 of period of one year from
annual return. Finance Bill, 2021) the date of order made • De-linking of proceedings
thereunder. u/s 129 and u/s 130
• These changes will come • An explana on to sub- rela ng to deten on /
into effect from a no fied sec on (12) of sec on 75 • Now a er enactment of seizure / release of goods /
date a er enactment of of the CGST Act has been Finance Bill, such conveyances in transit and
Finance Bill, 2021 (may be inserted to clarify that a achment could be done confisca on of goods /
FY 2021-22 and onwards). “self-assessed tax” shall from the ini a on of conveyances & levy of
include the tax payable in proceedings stage itself. penalty (sec on 129 and
• Such amendment will be respect of outward 130).
prospec ve and not supplies, the details of • Such a achment can be of
retrospec ve. which have been property belonging to • Jurisdic onal
furnished under sec on taxable person or any Commissioner
• The present provisions 37, but not included in the specified person under empowered to call for
shall con nue to apply for return furnished under sec on 122(1A). informa on from any
financial year 2019-20 and sec on 39. person (sec on 151 and
2020-21. • However, this would be 168).
• Any tax difference applicable to proceedings
• It is, however, desirable to between the returns, could under Chapter XII, • Informa on gathered not
con nue to get GST audit / GSTR-3B vis-à-vis GSTR-1, XIV or XV of the Act. to be used for any
due diligence conducted may now be recovered proceedings without
on voluntary basis, given directly from the • This will be applicable giving an opportunity of
its inherent advantages to taxpayer without any from no fied date a er being heard to such
management /board/ show cause no ce u/s 74 enactment of Finance Bill. person (sec on 152).
statutory auditors and or 75 of the CGST Act.
others. Zero rated supplies / SEZ Epilogue
Provisional a achment supplies (Clause 114 of
Interest on net tax liability (Clause 106 of Finance Bill, Finance Bill, 2021) The aforemen oned changes
(Clause 103 of Finance Bill, 2021) and other amendments
2021) • Zero rated supplies made proposed in the Finance Bill,
• Presently, where during to special economic zone 2021 shall come into effect
• Sec on 50 of CGST Act, the pendency of any will now be restricted to from the date when the same
2017 provides for interest proceedings u/s 62, 63, supplies made for will be no fied in official
on delayed payment of 64, 67, 73 or 74, the authorized opera ons. gaze e, a er the enactment
tax. Commissioner of the of the Finance Bill, 2021.
opinion that for the • Only no fied class of Except the amendment
• Finance Bill, 2021 has purpose of protec ng the taxpayers or no fied class rela ng to payment of tax on
proposed to subs tute interest of Government of goods or services will be net cash liability and scope of
proviso to sec on 50(1) so revenue, it is necessary to eligible for zero rated supply (which are applicable
as to charge interest on do so, he may by order in supplies on payment of w.e.f. 1.7.2017), all other
net cash liability. wri ng, a ach integrated tax (IGST). proposals are prospec ve in
nature.
• Thus, interest shall be • Non-realiza on of sale
payable on that por on of proceeds within

16 F A D A Journal January 2021 | fada.in

FADA in News

FADA Initiates Annual Dealer Satisfaction Study

Federa on of Automobile Ÿ To iden fy how dealers with urban and rural balance. prac ces followed by
Dealers Associa ons (FADA), foresee the evolving We are excited to release the manufacturers in keeping a
the apex na onal body of automo ve retail final report by end of profitable and sustainable
Automobile Retail in India is business June’21. I am confident that dealer network.”
ini a ng Annual Dealer the survey will act as our
Sa sfac on Study in Ÿ To provide ac onable report card to manufacturers PremonAsia Founder and
associa on with insights that OEMs & and will enable to highlight CEO, Mr Rajeev Lochan said,
PremonAsia, a consumer- dealers can work together best prac ces as well as close “We are excited to partner
insight led consul ng & in enhancing their the gaps wherever possible!” FADA in offering 2021 Dealer
advisory firm based out of business partnership Sa sfac on Study, first of
Singapore. FADA Secretary Mr C S many new ini a ves
Commen ng on the Vigneshwar who heads this designed to serve the
This comprehensive study announcement of this study, project said, “This study business needs of the
will serve the following FADA President, Mr. Vinkesh comes at a crucial me when a u to m o ve s e c to r. T h e
objec ves: Gula said, “I am delighted to the industry is facing industry is emerging from
announce that FADA in unprecedented headwinds. one of the most challenging
Ÿ To understand & quan fy partnership with PremonAsia This is the first large scale
dealer expecta ons from has ini ated the most in- study that is done for the mes witnessed in the recent
OEMs depth study which we are dealers, by the dealers and history. The idea of this study
going to take in next few from the Dealers is not just to examine the
Ÿ To measure how OEMs months. With a sizable Associa on to see how drivers of a successful OEM-
perform in mee ng or do sample, FADA – DSS will manufacturers are Dealer business partnership,
they exceed dealer provide adequate suppor ng their dealership but to go deeper in exploring
expecta ons representa on from every networks. We intend to how the future of
quarter and cu ng across all deep dive into every aspect automo ve retail business is
Ÿ To iden fy gaps that categories of vehicles. The of dealership management likely to evolve in the new
impact OEM-Dealer study will also have a good and to highlight the best post-COVID world.”
partnership across all key demographic mix coupled
business aspects

fada.in | January 2021 F A D A Journal 17

FADA in News

FADA Celebrates Road Safety Day on 12 February 2021

THE KEY OTOURROAHD ASANFEDTYS

IS IN

These certificates are presented to

15,000⁺ FADA Volunteers

F3A6DAFKAeDralAaJRoeugrinoanlalJDaniurearcyto20r2-1Mr|Safnadtah.oinsh S Valsalam Flagging Off the
Road Safety Rally at Trivandrum

18 F A D A Journal January 2021 | fada.in

FADA in News

FADA President - Mr Vinkesh Gula , CEO - Mr Saharsh Damani and other
Staff Members took Road Safety Pledge

United Automobiles, Prayagraj

FADA Kerala Regional Director - Mr Santhosh S Valsalam Flagging Off the
Road SafReatlyasRaMlloytaotrsT,rRivaainpdurrum

fada.in | January 2021 F A D A Journal 19

FADA in News

Saisha Motors Pvt Ltd, Jaipur
Innova ve Honda, Ahmedabad

FADA Odisha Chapter

Anamallais Toyota, Erode BADA, Bhopal
20 F A D A Journal January 2021 | fada.in

FADA in News

FADA’s 300 Governing Council Meeting on 13 February 2021

FADA Odisha Chairperson - Mr Pradeep Agarwal felicitates
FADA President - Mr Vinkesh Gula

FADA Odisha Chairperson - Mr Pradeep Agarwal felicitates
FADA CEO - Mr Saharsh Damani

fada.in | January 2021 F A D A Journal 21

FADA in News

The Hindu Business Line

The Economic Times

The Financial Express Sakshi The Financial Express Business Standard

Business Standard - Hindi Amar Ujala

22 F A D A Journal January 2021 | fada.in

FADA in News

Eenadu

The Hindu

Viran Vaibhav

Hindustan Times Ananda Bazar Patrika Rashtriye Sahara

Dharitri Swadesh
Business Remedies
Andhra Yug Pradesh
Prabha
fada.in | January 2021 F A D A Journal 23

Govt. Notification

CG-DL-E-28122020-223970
EXTRAORDINARY

PART II—Sec on 3—Sub-sec on (I)

PUBLISHED BY AUTHORITY

NEW DELHI, MONDAY, DECEMBER 28, 2020/PAUSHA 7, 1942

MINISTRY OF ROAD TRANSPORT AND HIGHWAYS

NOTIFICATION
New Delhi, the 28th December, 2020

G.S.R. 797(E).—The following dra rules further amend the Central Motor Vehicles Rules, 1989, which the Central Government
proposes to make in exercise of the powers conferred by Sec ons 110(1), of the Motor Vehicles Act, 1988 (59 of 1988). This
no fica on is hereby published, as required by sub-sec on (1) of Sec on 212 of the said Act for informa on of all persons likely to be
affected thereby and no ce is hereby given that the said dra rules shall be taken into considera on a er the expiry of a period of
thirty days from the date on which the copies of this no fica on, as published in the Gaze e of India, are made available to the public.

Objec ons or sugges ons, if any, may be sent to the Joint Secretary (MVL, Transport, Toll), Ministry of Road Transport and Highways,
Transport Bhawan, Parliament Street, New Delhi-110 001, Email: [email protected]

Any objec ons or sugges ons which may be received from any person with respect to the said dra rules before the expiry of the
period aforesaid will be considered by the Central Government;

Dra Rules

1. Short tle and commencement.—(1) These rules may be called as the Central Motor Vehicles (……………Amendment) Rules,
2020.

(2) Save as otherwise provided in these rules, they shall come into force on the date of their final publica on in the
Official Gaze e.

2. In the Central Motor Vehicles Rules, 1989 (herein a er referred as the said rules) -

A er sub-rule (9) of Rule 125 the following sub-rule shall be inserted, namely:-

“(9A) Notwithstanding anything contained in Sub rule (9), vehicles manufactured on and a er 01st Day of April 2021, in the case of
new models, and 01st day of June 2021, in the case of exis ng models, shall be fi ed with airbag for the person occupying the front
seat, other than the driver. The requirement for such airbag shall be as per AIS 145, as amended from me to me, ll the
corresponding Bureau of Indian Standards (BIS) specifica ons are no fied under the Bureau of Indian Standards act, 2016 (11 of
2016).”

