Well I’m back after a long long lay off. Let me then start with one of the hottest topics in the Indian automotive scene. We all have been hit by the hike in fuel prices, which now occur more regularly then the monsoon hits our coast. So where does the poor common man run. His choices are:
1. Walk – Nah!
2. Use public transport – Do we have that in our cities? And where public transport does work, it seems to be hunting grounds for some fundamentalist psychopaths.
3. So, finally he is driven to the novel invention of one MR. Rudolf Diesel (now don’t tell me you can’t get the hint).
The stage seems to be well set then, for Bosch which has recently set up a 550 crore facility in Bangalore. The confidence that Bosch has in the diesel Indian market can be easily seen by the fact that the plant is geared up to produce 300,000 pumps a year, a quantum leap from the 40,000 it produces currently according to the present market demand.
And the initial signs are good. Maruti and M&M have already inked deals for different kinds of pumps that suit each company’s product’s requirements. Also Hyundai is in the foray and holding talks for using Bosch pumps in most of its products.
What further adds to the customer’s joy is that he will not only spend less on fuel, but also get the latest technology engines (well no one does it better than Bosch), cause less pollution and all this at a lower initial investment too. This is possible due to the high localization content in the Bosch products that help keep costs in check more than anything else.
So gone are the days when we used to associate diesel engine vehicles as noisy, uncomfortable, planet killing machines suited only to the rural environs. Instead now we’ll see them giving their petrol counterparts a tough time in any comparison whatsoever. So lets all just keep our fingers crossed as coming ahead are a flurry of great launches from all manufacturers (and some new too) in every price band and genres one can imagine.
Showing posts with label industry. Show all posts
Showing posts with label industry. Show all posts
Sunday, July 30, 2006
Tuesday, April 11, 2006
EXCISE DUTY CUT – HOW MUCH A BOON?
In the recent budget the finance ministry gave the automobile industry a gift by reducing excise duty by 8% (from 24 to 16), on all cars within 4000mm length and having engine capacity no more than 1200cc for petrol & 1500cc for diesel power trains. But is everything really as rosy as it looks? Well, look deeper and I think you’ll find some flaws in it. To know more read on.
Before we dwell deep I would like to make it clear that everyone knows the benefits here, that of small cars becoming more affordable for the common man, so I’ll leave it at that. Instead I’ll focus on the not so obvious side effects.
Firstly, this really plays into the hands of Maruti-Suzuki (partly owned by the state, so do I smell a rat here….. nah), as most of its models stand to get benefited. No wonder then, that Jagdish Khattar was all smiles after the budget was announced. But other manufacturers were not so enthusiastic. These were the reactions of three big wigs of Indian car industry:
“The industry has seen maximum growth in the mid-size car segment, with small-car buyers upgrading to bigger cars. With a segmented duty structure, the gap between a small car and a sedan becomes larger, making the up gradation that much more difficult for the customer.”
Rajive Saharia, GM, Sales & Marketing, Honda Siel
“A level playing field is essential to encourage global manufacturers to participate more actively in India. An excise duty reduction across the board would have been aligned with India’s globalisation actions.”
Arvind Mathew, MD, Ford India
“We can’t understand why there are two conditions-engine and length-for the differential excise duty. There are new technologies available which make higher displacement engines more fuel efficient so why have the engine cut-off?”Rajeev Chaba, MD, GM India
What the General Manager of Honda says above is true. This certainly is a time, when due to the boom in economy people are shifting up a ladder in respect to buying cars (read that as cars which occupy more real estate and have bigger engines). See the increase in sales of Swift/City/Fiesta as compared to the 800/Santro and you’ll realise it (and I’m certainly not referring to those exotic cars which don’t mean anything to you and me other than fancy bedroom posters maybe).
