Vehicle sales remain on the road to recovery in March

Source: Livemint, April 08, 2021

Retail sales of cars and utility vehicles continued to improve in March on the back of sustained improvement in economic activity, despite the surge in coronavirus cases, and a shift in customer preference towards personal mobility to avoid covid-19 infection. A low base effect also aided the growth in passenger vehicle sales during the last month of FY21.

Showroom sales of passenger vehicles increased by 10.11% on a month-on-month (m-o-m) basis to 279,745 units during March, according to sales data released by the Federation of Automobile Dealers Associations (Fada). Sales were also boosted by the long waiting period on popular products because of a demand-supply mismatch.

Retails of passenger vehicles increased by 28.39% from March last year, when sales came to a halt because of the lockdown measures imposed to contain the outbreak of the covid -19 pandemic. Operations had remained suspended till the beginning of May and in some cases early June.

Tractors and passenger vehicles were the only two categories that saw healthy double-digit growth and the lack of growth in other categories can be associated with multiple factors such as the low base of last year, transition from BS-IV to BS-VI norms and India going under total lockdown, according to Vinkesh Gulati, president, Fada.

“A global shortage of wafers, which is an input for making semiconductors, continued to linger around and kept the waiting period for passenger vehicles as high as seven months. According to a Fada survey, 47% of passenger vehicle dealers said they lost more than 20% sales because of supply side constraints,” Gulati said. Retails of commercial vehicles continue to show signs of a pick-up after more than two years, on the back of a faster recovery in economic activity, albeit on a low base. Showroom sales of commercial vehicles increased by 14.15% m-o-m to 63,372 units.

Detel plans to set up 150 sales outlets for EVs in North India this year

Source: The Economic Times, Mar 11, 2021

Homegrown brand Detel on Thursday said it plans to establish a network of 150 sales outlets in North India for its electric vehicle vertical by the end of this year. The company aims to strengthen its presence in the region with its newly launched range of electric two-wheelers, the company said in a statement.

The domestic EV manufacturer also plans to target sub-dealers apart from the primary dealers while expanding its footprints, it added.

With an aim to manufacture 100 per cent localised electric scooter components, Detel also plans to open an assembly unit in Gurugram to produce 1 lakh low-speed electric-vehicles per year.

“We are working furiously on our plans to open new dealership networks pan India. Our acquired dealerships will reinforce Detel’s mission to reach out to millions at the bottom of the pyramid with smart, sustainable, and affordable products,” Detel Founder Yogesh Bhatia said.

The objective of this exercise is to rapidly cover the key markets and to increase the sales and market share in the low-speed EV segment, he added.
Detel has been in the Indian market since 2017 with its electronic goods and consumer gadgets. In January 2020, the company entered the EV industry with a vision to facilitate Indian customers with smart EV vehicles.

Electric vehicle financing industry to be worth Rs 3.7 trn by 2030: Report

Source: Business Standard, Mar 09, 2021

New Delhi: India’s electric vehicle (EV) financing industry is projected to be worth Rs 3.7 lakh crore in 2030, about 80 per cent of the current retail vehicle finance industry, according to a new report.

The report titled ‘Mobilising Electric Vehicle Financing in India’, prepared by Niti Aayog and Rocky Mountain Institute (RMI) India pointed out end-users currently face several challenges, such as high interest rates, high insurance rates, and low loan-to-value ratios.

It said India’s transition to electric vehicles (EVs) will require a cumulative capital investment of USD 266 billion (Rs 19.7 lakh crore) in EVs, charging infrastructure, and batteries over the next decade.

The report also identified a toolkit of 10 solutions that financial institutions such as banks and non-banking financial companies (NBFCs), as well as the industry and government can adopt in catalysing the required capital.

“India’s electric vehicle (EV) financing industry is projected to be worth Rs 3.7 lakh crore in 2030-about 80 per cent of the current size of India’s retail vehicle finance industry, worth USD 60 billion (Rs 4.5 lakh crore) today,” the report said.

According to the report, the 10 solutions recommended include financial instruments such as priority-sector lending and interest-rate subvention.

Others are related to creating better partnerships between OEMs and financial institutions by providing product guarantees and warranties, it said.

Commenting on the report, Niti Aayog CEO Amitabh Kant said the need of the hour is to mobilise capital and finance towards EV assets and infrastructure. The report pointed out that investment in India’s transition to electric mobility has the potential to create significant economic, social, and environmental benefits for the country.

How a global semiconductor shortage is impacting Indian car makers

Source: The Hindu Business Line, Feb 18, 2021

Mumbai: Just as car makers were heaving a sigh with demand starting to pick up, a global shortage in semiconductors has spelled trouble for them — exerting pressure on production, apart from creating supply constraints and long waiting periods. Experts say that the challenges are likely to continue up until the first quarter of FY22.