[F. No. RT-11028/16/2016-MVL]

Note : AMIT VARADAN, Jt. Secy.

The principal rules were published in the Gaze e of India, Extraordinary, Part-II, Sec on 3, Sub-sec on (I), vide no fica on
number G.S.R. 889(E), dated the 16th September, 2020 and lastly amended vide No fica on number …….. Dated………….

24 F A D A Journal January 2021 | fada.in

Perspective

Automotive Retail 2030

Evolution of dealerships and potential new roles in retail EY

Automo ve retail faces digitaliza on and disrup on. Dealers look to adopt new opera ng models and upskill
salesforce or risk irrelevance.

T h i s p o i nt o f v i e w i s • Even with the ongoing virtual and augmented • N e w p r o d u c t s a n d

discussing the future of transforma on, the role reality, etc.) to customer technologies require the

automo ve retail in 2030 and of tradi onal dealerships data analy cs, remote upskilling of the exis ng

to discuss the key forces at as a link between the servicing and predic ve salesforce and the

play, and the steps that original equipment maintenance - the way introduc on of new roles

dealerships should take to manufacturer (OEM) and vehicles are purchased, to augment customer
experience throughout
meet the needs of customers the customer is not likely distributed and serviced is the purchase journey.
Consequently, hiring
and to remain relevant and to diminish. Meanwhile, changingdrama cally. efforts at dealerships
need recalibra on as the
compe ve. reduc on in the number salesforce will con nue to
of visits to dealerships has • O n l i n e p r e s e n c e i s play a cri cal role and be a
The key observa ons are: increasingly becoming key d i ffe re n ato r.
• The pace of change across made the ini al visit even Achieving this
cri cal to a ract first- me transforma on in
more crucial while also automo ve retail requires
all industries is customers. However, it a concerted effort from
accelera ng. Automo ve increasing the prominence con nues to be a blind dealerships. Clearly,
of sales personnel.
dealerships are facing spot for tradi onal
disrup on from mul ple • Digitaliza on is the prime
driver of change in the dealers as most of them

direc ons: evolving vehicle distribu on do not intend to increase

mobility solu ons, industry, impac ng online presence.

intensifying compe on, Whereas, select OEMs,

product innova on, everything from customer cap ves and brokers are dealers need to undertake

technology prolifera on, acquisi on and vehicle offering sophis cated significant change

stringent regula ons and delivery to a ersales. From portals capable of management to catch up

changing customer point of sale via digital tools performing en re with the evolving mobility

preferences. (3-D screens, media walls, customer journeys online. ecosystem.

fada.in | January 2021 F A D A Journal 25

Perspective

These emerging trends are causing automo ve retailers to rethink their current business models and undergo
significant transforma on in order to remain relevant and viable over the next decade.

Accelera ng pace of disrup ve innova on and changing customer preferences will drive the shi in the way
automo ve retail and a ersales businesses operate

Product innovation Transforming customer
experience
Shift toward alternate
powertrain, increasing The new mobility ecosystem
penetration of connected comprises varied customer
vehicles and possible groups with divergent
introduction of autonomous needs, necessitating the
vehicles will bring in a need to have an omnichannel
different set of opportunities brand management strategy
and challenges for that ensures a consistent
dealerships. customer experience across
all channels.

Digitalization across the Digitalization across the
value chain value chain

Role of digital will intensify Role of digital will intensify
as technology proliferates as technology proliferates
and the retail industry and the retail industry
continues to enhance continues to enhance
customer experience for customer experience for
new as well as used cars. new as well as used cars.

Evolving mobility Evolving mobility
preferences preferences

Shared mobility operating Shared mobility operating
models are eliminating the models are eliminating the
need to own a vehicle. The need to own a vehicle. The
challenge is how dealerships challenge is how dealerships
deliver returns in an deliver returns in an
ecosystem where profits will ecosystem where profits will
be determined by access to be determined by access to
data and miles travelled, data and miles travelled,
instead of units sold. instead of units sold.

26 F A D A Journal January 2021 | fada.in

Perspective

Tradi onal dealerships con nue to be important with first visits being the most crucial and sales personnel playing
a prominent role.

Tradi onal dealerships con nue to be the leading sales channel for customers.

Automo ve retail is undergoing a significant transforma on Most OEMs lack the necessary people, processes, technology
with increasing digitaliza on, evolu on of mobility-as-a-service and, most importantly, the seller mindset to make the shi from
and with OEMs taking an even larger role in managing the a wholesaler to a retailer. Further, a majority of the customers
customer journey and experience. This, however, does not prefer visi ng a dealership to take a test drive and conclude the
dilute the role that a dealership plays — linking the OEM and vehicle purchase. Dealerships remain cri cal for customers, as
the customer. evidenced by the EY survey.

27% 58%

New car buyers consider dealership Respondents say they will choose a
and salespeople as crucial criteria traditional dealership over other
followed by price and brand. channels to buy a car even in 2025.

Preference toward traditional dealers differ within age groups:

49% vs. 66%

of over 30-year-olds of over 50-year-olds

would select traditional dealers as the preferred sales channel in 2025.

The first visit to the dealership is crucial for the customer purchase decision and the sales representa ve
plays a cri cal role.

Dealers need to ac vely increase their online presence and op mize their efforts 70%
on tradi onal marke ng channels.
New car buyers who intend to buy
Digitaliza on has reduced the need to contact the dealer in the first instance. from the dealer they first visit
Customers are able to quickly interact and easily access informa on across media
and devices. Over me, the average number of customer visits to dealers before 2.1
buying a car has dropped considerably, as most customers now visit the
dealership only to close the vehicle purchase. Average number of dealers a new car
buyer visits

Dealerships need to focus on impar ng new skills and exploring crea on of new roles to align with the
changing industry dynamics.

Sales representa ves hold prominence for not only closing sales with willing 80%
customers but also persuading unwilling customers. Lack of social skills in a
salesperson is the biggest barrier to successful sales, followed by brand image 4 out of 5 customers buy from the first salesperson
and price. While visi ng a dealership, customers consider service orienta on and they come into contact with (in-person, online or
exper se of the salesperson as most cri cal. The salesforce needs the relevant on-call)
skillset to stay impac ul.

fada.in | January 2021 F A D A Journal 27

Perspective

Dealerships need to embrace digitaliza on and create a holis c digital and social media strategy covering the en re
customer purchase journey.

Introducing digital would help in both enhancing and understanding the customer experience journey.

Online visibility is cri cal to a ract first- me customers. However, most dealers do not plan to invest in increasing their
However, it con nues to be a blind spot for dealers. Consumers’ presence online.
approach to purchasing vehicles has changed completely over
the last decade. Internet and social media are now the first >80%
source of informa on. While a customer presently prefers to
purchase a vehicle offline, a large part of the purchase journey Dealers who do not plan
is already digital. to expand online presence
by 2020

80% Tradi onal marke ng con nues to be vital as it requires less
cogni ve effort to process than the digital feed. Dealers spend a
Customers who research about the significant amount to acquire customers; however, most mes
vehicle online there is a wide gap between the dealer’s percep on of their
current ini a ves and the actual customer experience.
~10
78% 2/3rd
Hours spent on the web by customers
for product and dealership Dealerships that Customers who
information
regularly organize consider these
>50%
events to acquire events as
Customers who receive offers online uninteresting
customers

Data analy cs can reduce such inefficiencies by driving fact-
based decision-making. Analy cs can support interven ons
across the customer life cycle. It will not only define and iden fy
the poten al of different customer segments, but also support
acquisi on of new customers, and improve customer
experience and loyalty quo ent. To op mize data analy cs,
dealers need to employ an integrated data management
strategy managed by a data scien st. It will break silos across
the organiza on and aggregate customer data from mul ple
sources such as CRM, dealer management systems, third-party
sources, etc., to a single pla orm.

While some of the OEMs, cap ves, brokers or special concept companies are excelling at the online
purchase journey, dealers have not aligned resources in this direc on yet.

Today’s technology permits implemen ng the en re customer Ÿ Considera on phase: provides the customer an interac ve
journey online, offering a faster and easier buying process while 3-D view, 360-degree videos and a virtual reality
also enhancing trust and quality. Below are some of the best-in- experience; allows comparison of vehicle financing
class features exhibited by leading online vehicle sales portals: products and booking test drives, including “bring” services.

Ÿ Informa on phase: enhances the customer experience with Ÿ • Purchase phase: provides flexibility and access to reserve
digital tools to help select a product based on select a vehicle online (without any charges or with short-term
requirements while providing product and sales process online credit), allows for virtual documenta on with e-
informa on via different channels such as videos, chats and signature, provides preferred mode of car delivery with
texts. real- me status.

28 F A D A Journal January 2021 | fada.in

Perspective

Information Consideration Purchase

Stock locator with Online credit Car delivery
delivery estimates check
Internet finance
Trade-in valuation Product information calculator

Online vehicle
reservation

Online

Sales process Special edition car eSignature or
information for online sales online contract

Product finder Online test Online payment
drive planner

Online ID check

Offline Assure multiple brand touch points — can be switched from online to dealership, or vice versa in any phase

Relevant factors for online processes from the customer perspective: Easy Fast Trust and Quality

We believe that vehicle financing will con nue to hold dominance in customer life cycle and could move to the front, providing
informa on on affordability, upgrades and subscrip on op ons.

This new job por olio works for divergent customer groups while ensuring a seamless customer experience across
all channels.