Also this is forcing manufacturers to rethink (or maybe redesign is the word here) their upcoming launches. To name a few (which are the most anticipated ones), Fiat’s Grande Punto (4030mm) and Ford’s Fusion (4018mm, though already launched) are agonisingly close but still out of the tax relief (ah…that hurts). The same goes for GM’s Aveo UV-A, but this time the culprit are its petrol engines (1400cc & 1600cc, and so their MD’s frustration about the engine limit). Everyone’s trying whatever is possible to make their cars to adhere to the so called ‘magic figures’ (call it the making of ‘Honey I Shrunk The Car’!!!). In the case of Fiat and Ford, modifications to the bumper might be able to do the job, but things are not so simple for the General (I guess one can’t shrink an engine that easily). Hence it seems that the Aveo UV-A will now be launched with a 1200cc, 70bhp engine instead. Not only does this delay the launch, but the Indian customer just might lose out on two good engines which people in other parts of the world get to relish.
Talking of engines, with today’s technology, cubic capacity is not as relevant as before (as has been aptly brought out by the MD, GM) . Why, a 2 litre hybrid engine is more fuel efficient and gives out lower emissions than a conventional 1.2 litre petrol unit. Look at the engines of City and Octavia, both of which return better ‘kmpl’ figures and are much more environment friendly than many of the cars having much smaller engines as compared to them (and they certainly are a pleasure to drive too).
So maybe the ministry has rushed through the decision and could have given it some more thought. One option would be to tax cars based on its emissions and fuel consumption, rather than size. Or maybe they could have increased the length restriction a little bit to at least take into account all upcoming basic hatchbacks.
In the end these are just my thoughts, and they certainly will vary from person to person. I would also like to bring out here that it is certainly a step in the right direction, and will bring cars within the reach of a much wider spectrum of people, only that maybe (just maybe) it could have been done in a slightly better way so as to benefit more people and encourage global companies to bring in new technologies into India. At the parting note I’ll request all of you who read it to please give it a thought and do write back to me about your views/ideas on it.
Before we dwell deep I would like to make it clear that everyone knows the benefits here, that of small cars becoming more affordable for the common man, so I’ll leave it at that. Instead I’ll focus on the not so obvious side effects.
Firstly, this really plays into the hands of Maruti-Suzuki (partly owned by the state, so do I smell a rat here….. nah), as most of its models stand to get benefited. No wonder then, that Jagdish Khattar was all smiles after the budget was announced. But other manufacturers were not so enthusiastic. These were the reactions of three big wigs of Indian car industry:
“The industry has seen maximum growth in the mid-size car segment, with small-car buyers upgrading to bigger cars. With a segmented duty structure, the gap between a small car and a sedan becomes larger, making the up gradation that much more difficult for the customer.”
Rajive Saharia, GM, Sales & Marketing, Honda Siel
“A level playing field is essential to encourage global manufacturers to participate more actively in India. An excise duty reduction across the board would have been aligned with India’s globalisation actions.”
Arvind Mathew, MD, Ford India
“We can’t understand why there are two conditions-engine and length-for the differential excise duty. There are new technologies available which make higher displacement engines more fuel efficient so why have the engine cut-off?”Rajeev Chaba, MD, GM India
What the General Manager of Honda says above is true. This certainly is a time, when due to the boom in economy people are shifting up a ladder in respect to buying cars (read that as cars which occupy more real estate and have bigger engines). See the increase in sales of Swift/City/Fiesta as compared to the 800/Santro and you’ll realise it (and I’m certainly not referring to those exotic cars which don’t mean anything to you and me other than fancy bedroom posters maybe).
Also this is forcing manufacturers to rethink (or maybe redesign is the word here) their upcoming launches. To name a few (which are the most anticipated ones), Fiat’s Grande Punto (4030mm) and Ford’s Fusion (4018mm, though already launched) are agonisingly close but still out of the tax relief (ah…that hurts). The same goes for GM’s Aveo UV-A, but this time the culprit are its petrol engines (1400cc & 1600cc, and so their MD’s frustration about the engine limit). Everyone’s trying whatever is possible to make their cars to adhere to the so called ‘magic figures’ (call it the making of ‘Honey I Shrunk The Car’!!!). In the case of Fiat and Ford, modifications to the bumper might be able to do the job, but things are not so simple for the General (I guess one can’t shrink an engine that easily). Hence it seems that the Aveo UV-A will now be launched with a 1200cc, 70bhp engine instead. Not only does this delay the launch, but the Indian customer just might lose out on two good engines which people in other parts of the world get to relish.