An unprecedented surge in demand for electronics and personal computers amid the pandemic has resulted in a shortage of semiconductors, and this is likely to persist for a while as demand continues to remain high. Semiconductors are used in the electronic control units (ECU) of cars, especially premium passenger cars. Indian auto manufacturers import electronics and related systems worth nearly ₹30,000 crore, according to EY India.

“The big concern for the auto industry and Mahindra, and in fact for the world, is the semiconductor shortage. (It is) something that we’re very perplexed with, and something where the end is not clearly known as to when this fall will go away,” Pawan Goenka, MD and CEO of Mahindra & Mahindra, said during a press conference on the company’s Q3 results, on February 5.

This is while the demand for automobiles remains buoyant, with no sign of it slowing down, he had said. The semiconductor shortage is expected to be normalised only by June-July, Rajesh Jejurikar, Executive Director – Automotive & Farm Equipment Sector, M&M, had said then.

All major players in the passenger vehicle industry are witnessing pressure on production volume amid supply constraints due to this shortage, said Ashish Modani, Vice-President, ICRA Limited. Because of inadequate supplies and strong automotive demand, the waiting period has crossed six months for certain models/variants, he added.

Car companies had already undertaken a price hike in January due to the rise in input costs, and a further price hike would remain a key monitorable depending on the supply scenario of semiconductors, said Hetal Gandhi, Director, CRISIL Research.

“We have some impact due to short supply of semiconductor-related parts from this month onwards and therefore production adjustments are being done as much as possible so that we can reduce its impact on our customers and overall business,” said Rajesh Goel, Sr. Vice-President and Director, Honda Cars India Ltd. The company is engaging with its suppliers to take quick countermeasures, he added.

“Some Covid-19 related challenges in the supply chain, including a global shortage of automotive embedded electronics, continue to impact the industry. Tata Motors is taking appropriate measures with all of its affected suppliers to mitigate the impact to production.

These global industry challenges are likely to continue in FY22,” the company’s spokesperson said.

During Tata Motors’ press conference on its Q3 results on January 29, PB Balaji, CFO, Tata Motors, said that up until January, there has been no impact on the company due to the shortage of semiconductors. “Having said that, the risks are real and conversations are happening with all tier-1 and tier-2 suppliers and with the semiconductors industry as well to ensure that supplies continue…From a demand perspective, we are going very fast, and that’s also adding to the pressure that we have. This is something that is being managed on a live basis, and we will ensure that we do our best to minimise the impact.”

“This is a challenge, and you need a hell of a lot of firefighting to get through,” Balaji added.

Based on current conditions, the chip supply situation will remain tense during the first half of the year, according to ŠKODA Auto Volkswagen India Pvt Ltd.

“Demand forecasting and production planning become crucial for OEMs in current time, and the primary focus is on fast selling model/variants/colour to protect market share and maximise profitability,” said Modani.

The current semiconductor shortage will certainly revive with time, however, other similar disruptions may occur again, cautioned Yugesh Aglawe, Partner – Supply Chain, Business Consulting, EY India. “Automobile manufacturers should make use of rapid what-if scenario modelling capabilities that are available in modern day Intelligent digital planning solutions to assess such risks in advance. The ones who do this will mitigate their risks better and win more often in the market.” The extent of impact of the shortage of semiconductors depends on PV OEM’s product portfolio as well as supply chain robustness, noted Gandhi. “In this scenario, the microprocessor chip companies have decided to raise prices of semiconductors, and at the same time, undertake capital expenditure so as to set up capacities – expected to become operational from June-September 2021.”

Hyundai to invest $200 mn to build localised EVs for mass market in India

Source: Business Standard, Feb 17, 2021

New Delhi: South Korean auto major will invest a major share of its investment to strategise and produce an affordable electric vehicle for the Indian market.

The company is in talks with battery makers and suppliers to localise a large portion of manufacturing in order to bring the cost down and has earmarked $200 million investment for the purpose.

“We have the product and the technology, and we are reviewing the Indian market condition and the infrastructure situation here. We will come up with some options, which will be the best for the Indian market. It’s a No.1 priority in our future strategy,” Hyundai India’s managing director S S Kim said.

The carmaker’s understanding comes from its experience with its electric SUV Kona, which was launched in 2019. “We had launched the Kona but we understand that it was for the super-premium buyer. To have meaningful volume, we need to be present in the mass segment and we are working towards that,” said Tarun Garg, director, marketing and sales at Hyundai India. Garg refused to give a timeline for the launch.