Customer Consultation Vehicle Conclusion Vehicle Vehicle or Diagnostics Complaints
acquisition (vehicle testing (evaluation financing solution and warranty and
(first contact) and offer) delivery
configuration) replacements

Digital to physical lead specialist 1

Creative director 2 5
Greeter 2.0 3
Mobility solution adviser
OE expert 4
Sales consultant expert
6 78

Assistant to experts 9
10
Customer data scientist 11

Infotainment advisor

Project manager
Remote service and predictive
maintenance expert

Customer touch point Running at backend, not customer facing

fada.in | January 2021 F A D A Journal 29

Business Achievers

Big Play

Vijay Shekhar Sharma
Founder & CEO, PayTm

Dreaming big is what Vijay passionately
believes in. Small wonder then that “Go big or
go home,” is the poster right at the entrance of
Paytm’s corporate office in Delhi.

Paytm, viewed as the Avant- for Pay Through Mobile, one of college at the age of 15, again several other products like
garde of cashback plan of the fastest growing e- far ahead of his age. Vijay and pandit, oc2ps, Oorja, etc.
ac on in India, has become an commerce websites and most his friends co-founded a
undisputed pioneer in the popular online des na ons for company in college itself which Rise
space of Mobile installments, prepaid mobile & DTH provided services to internet-
E-wallets, and E-business just recharges and shopping. Vijay based companies. Within a A er comple ng his college
to give some examples. The is a young & dynamic business year’s me, they saw success and selling off his company,
ini a on of the organiza on stalwart who is extremely and had a turnover of Rs. 50 Vijay also went on to work for
was done in the year 2010 by a posi ve and is an inspira on to Lakhs which they sold to a US- almost two years for
visionary graduate of Delhi the young genera on. based entrepreneur and companies like RiverRun
College of Engineering Mr. started working there in 1999. So ware Group (Business
Vijay Shekhar Sharma. He is is a Early Life Development), Intersolu ons
young and dynamic business Entrepreneurship India Pvt Ltd (Technical Team),
stalwart who is extremely Born and brought up in a small India Today Group Online
posi ve and is an inspira on to town of Aligarh, U ar Pradesh; The road to success consists of (Technical Head), and lastly
the young genera on. he has risen high to become many barriers and so did his; Startec Global Systems, India
the Founder of the $1.5 billion his journey to success was not (Chief Technical Officer). While
“I knew I would build a PayTM. The ini al days were easy and had many ups and he was working he realized
company and a product that not as tough for Vijay as he is downs; and now, not only does that job was something which
would be useful to people and blessed with a suppor ve and he hold the ownership of was not meant for him and
stand out in the market,” said encouraging family. He was the India’s most successful wanted to something of his
Vijay Shekhar Sharma founder topper of his school and internet business, but is also own which made him quit his
One97 Communica ons which finished his schooling two the Founder of One97 job. A er leaving his job he was
incubated PayTM- an acronym years before the rest and got Communica ons, which is the s ll le with deciding on what
admissions to the engineering parent company of Paytm, and exactly he wanted to do. So he

30 F A D A Journal January 2021 | fada.in

researched and a er a lot of Comeback Business Achievers
brainstorming, he realized that
many internet-based The crea on of PayTM proved fada.in | January 2021 F A D A Journal 31
companies were not able to to be an unbelievable step for
make money and suffered a the company. It changed the
loss out of it and the mobile game of the company, it all
industry had a lot of poten als began when One97, with the
and was an upcoming one. help of a 4-member team
designed and launched their
Therefore, without was ng any first-ever mobile commerce
further me, with the money pla orm in August 2009. But
that was le with him from the this me they wanted to be
sale of his earlier business, and very careful and avoid any sort
along with his friend and of mistake. So a er a lot of trial
colleague, Rajiv Shukla, Vijay & errors, they launched –
started One97 “www.paytmonline.com” in
Communica ons Ltd in 2000. It the month of August of 2010.
delivers mobile content and
commerce services to millions PayTM short for Pay “Through
of mobile consumers through Mobile” incubated by One97 in
India’s most widely deployed the most simplified terms was
telecom applica ons cloud nothing but a medium through
pla orm. which anybody could recharge
or pay majorly all their bills.
One97 was one of the first VAS The best advantage that the
companies to offer services life company had was that it didn’t
Astrology services, Music have to rely on venture
Messaging on mobiles, SMS capitalists for funds and could
based applica ons & just walk up to its father a.k.a.
businesses, ringtones, caller- One97 for it.
tunes, games, contests, similar
services on landlines, etc. In the As the mes were changing
span of a few years; On97 and so was the market, PayTM
became the favourite of every also was forced to change its
kind of business which required strategies. They used several
mobile content to be promoted. marke ng strategies that were
unique and bold. They
Fall launched mul ple radio ads,
released many offers and
Times were changing and the schemes for the users, and
Indian market was now ini ated net banking. They also
becoming more mature and launched first of its kind toll-
had also adapted well with the free number “1800-1800-
use of mobile services. The 1234” for recharges followed
internet market was also by PayTM mobile apps, etc.
booming and at the same me,
the VAS market was dropping As the company gained
dras cally which lead to a popularity they decided to
downfall in the business. But make a few more changes to
Vijay decided that before there the program which will help
is a major crisis they should them up to their game in the
change their course of ac on market, some of which included:
and to do something which is
bigger than all of that. Ÿ They added their first-ever
GPS-tracking system.

Business Achievers

Ÿ They also added NH-8 toll- ZAPR: – It is one of the world’s email labels and collaborate Dexetra: – It is a developing
card recharge, bus cket first media consump on from their inbox. smartphone applica on to
booking, income tax repositories and cross- augment human memory and
returns filing, and also re- targe ng pla orms. Milaap: – It is a crowd-funding create a new dimension for
launched they're earlier pla orm for causes and allows self-discovery.
called GamesPind under Grexit: – It is so ware individuals and ins tu ons to
Paytm Games. facilita ng email collabora on make a difference to the cause TheMobileGamer (TMG): – It
by allowing users to share they care for. provides emerging markets,
Ÿ Launching of money wallets including South East Asia and
was a major change. These India with mobile social
wallets could store money & gaming technologies.
customers could pay from it.
LeapSky Wireless: – It is a
With all these amazing Singapore-based company
changes PayTM grew rapidly that provides 3G/Wi-Fi-based
and was now the largest digital mobile data services.
e-commerce company in India.
It has become the most CIQUAL: – It offers Session
preferred mode of payment Insight, a system that delivers a
across leading consumer real- me, dynamic view of
internet companies. mobile broadband service and
user experience.
JV and other investments
Jugnoo: – It is a hyperlocal
Over the period of years; Vijay, marketplace providing
On97 & PayTM collec vely everything on-demand
have made quite a few
investments & acquisi ons, Plustxt: – It is a text messaging
some of which include: app op mized for Indian
languages and allows fast text
Sourceeasy: – It is a web messaging in any Indian
pla orm that enables language – as well as language
designers and brands to get keyboards. It was acquired by
their apparel manufactured One97 Communica ons in
and delivered to them. 2013.

Achievements

Ÿ Vijay Shekhar Sharma is
recognized among the
most innova ve CEOs of
2014 by Inc India (2015)

Ÿ Paytm Wallet gets the “Best
Digital Wallet Award” at
IAMAI’ India Digital Awards
(2015)

Ÿ PayTM gets recognized
among Delhi/NCR’s Top 50
Brands at a celebra on by
Paulwriter (2014)

Ÿ One97 features in Inc. India
Innova ve100 list (2013)

Ÿ PayTM was recognized as the
‘Most Innova ve Start-up of
the Year’ at the Entrepreneur
India event (2012).

32 F A D A Journal January 2021 | fada.in



Survey & Studies

Gen Z Consumers Start to Shape Indian Credit Market
as They Become Increasingly Credit Active

Summary Genera on Z consumers understand their credit Although India had the
—those born in or a er behaviours by country, smallest percentage of credit
Ÿ Nearly 9 million Gen Z 1995—are becoming specifically observing ac ve Gen Z consumers of all
Indian consumers now increasingly credit-ac ve and origina ons, account the countries studied, in a
credit ac ve are helping fuel the growth of preferences and balances. country as populous as India,
the consumer credit market. 6% represents nearly 9 million
Ÿ Two-wheeler loans are the The percentage of the Indian consumers. Even among older
most popular credit The TransUnion study popula on that was classed as Indian genera ons, credit
product among Gen Z, explored the credit ac vity of Gen Z, ranging from age 0-24, par cipa on is rela vely low,
followed by consump on Genera on Z consumers (also was 44%, represen ng more as just 10% of the total adult
products such as consumer known as Gen Z) in emerging than 609 million people. The popula on is credit ac ve.
durables and credit cards credit markets including percentage of the popula on
India, Colombia and South that was Gen Z and over 18, “Gen Z is the first genera on of
Ÿ Credit-ac ve Gen Z Africa, as well as established and thus eligible to apply for digital na ves, and they have
consumers more likely to consumer credit markets credit, was 11%, almost 147 come to expect a seamless
be in near prime and prime including Canada, Hong Kong million people. The consumer experience across
risk bands than wider and the United States. The TransUnion study revealed all walks of life – including how
popula on study explored the that only 6% of this eligible they access, use and manage
depersonalized credit data of group were credit ac ve credit,” said Abhay Kelkar, vice
Key Findings Gen Z consumers globally to nearly 9 million people. president of research and

Research released by
TransUnion shows that India’s

34 F A D A Journal January 2021 | fada.in

Survey & Studies

consul ng for TransUnion necessary way to get to work.” are most likely to be used to For Gen Z, credit card
CIBIL. “Our belief is that the buy a smartphone, personal par cipa on is growing, but
desire for credit among this Consumer durables loans are computer or laptop, or even a remains low compared to the
genera on is significant and usually used by the broader television, rather than wider na onal average.
growing at a faster pace than popula on to finance large household appliances like Looking at the en re adult
any other genera on. As well, refrigerators or washing popula on in India, overall
the way they apply for and use cket purchases. However, as machines o en preferred by credit card penetra on among
credit will likely generate an the second most popular older genera ons. credit-ac ve consumers is
even greater level of demand. consumer credit product
Our study shows it is cri cal for among Gen Z consumers, they
lenders to have the ability to
make more informed decisions
on prospec ve customers,
including those who are new to
credit and have limited or no
formal credit histories, and
earn their trust as well as their
business.”