Talking of engines, with today’s technology, cubic capacity is not as relevant as before (as has been aptly brought out by the MD, GM) . Why, a 2 litre hybrid engine is more fuel efficient and gives out lower emissions than a conventional 1.2 litre petrol unit. Look at the engines of City and Octavia, both of which return better ‘kmpl’ figures and are much more environment friendly than many of the cars having much smaller engines as compared to them (and they certainly are a pleasure to drive too).
So maybe the ministry has rushed through the decision and could have given it some more thought. One option would be to tax cars based on its emissions and fuel consumption, rather than size. Or maybe they could have increased the length restriction a little bit to at least take into account all upcoming basic hatchbacks.
In the end these are just my thoughts, and they certainly will vary from person to person. I would also like to bring out here that it is certainly a step in the right direction, and will bring cars within the reach of a much wider spectrum of people, only that maybe (just maybe) it could have been done in a slightly better way so as to benefit more people and encourage global companies to bring in new technologies into India. At the parting note I’ll request all of you who read it to please give it a thought and do write back to me about your views/ideas on it.
Friday, March 24, 2006
INDIAN CAR HISTORY PART-II
In the early 80's, a series of liberal policy changes were announced marking another turning point for the automobile industry. The GOI entered the car business, with a 74% stake in Maruti Udyog Ltd (MUL), the joint venture with Suzuki Motors Ltd of Japan. The company entered in 1983 with a so-called "peoples" car and a more favourable policy framework.
MUL introduced 'Maruti 800' in 1983 providing a complete facelift to the Indian car industry. The car was launched as a "people’s car" with a price tag of Rs40,000. This changed the industry's profile dramatically. This car, which had a 800cc engine and the barest minimum that could make a car just about comfortable, holds the honour of actually bringing car to the common man in India and till not so long ago was the single largest selling car here. Boosted by this, second highest growth was recorded in 1985 at 42%yoy when Maruti had entered the market. In the very same year, the GOI announced its famous broad banding policy which gave new licenses to broad groups of automotive products like two and four-wheeled vehicles. Though a liberal move, the licensing system was still very much intact.
The de-licensing of auto industry in 1993 opened the gates to a virtual flood of international auto makers into the country with an idea to tap the large population base of 950mn people. As a result we saw many new manufacturers entering the market. First of the German giants to enter the country was Mercedes. With its exorbitant prices and impeccable quality, it soon went on to be looked upon as the pinnacle of automobile here, which was meant for only the select few to relish. Also came Peugeot, but failed miserably. Well, actually speaking, there was nothing wrong with the car as such, only that the market had not matured enough for an expensive (Rs. 5lacs was a huge sum then) sedan.
Another revolution was brought by 2 Korean and one local manufacturer. These were Hyundai, Daewoo and our very own Tata Motors (then TELCO). Hyundai’s Santro n Daewoo’s Matiz were a run away success. Though the Santro is still going great guns (also being exported out of here), Matiz went out with the fall of Daewoo in Korea (though its models now launched under the Chevrolet name by GM are doing pretty well). Tata has the honour of launching the first indigenous car, named Indica. This robust, low maintenance car, is today the best seller in the country.
Hyundai though, grew in leaps and bounds n today proudly stands as the second largest car manufacturer in the country, only behind Maruti Suzuki. This success can be attributed to the company’s constant upgrades, new launches and above all its endeavour to bring the latest technology into the country (long before other manufacturers even thought of it) and at a quite affordable price too. It pioneered technologies like CRDI, ABS, TCS, auto boxes etc. (of course not considering the Mercs who already had it since quite some time, but then how many people could own them?).