Garg said that Hyundai in India intends to present itself as a solution to mobility rather than a company which only sells cars. The carmaker, which has completed 25 years in the country, has invested over $4 billion in the Indian market and has clocked over nine million vehicle sales since its arrival. It has a sales network of 1,154 dealerships and 1,298 after-sales workshops across the country.

Tata Motors’ UK based subsidiary JLR announced this week that all Jaguar cars and six out of every 10 Land Rover models will go electric by 2030. The company will invest about 2.5 billion pounds ($3.5 billion) a year into electrification and related technologies.

The company’s parent firm Hyundai Motors and its affiliate Kia Motors announced in 2019 they would invest $35 billion into future mobility technologies including EVs and self-driving cars. They unveiled a new platform dedicated to manufacturing EVs last year and plan to launch 23 EV models by 2025. Credit Suisse expects battery EVs to make up 11 per cent of Hyundai’s sales in 2025, up from 3 per cent last year. The company also is one of the biggest investors in hydrogen fuel cells. The car maker bought a majority stake last month in Boston Dynamics, the company famous for making dancing robots.

Passenger vehicle sales in January grow 11% YoY to 2,76,554 units

New Delhi: During January, the passenger car sales declined by a little more than one per cent year-on-year (YoY) to 1,53,244 units in the domestic market compared with 1,55,046 units in the corresponding month last year.

However, utility vehicle sales grew by 37 per cent YoY to 1,11,494 units during the month as against 81,231 units in January 2020, the monthly report by Society of Indian Automobile Manufacturers (SIAM) said on Thursday.

This has helped the total passenger vehicle sales grew at 2,76,554 units last month, a growth of 11 per cent compared with 2,48,840 units in the corresponding month last year.

Two-wheeler segment

In the two-wheeler segment, the scooter sales grew by nine per cent YoY to 4,54,315 units during the month as compared with 4,16,567 units in January 2020.

The motorcycle sales grew by five per cent to 9,16,365 units in January as against 8,71,886 units in the corresponding month last year, the SIAM data said.

Overall, the two-wheeler sales grew by around seven per cent to 14,29,928 units during the month as compared with 13,41,005 units in January last year.

The total of all segments grew by five per cent to 17,32,817 units in January compared with 16,50,812 units in January 2020.

“In the month of January, 2.77 lakh passenger vehicles were sold, clocking a CAGR growth of just 1.61 per cent over the previous highest sales in January 2018 of 2.64 lakh. As far as two-wheelers are concerned 14.30 lakh units were sold in January, which results in a de-growth of (-) 5.32 per cent CAGR from the highest sales in January 2018 of 16.85 lakh,” Rajesh Menon, Director General, SIAM said.

Sales of three-wheelers continued to suffer a de-growth of (-) 57 per cent to 26,335 units compared to January 2020 (60,903 units), primarily on account of lower off-take of passenger three-wheelers, he said. “Supply chain challenges including the rising price of steel, unavailability of semiconductors and higher container charges, continue to be obstacles in the smooth functioning of the industry,” Menon added.

Skoda Auto Volkswagen India’s operations become net water positive

Source: The Economic Times, Feb 09, 2021

Mumbai: Skoda Auto Volkswagen India, the domestic unit of the VW Group, has achieved certification for being net water positive from DQS India achieving a water conservation ratio of 1.05, meaning it replenishes 105 litres of water for every 100 litres it uses.

Both of the company’s plants in India at Pune and Aurangabad are zero liquid discharge facilities boast effluent treatment and recycling facilities along with sewage treatment plants, the company said in a statement.

This was complemented by several watershed management projects in Latur, Nippad and Gulani villages conserving over 220,000 cubic metres of water annually. The company aims to increase its net water conservation from 1:1.05 to 1:3 by 2025.

“As we grow our operation, we aspire to remain the flagbearer of sustainable operations and continue to demonstrate the economic viability of fulfilling our responsibility to replenish much more than the impact of our operations to the environment,” Gurpratap Boparai, managing director, Skoda Auto Volkswagen India, said in a statement.

Last year, the VW Group company was received ‘Zero Waste to Landfill’ certification from TUV Nord.

Daimler India expands product portfolio, launches 8 new models

Source: Business Standard, Jan 27, 2021

New Delhi: Daimler India Commercial Vehicles (DICV) on Wednesday launched eight new products, including fully built reefer trucks which are customised for pharma and vaccine logistics.

The Chennai-based company has introduced six trucks and two bus models equipped with new user-centric features and design elements under its Bharat Benz brand.

The product portfolio comes with COVID-19 prevention features like infection-proof fabric seats, safety kits and disinfection fogging machines.

In today’s rapidly-changing environment, it is vital to meet the dynamic needs of society.