Gen Z Consumer Credit Usage

The majority (80%) of Indian
Gen Z consumers who are
credit-ac ve only have one
open credit product. The most
commonly held products are
two-wheeler loans (21%),
consumer durables loans
(13%), and credit cards (11%).

The percentage of credit-
ac ve consumers with two-
wheeler loans is higher among
Gen Z consumers than any
other genera on. In
comparison, the percentage of
credit-ac ve Millennials
(consumers born between
1980 and 1994) with two-
wheeler loans is less than half
that of Gen Z at just 10%, and
for Gen X (consumers born
between 1965 and 1979) the
figure is even smaller at 6%.

Kelkar observed: “The
popularity of two-wheeler
loans among Gen Z consumers
in India is a reflec on of where
this genera on is in its career
earnings and wider credit
journey. For most, they are
unable to afford a car, and
having a motorbike or scooter
is a convenient and o en

fada.in | January 2021 F A D A Journal 35

Survey & Studies

21%. While 11% of Indian Gen and India was no excep on.
Z credit-ac ve consumers with
a credit card is fairly low Compared to the overall credit
compared to other countries in ac ve popula on in India, Gen
the study (Hong Kong and Z consumers are more likely to
Canada have rates above 90%), be near prime or prime, and
it’s encouraging for lenders overall just over half (51%)
that the youngest genera on is have credit scores in the prime
adop ng cards early in their and above risk ers.
credit life.
Interna onal Comparisons
For Indian Gen Z consumers,
origina ons (the rate at which According to the study, there is
new accounts are being a rela vely large divide in how
opened) are growing fastest in Gen Z approaches credit in
the consump on lending emerging versus established
categories. Looking at year- credit markets. While in most
over-year growth in established markets more than
origina ons in Q2 2019, credit half of Gen Z are already credit
cards grew 150%, consumer ac ve, the percentages drop
durables 113%, and personal precipitously for emerging
loans 95%. Personal loans and markets.
credit cards are o en used to
finance living expenses and “In emerging markets, lenders
make smaller- cket purchases. may be more conserva ve
In the personal loans space with extending tradi onal
especially, the prevalence of credit products to Gen Z, as
non-banking financial those consumers may not yet
companies (NBFCs) and the have the credit histories and
rapid growth of FinTech track records those lenders use
lenders has accelerated the to assess and manage risk,”
availability and ease of said Kelkar. “We have seen that
applica on for this par cular the use of expanded data sets
credit product. and advanced analy c
techniques can help lenders
Risk Distribu on be er understand the risk
profiles of these younger
A common myth is that all (or borrowers and iden fy ways to
at least the vast majority) of engage them in a mutually
Gen Z consumers are in the profitable manner. Lenders
sub-prime credit er because that incorporate trended
they have fewer open credit credit and alterna ve data can
products and don’t have long gain a be er understanding of
histories of posi ve credit the specific risk profiles of Gen
repayment. There is also the Z and as a result, are broadly
assump on that new-to-credit able to provide more
consumers receive lower consumers with access to
limits, driving higher u liza on tradi onal credit products.
and nega vely impac ng their The ability to ensure each
credit scores. consumer is reliably and safely
represented in the
However, the TransUnion marketplace will be cri cal for
global study found that in all companies that want to
markets, the majority of Gen Z engage this increasingly
consumers are not subprime, important market segment.”

36 F A D A Journal January 2021 | fada.in

Union Budget 2021

Make in India 2021: Budget Impact on Automobile Sector

fada.in | January 2021 F A D A Journal 37

Union Budget 2021

IMPACT ON AUTO SECTOR & AUTO ANCILLARIES

COMMERCIAL VEHICLES The enhanced focus of the Union Government on
infrastructure development augurs well for demand for
PROPOSALS construc on equipment, including commercial vehicles.
Addi onally, introduc on of the voluntary vehicle
• Voluntary vehicle scrapping policy to be introduced scrapping policy will augur well for replacement demand in
CVs.
• Capital outlay towards infrastructure increased by
34.5% to Rs. 5.54 lakh crore However, the details with respect to incen ves, implement
ac on plan etc. are awaited. The Government’s steps to
• Na onal Highway corridors of 11,000 km to be enhance public transporta on infrastructure through
completed by March 2022; alloca ons towards alloca on of Rs. 18,000 crore towards procurement of
mul ple other economic corridors in various states like 20,000 buses under the PPP model also augur well for
Kerala, Tamil Nadu, West Bengal and Assam reviving the bus segment sales, which had been
significantly impacted post the pandemic.
• Alloca on of Rs. 18,000 crore towards augmenta on
of public bus transport services through the PPP
model

• Alloca on of Rs. 2,217 crore towards urban centres;
to support bus replacement programmes of SRTUs

TRACTORS & TWO-WHEELERS The Union Government con nued with its ini a ves
towards promo ng rural development and farmer
PROPOSALS welfare in the Budget. Healthy alloca ons towards
various ongoing farmer welfare schemes (irriga on,
• Ins tu onal farm credit target enhanced to Rs. 16.5 crop insurance, rural employment, farm credit etc.)
lakh crore would help in reducing the exposure of the agricultural
sector to the vagaries of monsoon over a medium term.
• Enhanced outlay towards procurement under the
minimum support price structure(es mated outlay of Addi onally, the assured income support for farmers is
Rs. 75,060 crore and Rs. 1,72,752 crore towards likely to aid in mely procurement of key crop inputs
procurement of wheat and paddy, respec vely) (seeds, fer lisers etc.) and aid in relieving distress in the
farmer community to an extent.
• Alloca on under MNREGA increased to Rs. 73,000
crore for FY2022, to aid rural employment; revised ICRA believes that the above announcements are
es mate of Rs. 1,15,000 crore for FY2021 favourable for suppor ng demand for agriculture
equipment including tractors as well as the two-wheeler
• Alloca on of Rs. 19,468 crore for Interest Subsidy for segment, which rely considerably on rural prospects. In
Short Term Credit to Farmers addi on, a stable tax regime for individuals and
enhanced alloca ons for MSMEs, infrastructure and
• Con nued focus on rural infrastructure development; manufacturing sector also augur well for employment
alloca on of Rs. 11,588 crore for the Pradhan Mantri genera on and demand.
Krishi Sinchai Yojana, Rs. 15,000 crore for the Pradhan
Mantri Gram Sadak Yojana, Rs. 27,500 crore for the
Pradhan Mantri Awas Yojana and Rs. 30,000 crore for
the Rural Infrastructure Development Fund

• Assured income support (up to Rs. 6,000/annum for
each household) to farmers under the Pradhan Mantri
Kisan Samman Nidhi; Budgeted outlay of Rs. 65,000
crore

38 F A D A Journal January 2021 | fada.in

Union Budget 2021

IMPACT ON AUTO SECTOR & AUTO ANCILLARIES

ROADS FY2022 is a crucial year for two reasons: a) the importance
of Government spending on infrastructure to revive the
PROPOSALS economy and b) the significant catch up required in the
ongoing Bharatmala and allied programmes. Against this
• Significant increase in capital outlay for the Ministry backdrop, the massive 32% increase in the budgetary
of Road Transport & Highways - 35% increase to Rs. alloca on on capital spend for the MoRTH to Rs. 1,08,230
1,98,230 crore in BEFY2022 from Rs. 1,46,975 crore in crore in BE FY2022 bodes well for the road sector.
BEFY2021 and 26% higher than RE FY2021 of Rs.
1,57,053 crore In line with ICRA's expecta ons, the Government relaxed the
fiscal deficit targets to meet the huge funding requirements
• Alloca ons to the Pradhan Mantri Gram Sadak Yojana for produc ve asse t crea on, failing which both the
(PMGSY) reduced to Rs. 15,000 crore in BE FY2022 Bharatmala and the NIP could have been jeopardized.
from Rs. 19,500 crore in BE FY2021; however, it is
higher than Rs. 13, 706 crore in RE FY2021 Availability of long term infrastructure financing con nues
to remain a challenge given the twin problems faced by
• Borrowing target for the NHAI set at Rs. 65,000 crore in commercial banks asset liability mismatch and increase in
FY2022 (in line with FY2021) and another Rs. 15,000 stressed assets. Hence, the se ng up of a new DFI with an
crore to be raised through the NHAI’s SPV ini al alloca on of Rs. 20,000 crore is a posi ve. The DFI
would in turn be able to leverage and fund infra projects
• Mone sa on through NHAI InvIT and TOT es mated to worth around Rs. 2 lakh crore (assuming D/E of 9:1).
garner Rs. 10,000 crore in FY2022
The augmenta on of the GECL scheme for the MSME
• Fund worth Rs. 20,000 crore allocated to a new segment with an outlay of Rs. 10,000 crore (Rs. 4,000 crore
development finance ins tu on (DFI), which would in the current fiscal) and the PCGS (Rs. 1,000 crore), coupled
enable the GoI to leverage and fund infra projects with the relaxa on in the threshold under the SARFAESI
worth Rs. 2 lakh crore Act, augurs well for the non banking financial company (N
BFC sector). Also, the se ng up of an ARC/AMC to buy
NBFC stressed loans could benefit NBFCs, especially in the
wholesale segment.
PROPOSALS
In line with the GoI s vision of boos ng investment in the
• Proposal to set up a professionally managed infrastructure space, the Budget proposes the se ng up of
development financial ins tu on (DFI) for a DFI. As the por olio of this en ty is expected to scale up
infrastructure financing to Rs. 5 lakh crore over the next 3 years, regular capital
infusions would be crucial apart from the proposed capital
• Reduc on in minimum loan size eligible for debt investment of Rs. 20,000 crore by the GoI in the next fiscal.
recovery under SARFAESI Act, 2002 to Rs. 20 lakh from Further, allowing NBF CIDFs to issue zero coupon
Rs. 50 lakh debentures would help widen their investor/lender base.
The above ini a ves would facilitate long term financing to
• Proposal to set up permanent ins tu onal framework NBFCs lending to the infrastructure segment.
for corporate bond market

