Government gives nod for standardisation in vehicle dimensions as per global norms

Source: The Economic Times, Jun 29, 2020

New Delhi: To improve logistics efficiency in the country, the government has given nod to increase the dimension of motor vehicles including buses, trailers and good carriers at par with global standards.

The Ministry of Road Transport and Highways has come out with a notification in this regard to amend Rule-93 relating to dimensions of motor vehicles under the Central Motor Vehicle Rules 1989.

“These amendments would provide for standardization in the dimensions of the Motor Vehicles which would be in line with international standards and a step by the Ministry to improve the logistics efficiency in the country,” the Ministry of Road Transport and Highways said.

It further added that the enhanced dimensions would provide for extra passengers or extra carrying capacity within the prescribed weight.

As per the amendments, two-wheelers can have a length of maximum 4 meter and height of 2.5 meter.

Three-wheelers height has been increased from 2.2 meter to 2.5 meter and Pneumatic trailer through this notification has been made at par with Modular Hydraulic Trailer. “Road trains with length at par with EU at 25.25 mtrs have been proposed to be included on select routes,” as per the notification which also said that the dimension, particularly the height of the N category (goods vehicles) vehicles has been amended to encourage containerised transport.

“The dimensions, particularly the height of the M category vehicles has been amended from 3.8 meter to 4.0 meter except in the case of Airport passenger bus (retained at 3.8 meter), in line with international UN Economic Commission for Europe (UNECE) standards,” as per the notification.

The length of the buses with two axles has been amended from 12 meter to 13.5 meter.

“In case of N category of goods vehicles, height has been amended from 3.8 meter to 4.0 meter except in case of N1 category of vehicles where the height has been restricted to 3.0 meter,” the notification said.

The length of the Trailers (T category) has been amended from 18.0 meter to 18.75 meter to accommodate ISO standards containers of 45 feet. The height of the trailer is amended from 3.8 meter to 4.0 meter with certain exceptions.

Semi trailers carrying ISO series/ freight containers or fabricated/ refrigerated containers or with containerized body shall not exceed 4.52 meter, it said.

In case of truck-trailers/ tractor-trailer engaged by auto manufacturers to carry motor vehicles/ construction equipment motor vehicle/livestock/white goods with closed body or meant to carry indivisible loads, the overall height of the motor vehicle shall not exceed 4.75 meter, the government said. NAM NAM DRR DRR.

Import curbs may hit domestic automakers

Source: LiveMint.com, Jun 25, 2020

NEW DELHI: For the Indian automobile industry, jumping on the anti-China bandwagon will not be easy as certain spare parts, sourced from the Asian neighbour, are critical for manufacturing of BS-VI emission norm compliant vehicles.

With the advent of new stringent emission norms and connected features in vehicles, manufacturers need catalytic convertors, fuel injection systems and other such electronic parts based on semiconductors which are not manufactured in India, and also the ones available in China are cost competitive.

Not surprisingly, in February when factories in China were shut following the coronavirus outbreak, Indian vehicle manufacturers like Hero MotoCorp Ltd, TVS Motor Company Ltd, Tata Motors Ltd, Mahindra and Mahindra Ltd and others had scale down production due to shortage of imported spare parts.

With relations between the two countries souring, most automakers are now looking at ways to locally manufacture some of these critical spare parts. However, these could take up to five years to see results.

“A lot of electronic parts which go into a car cannot be made in India. Those are not available in India but I cannot complete a car without those parts…We should now look at how to improve the quality and cost of Indian products,” said RC Bhargava, chairman, Maruti Suzuki India Ltd.

While there is a significant dependence on China for internal combustion engine driven vehicles, the country’s is crucial for spare parts of electric vehicles.

Most lithium-ion batteries and cells, and electric motors are imported from China.

According to Rajesh Menon, director general, Society of Indian Automobile Manufacturers, the Indian automobile industry was pushed into upgrading to BS VI emission norms in just three years which did not allow for building of domestic supply chains.

“As the technology to meet BS VI emissions is high-end, the industry had no option but to work with global suppliers. Some parts being capital intensive, it did not make commercial sense to manufacture and source from India. Global suppliers of these parts have capacities in China and sourcing from China made commercial sense. All this led to dependence on China,” added Menon.

“Any tariff or non-tariff barriers to import would push OEMs for localisation of these components in the long term. While we have seen localisation drives in components like alloy wheels over the last few years, we still do not have the requisite scale/skills in certain segments like electrical and semiconductors,” said analysts at Motilal Oswal Financial Services in a report on 23 June.

Indian automobile manufacturers leapfrogged from Bharat Stage IV emission norms to stage VI within just three years, as the Indian government wanted to reduce vehicular emissions to curb pollution in major cities and towns.