Since then the car scene seems to have gone into overdrive. The lifting of quantitative restrictions on imports by the recent policy is expected to add up to the flurry of foreign cars in to the country. Many companies have entered the car manufacturing sector, to tap the middle and premium end of car industry. The new entrants GM, Ford, Mitsubishi, Honda, Toyota, and Skoda entered the mid-sized car segment and Audi, Bentley, Volkswagen; Porsche is in the premium end of market. Though the exclusive brands r still fringe players and only few of them have assembly plants for CKDs, most taking the CBU route. But the mid size segment players have full fledged manufacturing plants here, n some even cater for exports.
As a result of all this, today we have cars ranging from Rs.2lac till Rs.5crore and cover all types of styles like hatchback, sedan, coupe, convertible, SUV, MUV etc. so something for everyone’s need, and considering the current economy growth trend (touch wood!) the only way from here is up. Now that certainly is music to everyone’s ears.
MUL introduced 'Maruti 800' in 1983 providing a complete facelift to the Indian car industry. The car was launched as a "people’s car" with a price tag of Rs40,000. This changed the industry's profile dramatically. This car, which had a 800cc engine and the barest minimum that could make a car just about comfortable, holds the honour of actually bringing car to the common man in India and till not so long ago was the single largest selling car here. Boosted by this, second highest growth was recorded in 1985 at 42%yoy when Maruti had entered the market. In the very same year, the GOI announced its famous broad banding policy which gave new licenses to broad groups of automotive products like two and four-wheeled vehicles. Though a liberal move, the licensing system was still very much intact.
The de-licensing of auto industry in 1993 opened the gates to a virtual flood of international auto makers into the country with an idea to tap the large population base of 950mn people. As a result we saw many new manufacturers entering the market. First of the German giants to enter the country was Mercedes. With its exorbitant prices and impeccable quality, it soon went on to be looked upon as the pinnacle of automobile here, which was meant for only the select few to relish. Also came Peugeot, but failed miserably. Well, actually speaking, there was nothing wrong with the car as such, only that the market had not matured enough for an expensive (Rs. 5lacs was a huge sum then) sedan.
Another revolution was brought by 2 Korean and one local manufacturer. These were Hyundai, Daewoo and our very own Tata Motors (then TELCO). Hyundai’s Santro n Daewoo’s Matiz were a run away success. Though the Santro is still going great guns (also being exported out of here), Matiz went out with the fall of Daewoo in Korea (though its models now launched under the Chevrolet name by GM are doing pretty well). Tata has the honour of launching the first indigenous car, named Indica. This robust, low maintenance car, is today the best seller in the country.
Hyundai though, grew in leaps and bounds n today proudly stands as the second largest car manufacturer in the country, only behind Maruti Suzuki. This success can be attributed to the company’s constant upgrades, new launches and above all its endeavour to bring the latest technology into the country (long before other manufacturers even thought of it) and at a quite affordable price too. It pioneered technologies like CRDI, ABS, TCS, auto boxes etc. (of course not considering the Mercs who already had it since quite some time, but then how many people could own them?).
Since then the car scene seems to have gone into overdrive. The lifting of quantitative restrictions on imports by the recent policy is expected to add up to the flurry of foreign cars in to the country. Many companies have entered the car manufacturing sector, to tap the middle and premium end of car industry. The new entrants GM, Ford, Mitsubishi, Honda, Toyota, and Skoda entered the mid-sized car segment and Audi, Bentley, Volkswagen; Porsche is in the premium end of market. Though the exclusive brands r still fringe players and only few of them have assembly plants for CKDs, most taking the CBU route. But the mid size segment players have full fledged manufacturing plants here, n some even cater for exports.
As a result of all this, today we have cars ranging from Rs.2lac till Rs.5crore and cover all types of styles like hatchback, sedan, coupe, convertible, SUV, MUV etc. so something for everyone’s need, and considering the current economy growth trend (touch wood!) the only way from here is up. Now that certainly is music to everyone’s ears.
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