• Allowing infrastructure debt funds (IDFs) to issue tax-
efficient Zero-Coupon Bonds

• Addi onal deduc on of up to Rs. 1.5 lakh permi ed for
interest paid on loans borrowed up to March 31, 2022
for purchase of an affordable house

• Alloca on for Par al Credit Guarantee Scheme (PCGS)
doubled to Rs. 1,000 crore

• Alloca on for Guaranteed Emergency Credit Line
(GECL) for micro, small & medium enterprises (MSMEs)
significantly higher at Rs. 10,000 crore.

fada.in | January 2021 F A D A Journal 39

Automotive Technology

Rethinking How Cars Are Built—with Modern Consumers in Mind

Blame it on smartphones. primarily independently, and almost as o en as hardware. It entails reorien ng
Consumers are so consumers did not expect smartphones. research to what consumers
accustomed to ge ng new vehicles to change much from want and bringing an
features through frequent year to year. To keep pace with consumer engineering workforce’s skills
so ware updates that they demand and to develop in line with what’s needed to
want upgrades for other things In the ensuing 20 years, integrated modular make those and other
to be just as fast and easy, though, cars have become components effec vely, changes.
including cars. That demand, highly so ware-driven, automakers must now take a
coupled with the fact that requiring mul ple different approach. They must Car makers have begun to
newer so ware-based components and so ware adopt systems engineering, an adopt some of these elements.
features can be refreshed systems to work together. interdisciplinary method for However, companies that
more o en than hardware, is Today’s cars have connected- designing and managing adopt all of them can gain a
rendering automakers’ car services such as internet- complex systems over their life major compe ve advantage
exis ng engineering based naviga on and cycles. Using systems in the form of lower costs and
opera ons passé. infotainment systems, and, like engineering to be er organize lower risk of problems that
smartphones, features that and run vehicle produc on result in recalls. Already today,
Two decades ago, car makers can be upgraded quickly based includes crea ng a product integrated electronic
realized that, in order to on consumer demand. With architecture with components and so ware
operate efficiently, they had to over-the-air firmware updates, interchangeable modules that features account for the lion’s
engineer cars as modular units in-vehicle infotainment (IVI) can be used to update share of automakers’ recalls.
with components that could systems can get updates so ware more o en than Without a wholesale change,
be used across their en re
por olio of vehicles. Under
this model, components such
as air suspension, brake
systems, and dashboard
displays debuted at the same

me, most o en on the latest
high-end models. In addi on
to being efficient, it let a
company maximize its capital
investment in factories and
tools. This model worked when
cars had predominantly
electro-mechanical parts,
most components worked

40 F A D A Journal January 2021 | fada.in

Automotive Technology

it’s easy to imagine the At the same me, however, car above, engineering opera ons given that they spend almost
problems ge ng worse as companies are grappling with must become more consumer- 50% their engineering budgets
companies add even more focused and collabora ve. on electronics and so ware
electronics to keep up with ghter engineering budgets. development.
both consumer demand and One of the biggest ba les is Many engineering
the push to get highly balancing spending on organiza ons s ll add features KEY STEPS FOR
automated self-driving components for the new simply because they’re IMPLEMENTING SYSTEMS
vehicles on the road by the end features that customers want technically possible—not ENGINEERING
of the next decade. with spending on updates for because consumers want
tradi onal modules. them. For example, some Adop ng a systems
AUTO ENGINEERING automakers sell all-wheel- engineering approach to auto
OPERATIONS FACE Meanwhile, problems with drive cars with torque produc on requires
MOUNTING PRESSURES electronics and so ware- vectoring, a performance transi oning to a different
based features are increasing. booster typically found on product architecture,
Car companies are naviga ng Through our work with clients, sports cars, even though BCG uncoupling hardware and
mul ple, o en compe ng, we have seen that up to 90% of research has shown that most so ware produc on melines,
trends that affect new car problems that occur while a drivers don’t even know what redoing the structure of the
features and how they are company is preparing to start it is. engineering organiza on, and
built. manufacturing a new model upda ng workforce skills—all
are related to electronics and Most automakers con nue to set against the backdrop of
BCG research shows that on so ware. In addi on, close to a maintain separate engineering be er research into the
average, 62% of buyers third of auto recalls could be teams for different features that consumers want
globally would pay up to addressed through over-the- components and so ware, and will pay for.
$5,000 more for a fully self- air so ware fixes, represen ng which leads to problems
driving car. (See Exhibit 1.) a poten al $6 billion savings, syncing up the systems and to Create a product architecture
according to ABI Research. miscommunica on between that allows for inter-
Consumer interest in ADAS work teams. The disconnects changeable modules. This
and connected features is Automakers already devote can also cause issues for ADAS type of architecture works on
reflected in the greater significant resources to features such as parking assist, the same principle as toy
amount of news media electronic components which are built on mul ple building blocks, such as Legos:
coverage of the technologies research and development, components, including the although some components
compared with coverage of and fixing problems with new car ’s central computer might be simple and others
tradi onal differen ators, systems could create more of a processor, sensors embedded complex, they all plug into the
such as engine size and trim drain. Today, electronic in side fenders, the backup same grid and work together
line. For example, natural- components account for about camera, and sonar warning regardless of when they were
language processing systems 35% of a car’s materials costs, a system. made. Consider the sensors
that use voice commands to share that is expected to that regulate lane-change or
control vehicle opera ons, increase to more than 50% by Finally, engineering personnel blind-spot monitoring
such as Apple’s Siri and 2030. By our es mates, for lack the digital skills that are systems, which are embedded
Amazon’s Alexa, have received example, a large automaker needed to reorient opera ons in a vehicle’s front, side, and
intense news coverage. with annual revenues of $70 to put customers first. rear bumpers and trim. If the
billion to $100 billion and a $4 Typically, these workers are sensors are built on a universal
Automakers also must add billion annual engineering able to assess vehicle product architecture, in a near-
new features that meet budget would spend up to $2 a ributes such as vehicle future scenario old
consumer interest in billion a year on R&D for dynamics, perform tests, and components could be replaced
connec vity and IVI systems. electric and electronic develop modular components. with new ones when the car’s
They must incorporate components and so ware. But only around 7% of owner brings it into the shop
autonomous-vehicle engineers at major for rou ne maintenance.
technology as well, because TODAY’S ENGINEERING automakers rate themselves as
almost one-quarter of all new FUNCTION IS NEITHER proficient in such areas as data We expect car makers to
cars will either be fully CONSUMER-FOCUSED NOR analy cs and programming, ini ally use universal product
autonomous or include at least COLLABORATIVE according to BCG analysis. This architectures to build new
some self-driving features by figure highlights a gap that vehicle models. In the future,
2035. In order to address the trends automakers will need to fix, they also could use the
and challenges outlined

fada.in | January 2021 F A D A Journal 41

Automotive Technology

architectures to add updated updates for such issues as bug features, automakers can exis ng module-based teams
hardware or other features to fixes and non-safety-related conduct quan ta ve and make the new members
exis ng cars, poten ally consumer-facing features consumer research to responsible for the specific
extending the vehicles’ could be implemented as determine the value of such a so ware features that are
lifespans. needed. feature—that is, the price that associated with those
a driver would pay for it. modules. (See Exhibit 2.) As
Develop separate melines Tier-one automo ve suppliers Determining value was easier part of this, automakers need
for upda ng hardware and also have begun separa ng when features were hardware- to set up protocols and
so ware. Once the product hardware and so ware based because the material communica ons channels to
architecture is in place, development. An ADAS cost was simpler to calculate. ensure that the teams and the
hardware and so ware supplier, for example, might But so ware-based features products they create come
updates can be uncoupled so have one team building might have value over and together properly. In addi on,
that electronics can be hardware and a second team above the material cost of they need to create new
upgraded at will, similar to the building the so ware producing them, such as quality-assurance tests for
way that smartphone makers recogni on algorithms that parking assist. making sure that over-the-air
update opera ng-system sync with the hardware but are feature updates work.
so ware independently from updated more o en. Automakers can use
introducing new devices. connected-car services to Teams responsible for specific
Some automakers are already Automakers that separate collect data on exis ng car features need autonomy to
using over-the-air updates to hardware and so ware owners’ driving habits and control their work. One way to
refresh naviga on-system updates to add new features to analyze the data to quan fy provide for that and to ensure
so ware regardless of when exis ng cars will also need to the features that exis ng that the finished product
new car models are introduced. add quality assurance systems drivers use the most. That delivers on expecta ons and
and tes ng procedures to informa on could help the goals is to adopt agile ways of
As part of this change, ensure that the new features company priori ze which new working. Agile is a process for
automakers are beginning to func on as they are intended. features to add on the basis of ge ng work done that uses
physically relocate the what future car owners might cross-func onal teams,
so ware that regulates Redirect product be willing to pay for. minimum viable products,
hardware programming and development with research. rapid updates, and frequent
updates. They are detaching As part of adop ng a systems Reorganize engineering feedback.
the various types of so ware engineering orienta on, organiza ons and update
from the devices that they run companies must refocus employee skills. To carry out Along with helping employees
and clustering them together engineering on the customer these changes, automakers adopt agile ways of working,
in central computer units. We in order to deliver features that need to restructure automakers need to provide
expect that automakers will consumers want and use. To engineering opera ons. They more of their engineering
need four to five years to fully balance what people want should add new teams to organiza ons with digital skills
adopt this new electrical and with the cost of offering those
electronic architecture, given
the high levels of funding and
prepara on involved.