With this in mind, we proudly introduce a new range with special COVID-prevention features,” DICV MD & CEO Satyakam Arya said in a statement.

Since the start of BS-VI sales in April 2020, Bharat Benz has almost doubled its market share and increased its network to 250 touchpoints across India.

Automobile sales register 14 per cent growth in December

Source: The Hindu Business Line, Jan 14, 2021

New Delhi: In December, the domestic passenger car sales grew by more than eight per cent year-on-year (YoY) to 1,46,864 units compared with 1,35,531 units in December 2019.

The utility vehicle sales also grew by around 20 per cent YoY to 94,787 units during the month as against 79,153 units in corresponding month previous year, the latest report shared by Society of Indian Automobile Manufacturers (SIAM) said on Thursday.

This has led to the overall growth of around 14 per cent in the passenger vehicle segment to 2,52,998 units during the month as compared with 2,22,728 units in December 2019.

In the two-wheeler segment, the sales grew by a little more than seven per cent YoY to 11,27,917 units in December as compared with 10,50,038 units in December 2019.

The motorcycle sales grew by around seven per cent to 7,44,237 units during the month as compared with 6,97,819 units in the corresponding month previous year.

Similarly, scooter sales grew by around six per cent YoY to 3,23,696 units compared with 3,06,550 units in December 2019.

“Indian automobile industry appreciates the government’s efforts to balance the safety of people and the revival of the economy from the negative effects of the pandemic. Initiatives such as the announcement of PLI scheme, keeping interest rates very low, targeted spending in rural areas and continued focus on building road infrastructure, will help in our recovery process,” Kenichi Ayukawa, President, SIAM said.

He also said that the market situation is dynamic and uncertain. The industry is facing a shortage of semiconductors, steel and shipping containers.

“There is also an impact of the price increase of steel, logistics and other raw materials. The industry is working hard to get back to better volumes and better business health while ensuring the safety and well-being of people across the whole value chain,” he added.

Car wholesales

Meanwhile, SIAM also reported wholesale numbers of the last nine months (April-December), in which it had reported a decline of 16 per cent in total passenger vehicle sales to 1,777,874 units as compared to 2,117,920 units in corresponding period previous year.

Hit by the lockdown and no sales for more than a month during the pandemic, the passenger car wholesales declined by more than 20 per cent YoY to 1,028,101 units during April-December 2020, as compared with 1,291,234 units in same period in 2019.

Two-wheeler sales also had declined by around 23 per cent YoY during the period to 1,07,65,788 units during the period, as compared with 1,39,13,795 units in corresponding period previous year.

The commercial sales were also hit the most and declined by more than 37 per cent YoY during the April-December period to 3,58,203 units as compared with 5,70,694 units in the same period 2019. “If we look at the cumulative numbers of the nine-month period from April to December 2020, it shows that sales of all segments are still behind by many years. Passenger vehicle sales are behind by nearly a decade, while two-wheeler sales are behind by seven years,” Ayukawa added.

Tesla marks India entry with new office in Bengaluru, names three directors

Source: Business Standard, Jan 13, 2021

Bengaluru: US-based electric vehicle maker Tesla has registered with the Registrar of Companies in India as Tesla India Motors and Energy Private Ltd.

It incorporated itself in Bengaluru on January 8 with an authorised capital of Rs 15 lakh and a paid-up capital of Rs 1 lakh.

“Tesla setting up its office in the state is a welcome step.

“We will cooperate with it and give it all the facilities to function smoothly,” said Karnataka Industries Minister Jagadish Shettar.

No location has yet been finalised for Tesla to set a manufacturing plant in the state, he added. Gaurav Gupta, principal secretary to the government of Karnataka, said the state had been in regular touch with Tesla for the last few months.

Vaibhav Taneja, Venkat­rangam Sreeram, and David Jon Feinstein will be the three directors of the new company.

Union Minister for Road Transport and Highways Nitin Gadkari had in December said that Tesla would be arriving in India in early 2021. Tesla CEO Elon Musk too had last year announced on Twitter that his company would enter India in 2021. The world’s most valuable auto company is likely to make its debut in India with the more affordable Tesla Model 3. Expected to cost around Rs 60 lakh, the fully electric vehicle is powered by a 60kw hour lithium-ion battery pack with a range of 500 km. The sedan has a top speed of around 250 km and goes from 0 to 60mph in only 3.1 seconds.

To begin with, Tesla will take an imported route for its initial innings and therefore attract high duties. It will also not be eligible for the FAME scheme. Karnataka is currently a hub of several EV makers such as Ather Energy and Mahindra Electric. In December, electric mobility solutions and services company SUN Mobility had also announced plans to roll out 100 battery swapping stations in Bengaluru by the end of 2021.