Once the dissocia on from
hardware updates is complete,
so ware updates should occur
at designated points in a
vehicle’s life cycle. For
example, if a car maker expects
to produce a vehicle model for
five years with one midcycle
update, so ware updates
could take place twice a year
and coincide with the midcycle
hardware update. In addi on,

42 F A D A Journal January 2021 | fada.in

Automotive Technology

in areas such as model
development and so ware
tes ng. They also need to have
staff who know how to track
what car owners want and can
pick up on changing consumer
sen ments in order to adjust
what the company offers in a

mely manner.

These changes are systems engineering in one blocks to successfully adop ng more responsive to changing
fundamental to how cri cal consumer feature, such systems engineering, so it’s consumer demands and to
engineering operates, and as ADAS or IVI. Star ng small cri cal to get this right. keep up with the complexi es
could yield significant ensures that resources are that arise from building
economic benefits, so deployed for high-value Create procedures to ensure vehicles with more electric
companies must learn to opportuni es. It also ensures over-the-air features meet and electronic components.
manage the transforma on that the organiza on can regulatory standards.
themselves without relying manage the changes that Hardware modules for Some automakers and er-
on outside suppliers. Un l accompany adap ng to a new established driving func ons, one suppliers have already
they have developed way of working. such as braking, are governed adopted parts of a systems
sufficient in-house resources, by processes and procedures engineering approach to the
however, companies may Build a catalog of features and that ensure those modules produc on of new vehicles. To
want to team up with an func ons. Similar to crea ng a meet regulatory approvals. succeed, they must switch
outside partner to fill the gap. catalog of modular Similar processes and en rely to a pla orm-based
Ul mately, car companies components, map out a procedures for so ware-based architecture and unbundle
must bring this exper se in- catalog of features and features that can be updated component updates. They
house or seek partnerships func ons, and indicate how over the air, however, have yet must also op mize
with other automakers, they will be managed. The to be created. Un l they are, engineering for cross-team
though, since it will give them catalog should describe who automakers need to adopt collabora ons and hire or
an edge over compe tors that owns key features and their own guidelines to make retrain personnel so they have
are slower to complete their func ons and what measures sure that those features meet the right skills. For such a
own transforma on process. will be taken to make sure they technical & safety requirements. monumental shi to be
are consistent across the successful, these ac vi es
GETTING STARTED WITH company’s vehicle por olio. Because of smartphones, cannot be entrusted to a
SYSTEMS ENGINEERING consumers have become skunkworks project with a
Define the new organiza onal comfortable receiving few dozen people, a
Before they can apply systems model. To sync the opera ng-system so ware peripheral business unit, or a
engineering across their en re development of features and updates more o en than they joint venture with an outside
engineering organiza on, func ons with that of related buy new devices, a mindset partner—especially if the
automakers must make sure hardware modules, include that has recast their majority of engineers
they have the basics in place. precise direc ons for how the rela onships with other con nues doing things in the
work and responsibili es will things they use every day, tradi onal manner.
Lay the groundwork. Create a be assigned. Uncertain es including cars. Automakers Automakers that fail to go big
product architecture and a about who does what are must restructure their will risk being outrun by the
catalog of modular some of the biggest stumbling engineering opera ons to be compe on.
components, and then decide
how to decouple the refresh
cadence of hardware and
so ware components.

Start with cri cal features.
Before introducing it
throughout the en re
organiza on, first roll out

fada.in | January 2021 F A D A Journal 43

Competition Law

Competition Law Updates

G R Bhatia billion) without plant closures. Tencent refuted the The NCLAT, by way of its order
On the other hand, Fiat accusa ons in a statement dated 19.09.2018, set aside
Partner & Head Chrysler Automobiles CEO posted on its official WeChat the order of the CCI, primarily
Competition Law Practice Group Mike Manley, who will head account on 09.02.2021, sta ng on technical grounds of alleged
Luthra & Luthra Law Office Stellan s' key North American that the complaint alleging non-apprecia on of evidence
opera ons, has said that 40 an trust viola ons was a independently by the CCI and
Fiat Chrysler Automobiles percent of the carmaker's malicious publicity stunt to relying completely on the
& Peugeot S.A. Group expected synergies would detract a en on from the findings given in the DG's
merger into Stellan s come from convergence of lawsuit filed by them against inves ga on report. The CCI
concludes pla orms and powertrains and PATEO in September 2020 for: appealed the said decision of
from op mizing R&D the NCLAT, which is currently
On 16.01.2021, Fiat Chrysler investments, 35 percent from (I) accessing sensi ve data of pending before the SC for final
Automobiles and Peugeot S.A. savings on purchases, and WeChat users through their disposal.
formally merged into Stellan s another 7 percent from savings PATEO app, including their
N.V. It took over a year for the on sales opera ons and contact list and chat history Brazil an trust authority fines
Italian-American and French general expenses. without authorisa on from auto parts company execu ve
automakers to finalize the deal either the users or Tencent, pursuant to spare auto parts
announced in October 2019, Tencent faced with an trust thereby endangering driver cartel probe
during which the global complaint filed by Chinese safety, and; (ii) publicly
economy was upended by the smart vehicle technology marke ng its app using the On 03.02.2021, the
COVID-19 pandemic. supplier trademarks of WeChat, which Administra ve Council for
mislead users and partners. Economic Defense, Brazil
With Stellan s N.V. coming Smart vehicle technology The case is currently under (CADE) convicted and fined an
into existence, it will create an service provider Shanghai review by the SAMR. execu ve, Erwin Friedmann, at
auto group with combined PATEO and SAIC-GM-Wuling auto parts company KSPG
annual sales of around 8.1 Automobile have approached Supreme Court to adjudicate Automo ve, USD 18,000
million vehicles and deep China’s State Administra on on allega ons of resale price pursuant to the conclusion of
enough pockets to fund the for Market Regula on (SAMR), maintenance (RPM) against its inves ga on into a cartel in
shi to electric driving and alleging that tech giant Hyundai the Independent A ermarket
take on bigger rivals like the Tencent Holdings Ltd. has and Original Equipment
Toyota and Volkswagen Group. abused its dominant posi on Vide order dated 14.06.2017, Manufacturer markets for
in the messaging app market to the Compe on Commission spare auto parts including
Carlos Tavares, the CEO of limit the sales of PATEO’s of India (CCI), a er a detailed engine pistons, bearings,
Peugeot S.A., has stated that Internet of Vehicles products. analysis of the findings arrived cylinder sleeves, pins,
Stellan s can cut annual costs at by the Director General (DG) connec ng rods and piston
by over 5 billion euros (USD 6.1 PATEO offers voice recogni on in the inves ga on report had rings. The inves ga on was
features and other mobile held that Hyundai Motor India commenced in December
applica ons that rely on Ltd. had imposed ver cal 2017 following a leniency
Tencent’s all-in-one WeChat restraints of RPM and tying-in, applica on by German
app. Tencent allegedly issued a in viola on of Sec on 3(4)(e) autoparts maker Mahle, and
legal no ce to automakers [Resale Price Maintenance] the two defendant companies
including complainant SAIC- and Sec on 3(4)(a) [ e-in – KSPG and Federal-Mogul –
GM-Wuling in August 2020, arrangements] of the opted to se le the case for
reques ng them to Compe on Act, 2002 (Act). USD 5.3 million and USD
discon nue the use of related CCI also imposed a penalty of 467,000 respec vely, along
Internet of Vehicle so ware 87 crores on Hyundai. with entering into cease-and-
products supplied by PATEO. desist agreements.

44 F A D A Journal January 2021 | fada.in

Dealership Profitability

Why Dealerships Need To Improve
Their Customer Experience

The automo ve industry is in a would buy from dealerships value of your customers lane can be supplemented
transi onal state. who provide be er through repeat business. with new, intelligent tech
experiences compared to solu ons that can minimize
Consumer preferences have lower prices. This sta s c Customer Sa sfac on Leads wasted me, and in turn,
started evolving past the shows that value is a more to More Sales provide customers with
tradi onal dealership important factor than quality something that they expect
experience, which means it’s when consumers are selec ng It’s a chain reac on! from their dealerships.
more important than ever that their service providers. Even
dealerships meet their 97% of dealers agree that the High CSI scores lead to repeat By understanding – and
customers’ needs with a customer’s experience in the business, which leads to more catering to – these consumer
modernized touch. service department is sales revenues for your preferences, you can integrate
important to their dealership. dealership. Providing digital capabili es to enhance
From long wait mes resul ng excep onal service makes the customer experience at
in customer churn, to irrita ng Customers Aren’t Coming customers want to come back your service lane.
upselling tac cs, to inefficient Back For Service, But What If to your dealership. If you are
scheduling processes, there’s They Did? consistent, then these Introducing a Smarter Service
no shortage of improvements customers will con nue to use Lane For Your Dealership
to be made. A study stated that 70% of your services. As an added
vehicle consumers who bonus, there’s a chance that As customers are looking to
How Modernizing The Service purchased or leased from a they can share their posi ve save me and effort at their car
Lane Can Impact Your Business dealer did not return for experience with friends and dealership, some dealers offer
service in the past year, which family to poten ally generate a self-service kiosk that
The service lane represents is equivalent to $266 billion in new business for you as well. enhances their dealership
the best opportunity for annual lost revenue across all experience, and in turn, your
dealerships to deliver on the franchise dealers. As an industry, automo ve CSI score. This technology
modern expecta ons of sales could grow 24% if the allows customers to check-in
consumers. Understanding This is a huge opportunity for dealership experience for their appointment or enter
where to start begins with your business. improves. as a walk-in. Customers engage
knowing the most common with an interac ve touch
customer pain points. We know that consumers are The overarching lesson here is screen where they can input
willing to spend more for the that you should never be their customer informa on,
Customers Want Value, But experience. If you can provide complacent with your service including car make and model,
Dealerships Aren’t Providing It a posi ve, seamless dealership and always strive to make it a mileage and reason for their
and service lane experience, fast, easy and convenient visit.
A good experience at a then customers are going to process for customers. Each
dealership can drive repeat come back even if that means improvement can lead to more By mee ng the modern
business because the majority travelling further and spending sales for your business. demands of customers with a
of customers are willing to more. smarter service lane, you can
travel further and pay more for How to Enhance Your Service minimize their wait me and
be er service. Instead of lost revenues, you Lane get right to business.
are increasing the life me
In fact, 54% of consumers The modern dealership service

fada.in | January 2021 F A D A Journal 45

Consumer Case Studies

National Consumer Disputes Redressal Commission

JUSTICE PREM NARAIN 1. This present appeal has Rs.7,61,138 was sent vide its impugned order
PRESIDING MEMBER been filed against the a er giving a discount of dated 30.05.2018
judgment dated 30th Rs.2,59,695. This allowed the complaint
OSL Prestige Private May 2018 of the West communica on was and passed the following
Limited & Others - Bengal State Consumer done via e-mail on order:
Appellants Disputes Redressal 18.10.2016. A er
Commission, Kolkata receiving the objec on "The opposite par es
Versus ('the State Commission') from the complainant, are jointly and severally
in Complaint Case no. the opposite party again directed to take back the
Mr Naveen Nayyer – 952 of 2017. sent an e-mail dated present vehicle of the
Respondent 29.03.17 and confirmed complainant and to
2. The brief facts of the that they would bear replace the same with a
First Appeal No. 1287 of case are that the the cost of transmission new vehicle of same
2018 complainant purchased assembly replacement model and make, i.e,
Decided on 07/01/2020 a car BMW 7 Series from of Rs.5,52,564 only and BMW 740 LI Sedan
(Against the Order dated the appellant/ Opposite rest of the amount (Color Imperial Blue
30/05/2018 in Complaint party on 02.02.2012 for should be paid by the Metallic) within 45 days
No. 952/2017 of the State a sum of Rs.68,26,529 complainant. It is from the date;
Commission West Bengal) bearing registra on alleged by the
no.WB 06J/4999, with a complainant that the The opposite par es are
warranty of two years. opposite party started jointly and severally
During the warranty avoiding the directed to pay
period the car was complainant and a er compensa on of
func oning normally. several follow-ups the Rs.5,00,000 to the
On 15.09.2016 the opposite party informed complainant within 30
complainant brought that they could only days from the date
the car to the service provide the service if otherwise the amount
centre of the opposite the complainant pays shall carry interest @ 8%
party for regular for the service per annum from the date
servicing. The amoun ng to
technicians found out Rs.10,20,813 a er ll its realisa on;
certain defects in gear deduc ng cost of
box of the car. The Rs.5,52,564 which The opposite par es are
complainant le the according to the jointly and severally
said car with the service complainant was an directed to pay
centre of the opposite abnormal price. The Rs.10,000 as cost of
party. The opposite complainant alleged li ga on to the
party gave a service that the car in ques on complainant within 30
quote for R.10,20,813. was lying in the service days from the date
It was claimed by the centre of the opposite otherwise the amount
complainant that the party for approximately shall carry interest @ 8%
defect was a 126 days. Therea er the per annum from the date
manufacturing defect, complainant preferred a
therefore, he was not consumer complaint ll its realisa on".
required to make any against the opposite
payment to the party. 4. H e n c e t h e p r e s e n t
opposite par es. Later appeal.
on another quote of 3. The State Commission
5. H e a r d t h e l e a r n e d
counsel for the par es
and perused the record.
Learned counsel for the

46 F A D A Journal January 2021 | fada.in

Consumer Case Studies

appellant stated that the become six years old at out by the diagnosis argument, the learned
vehicle was purchased the me of passing of the which required counsel for the appellant
on 02.02.2012 and the order. In the complaint, replacement. The State has men oned the
warranty of the vehicle the complainant has Commission has taken following judgments:
was for two years and given date of purchase of this e-mail as admission
thus warranty expired in the car as 02.02.2012 of the fact that the Sushil Automobiles Pvt.
February 2014. A er the and then he has given the transmission system was Ltd., through its Manager
expiry of further two incident of bringing the faulty due to Shri Kamlesh Kumar Singh
years, in the year 2016, car to the appellant on manufacturing defect. vs Dr Birendra Narain
for the first me, the 15.09.2016. He has not The fact is that the Prasad and Ors.
complainant alleges given any account of the vehicle had run for four (Manu/CF/0076/2010);
some defects in the car vehicle during this period years and there can be
and the vehicle was as to whether any defect wear and tear in various Maru Udyog Ltd., vs
brought to the dealer/ was ever brought to the parts of the vehicle and
appellant on 15.09.2016. no ce of the appellant the same cannot be Susheel Kumar Gabgotra
The vehicle was from the date of treated as manufacturing
examined and it was purchase ll 15.09.2016, defect. The word and A n r.
found that there was though there were many "internally" has been
some defect in the gear services in between wrongly interpreted by (Manu/SC/1519/2016);
box of the car and the when the vehicle was the State Commission to
same was informed to brought to the appellant. mean defect from the C N Anantharam vs Fiat
the complainant and an The complainant has not very beginning and an India Ltd., and Ors.
es mate/ service quote filed any job cards in inherent defect whereas (Manu/SC/0970/2010);
was given for support of his claim. If no the normal meaning
Rs.10,20,813/- on complaint is seen in the should have been Lally Motors Ltd., vs M J S
26.09.2016. Later on, as car for about four years, assigned to this word to Virk and Ors.
a good will gesture, the how can the car be stated mean that inside there (Manu/CF/0326/2016);
appellant gave some to have manufacturing was defect in the gear
rebate and invoice/ defect. The State box. Classic Automobiles vs Lila
service quote was given Commission has relied Nand Mishra and Ors. -
for Rs.7.61,138/-. on an e-mail sent by the 7. It is further pointed out (Manu/CF/0086/2009);
However, the appellant dated by the learned counsel
complainant did not pay 18.10.2016 which reads that the responsibility to Toyota Kirloskar Motors P
any amount and filed the as under: prove the manufacturing Ltd., and Ors., vs Tirath
present consumer defect rests with the Singh Oberoi
complaint before the "Reference is made to complainant. Moreover, (Manu/CF/0727/2016)
State Commission being our telephonic an expert report is a must
Complaint Case no. 952 conversa on on date, for proving any 8. The learned counsel for
of 2017 on 21.12.2017 regarding the gear not manufacturing defect. In the appellant has further
alleging manufacturing engaging properly in the present case, no argued that the
defect in the car. It was your BMW bearing expert report has been appellant is only the
argued by the learned registra on no WB 06J submi ed by the dealer and not the
counsel for the appellant 4999. As already complainant and m a n u fa c t u re r. T h e
that once the warranty informed to you the therefore, he has not manufacturer has not
period was over, the transmission is internally been able to fulfil the been made a party in the
repair of the car could be faulty as found out by the requirement of proving complaint case. Once a
done on cost basis only. carried out diagnosis". manufacturing defect in manufacturing defect
The State Commission t h e ca r. T h e S tate was alleged in the
has wrongly passed the 6. It was communicated to Commission has not complaint, it was
order of replacement of the complainant that the examined this aspect at incumbent upon the
the car which has transmission was all. In support of his complainant to have
internally faulty as found made the manufacturer
as a party.

9. The learned counsel for
the appellant has further
argued that even if the
vehicle had been under

fada.in | January 2021 F A D A Journal 47

Consumer Case Studies

warranty and defect in there is no ques on of dated 18.10.2016 clearly therefore it was taken to
the transmission any rebate on good will states that the the dealer on many
assembly/ gear box was gesture. Clearly the transmission was occasions for repairs of
no ced or even treated quote was given which internally faulty and different kinds. Clearly,
as manufacturing defect, was highly inflated and requires replacement. this shows that the
the replacement of the same was reduced This clearly amounts to vehicle was not perfectly
defec ve part is only twice to the extent that admi ng that this was a in order and a defec ve
provided under warranty the final quote was less manufacturing defect. vehicle was supplied to
and replacement of the than 50% of the original the complainant by the
whole car is not allowed quote. In the last quote, 12. Learned counsel for the OPs. In support of his
rather only the defec ve the appellant has agreed respondent has further argument the learned
part of the car can be to bear the total cost for pointed out that in the counsel for the
replaced. In support of replacement of present case, the respondent has relied on
his asser on the learned transmission assembly/ appellant/ opposite party the following judgments.
counsel for the appellant gear box. This clearly did not appear before the
has relied upon the shows that internally the State Commission on Special Leave Pe on (C)
judgement of this appellant was sa sfied many dates and did not nos. 21178 -21180 of
Commission in RP no. that there was some file their wri en 2009decided on
2854 of 2014 tled manufacturing defect in statement in spite of 24.11.2010- C N
Hyundai Motor India the transmission on many opportuni es Anantharam vs Fiat India
Limited vs Surbhi Gupta assembly/ gear box. having been granted by Ltd and Ors.
and Ors. Decided on the State Commission. On
14.08.2014. 11. It was further submi ed the day of final hearing, Revision Pe on no.
by the learned counsel the counsel for the 1030 of 2008 decided on
10. On the other hand the for the respondent that appellant appeared and 03.12.2013 - Tata Motors
learned counsel for the there was no need for argued the case. Even on vs Rejesh Tyagi and HIM
respondent/ any expert report when that date there was no Motors Show Room - II
complainant states that the appellant has itself request from the learned RP no. 1445 and 1961 of
unfair trade prac ce on agreed a er diagnos c counsel for the opposite 2008 decided on
the part of the appellant inspec on of the car that par es for gran ng me 18.09.2013 - M/s
is clear from the very fact the transmission for filing the wri en Mandovi Motors Pvt.
that the appellant has assembly/ gear box was statement. If a party does Ltd., vs Pravenchandra
submi ed three service internally faulty and not file its defence the She y and Maru Udyog
quotes for the same job/ required replacement. forum is likely to take its Limited and Maru
defects. The first was As the vehicle could not view based on the Suzuki India Limited vs
submi ed on 26.09.2016 be used since 15.09.2016 complaint and other Pravenchandra She y
for Rs.10,20,813, the for 126 days, therefore, evidence available on the and Mandovi Motors Pvt.
second was submi ed on the complainant has record. Later on the party Ltd.
18.10.2016 for demanded cannot raise any
Rs.7,61,138 and the third compensa on @ objec on on the order of 13. I h a v e c a r e f u l l y
was submi ed on Rs.10,000 per day. The the forum. It was further considered the
29.03.2017 which was complainant did not stated by the learned arguments advanced by
the original amount agree to pay any repair counsel that the amount the learned counsel for
minus Rs.5.52 lakh. The charges for the defects in of Rs. 4.7 lakh has been both the par es and
argument of the learned the gear box as the same spent and paid to the examined the material
counsel for the appellant was a manufacturing appellant from the date of on record. I find force in
cannot be accepted that defect and the vehicle purchase ll 15.09.2016 the conten on of the
the appellant gave having manufacturing on different repairs and learned counsel for the
discount as a good will defect must be replaced other charges. Thus the appellant that a er
gesture. The appellant is by the dealer. The e-mail vehicle was giving trouble warranty if any
a commercial firm and of the opposite party right from the beginning component goes wrong,
the responsibility for its

48 F A D A Journal January 2021 | fada.in

Consumer Case Studies

repair or replacement vehicle repaired, therefore, no discussion, the appeal is
will be on the car owner. whereas in the normal manufacturing defect partly allowed and the
This vehicle has run circumstances, the can be a ributed to the order of the State
properly for four years vehicle should have vehicle. Thus, without Commission in respect of
and during this me given no trouble for a any manufacturing replacement of the
warranty expired. Had longer period of me. defect in the vehicle, the vehicle is set aside.
there been any order for replacement of Further the order of the
manufacturing defect, Moreover, the the vehicle a er so many State Commission in
the same would have complainant has suffered years is not jus fied, respect of award of
surfaced during these mental agony and therefore, the order of compensa on of Rs.5
four years. On the other harassment due to the the State Commission for lakh is modified to the
hand, it is true that for inflated quota on for the replacement of the extent that the appellant
such costly vehicle, the replacement/ repair of vehicle is liable to be set shall pay a sum of Rs.2.5
internal defect in the the gear box. No only this aside. lakh (rupees two lakh
gear box should not have the quota on were fi y thousand only) as
developed in the car in its changed two mes and So far as compensa on compensa on to the
fi h year of its running. during this period, the of Rs. 5 lakh granted by respondent/
However, no norms have vehicle remained the State Commission to complainant. This
been fixed for defects to unusable to the the complainant is amount will carry
develop in such cars. It detriment of the concerned, keeping interest @ 8% per annum
can only be taken that complainant. above factors in view, the from the date of the
there was defect in the same is reduced to Rs.2.5 order of the State
gear box which needed 14. The State Commission lakh to be paid by the Commission, i.e.,
to be repaired or has ordered replacement appellant/ OPs to the 30.05.2018 ll its
replaced. In totality the of the vehicle. As the respondent/ realisa on. Li ga on
complainant has suffered vehicle has already run complainant. cost of Rs.10,000 is
and he had to get his for about four years maintained.
without any trouble and 15. B a s e d o n t h e a b o ve

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 FADA
on retainership to help members deal with the complexi es of GST law and procedures. They will, on reference made by FADA,
guide and give opinion on various issues rela ng to GST as applicable to automobile dealers.

FADA 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 at
[email protected]).

Engagement of CMVR Consultant

CMVR consultant - Mr Hans Kumar, Retd Additional Commissioner, Transport Department, Rajasthan is with FADA on
retainership basis. He is an authority on CMVR Rules and is also approached by MoRTH.

FADA will forward members concern regarding CMVR Act & Rules to Mr Hans Kumar for clarification and suitable representation
,if any, to be made to the respective State Transport Authorities and to MoRTH where applicable. Members are requested to send
their queries at [email protected]

fada.in | January 2021 F A D A Journal 49

Membership

WE WELCOME OUR NEW

MEMBERS

No. Dealer Principal Name Dealership Name City State Franchise

1 Mr Suneel Vadlamudi Vihaan Auto Ventures Pvt Ltd Hyderabad Andhra Pradesh Kia Motors
Hyundai
2 Mr Shan Swarup Sharma Balaji Hyundai Auto Pvt Ltd Muzaffarpur Bihar M&M
Hero MotoCorp
3 Mr Aditya Raj Kiran Automobiles Pvt Ltd Patna Bihar Hyundai
Tata Motors (PCD)
4 Mr Manubhai N Patel Umiya Automobiles Mehsana Gujarat Hero MotoCorp
Mahindra Tractors
5 Mr Piyush D Desai Divine Motors Pvt Ltd Vapi Gujarat TAFE
Hero MotoCorp
6 Mr Manav Das Metro Motors Ambala Can Haryana JCB India
HMSI
7 Mr Narender Singh Krishna Enterprises Gohana Haryana Hero MotoCorp
Hero MotoCorp
8 Mr Deepak K Agrawal Bharat Tractors Gumla Jharkhand India Yamaha
TVS Motor
9 Mr Rajeev Kumar Bharat Agencies Ranchi Jharkhand Hero MotoCorp
Bajaj Auto
10 Mr Sumit K Sarawgi Bimal Motors Bengaluru Karnataka HMSI
HMSI
11 Mr Sunil R She y RNS Earthmovers Pvt Ltd Bengaluru Karnataka HMSI
Hero MotoCorp
12 Mr Sabir Bafakyh Adithya Enterprises Kozhikkode Kerala Hero MotoCorp
Hero MotoCorp
13 Mr Utkarsh Anand Anand Fab Auto Sales Service Chhatarpur Madhya Pradesh Volkswagen Cars
Maru Suzuki
14 Mr Oonmeet S Narang Sukhmani Automobiles Indore Madhya Pradesh Tata Motors (PCD)
Ford India
15 Mr Karan Kohli Tilakraj Motor Jabalpur Madhya Pradesh Bajaj Auto
TVS Motor
16 Mr Anuj Jejani Mercury Motors Nagpur Maharashtra

17 Mr Manish Saraogi Neelam Motors Pvt Ltd Balasore Odisha

18 Mr Amit Agrawal Chandan Trading Bargarh Odisha

19 Mr Roshan Agrawal Aashirwad Motors Bargarh Odisha

20 Mr Jagannath Das Das Motors Bhadrak Odisha

21 Mr Rakesh K Rout Tez Automobiles Jajpur Odisha

22 Mr Sunil Kumar Parida Sai Motors Jaleswar Odisha

23 Mr Ajit Kumar Jain Ajit Motors Rayagada Odisha

24 Mr Vineet Dua Dua Motors Rourkela Odisha

25 Mr Sudersan Jagadeesan Ramani Cars Pvt Ltd Coimbatore Tamil Nadu

26 Mr Ganesh Ranjan Pillai & Sons Motor Co. Thanjavur Tamil Nadu

27 Mr Abhishek Grover Grover Trade Links Pvt Ltd Bareilly U ar Pradesh

28 Mr Abhirup Khanna Sumpun Automobiles Pvt Ltd Kanpur U ar Pradesh

29 Mr Virendra K Singh Gandhi Auto Sales Pratapgarh U ar Pradesh

30 Mr Chyan Krishna Majumdar Rupsa Auto Mall Pvt Ltd Chakdaha West Bengal

50 F A D A Journal January 2021 | fada.in


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