According to a senior executive in an Indian auto maker, manufacturing cost will increase if India raises tariffs on import of some components since sourcing countries other than China will be more expensive. “The Indian auto companies will take at least 3-5 years to establish domestic sourcing of critical spare parts since the demand forecast for the domestic market is quite subdued. For global manufacturers to set up a base in India will only make sense if the domestic market can generate volumes. Otherwise how will any company convince them to manufacture these parts in India,” said the executive requesting anonymity.

Used-cars segment sees renewed buyer interest

Source: The Hindu Business Line, Jun 18, 2020

Chennai/New Delhi: With growing emphasis on personal mobility due to fear of Covid-19, there is renewed interest in used cars and the good news is that customers are spoilt for choice.

According to K Mahalingam, Partner, TS Mahalingam & Sons, a Chennai-based player in the pre-owned car space, there are more sellers than buyers at this point of time in the used car market.

“On the buying side, walk-ins are not that great due to restrictions on account of the Covid-19 lockdown. But enquiries are coming as lot of people are now interested in using personal transport,” he says. Chennai is, incidentally, bracing for another lockdown beginning Friday.

However, it is still not clear if more people are selling their cars due to the pressure of having to pay EMIs. “There could be a small portion doing that. But I don’t think it is the primary factor for more pre-owned cars available for sale,” he says.

Interestingly, there are more enquiries in the ₹2-5 lakh space. Whether this is a Chennai-specific trend is a moot point considering that behavioural patterns are different across the country.

Shashank Srivastava, Executive Director of Maruti Suzuki, insists that there is renewed interest in used cars due to the growing emphasis on personal mobility. The need for social distancing, coupled with concerns on safety and hygiene, will give an impetus to this business, he adds.

Maruti Suzuki, which operates 570 True Value used car outlets, has also observed that nearly 85 per cent of pre-owned car customers are two-wheeler upgrades. “In terms of demand, we have seen over 10 per cent growth in enquiries this month,” says Srivastava.

Estimates indicate that over four million pre-owned cars were sold last year. “We sold 4.19 lakh units at True Value in 2019-20 compared to 4.22 lakh units in 2018-19,” he adds.

Maruti’s closest rival, Hyundai Motor India, is also upbeat about this business. Tarun Garg, Director (Sales, Marketing & Service), is confident that there will be an “increase in traction” for used cars. “Hyundai has a strong used car business with a vast network of H Promise outlets across India,” he says.

Digital platforms

Beyond brick and mortar, car digital platforms such as CarDekho claim 99 per cent recovery in customer traffic for used cars. The recovery rate of cars in the ₹1-5 lakh segment is the highest. Among SUVs, the ₹5-15 lakh segment has the highest share while sedans in the ₹15-20 lakh range are the most searched. Maruti and Tata Motors cars top the search list by consumers. Honda has the highest share in the mid-segment category.

However, not everything is hunky-dory going by what Vinkesh Gulati, Vice-President, Federation of Automobile Dealers Associations (FADA), says. “There is a fear psychosis amongst the dealers of used car business, especially the unorganised ones.”

According to him, many are closing down due to a severe cash crunch. Normally, the used car business does well during this time of the year, but due to the Covid scare, things are not so great right now. Yet, the fact remains that there are attractive bargains on offer. For those seeking a great deal on wheels, this could be an ideal time to buy.

Kia Motors to invest an additional $54 mn in Andhra Pradesh facility

Source: Business Standard, May 28, 2020

Hyderabad: Some of the prominent companies having manufacturing operations in Andhra Pradesh have pledged more investments in coming years as the state government tries to improve the competitiveness and business environment in the state for industrial development.

Chief Minister Y S Jagan Mohan Reddy on Thursday held an open interactive session with industry representatives to hear their views on industrial environment and provide feed back on his government’s initiatives on the eve of the completion of one year in government.

The chief minister said he would want to see the businesses happy and comfortable as they provide more jobs as and when they are able to run their operations smoothly and successfully.

During the interaction, Kia Motors India’s chief executive officer Kookhyun Shim said that his company would invest $54 million in the plant over and above what was already committed. Kia Motors had rolled out Made in India SUV models last year following the commencement of manufacturing operations at its first plant in India located in the district of Anantapur.

The company had announced $2 billion investment, including a vendor base in the state at the time of signing an MoU with the AP government in April 2017. The company readied its plant in less than two years time while the debut launch of multi-variant Kea Seltos SUV last year found instant success beating the general decline in car sales in the segment.

Shim said that the additional investment would go towards SUV manufacturing operations, sounding an optimistic note at a time of gloom surrounding the car industry among other sectors due to coronavirus pandemic.The Korean auto maker restarted its operations two weeks ago after the state government issued relaxations from the lockdown restrictions imposed earlier.

Meanwhile, the homegrown Aurobindo Pharma Limited, which has a large manufacturing base in the state, also said it would be making substantial investments in 2-3 years time in the state. Speaking at the session, Aurobindo Pharma director M Madan Mohan Reddy said the company was planning to invest close to Rs 2,000 crore in the next 2-3 years to ramp up capacities in the state. Aurobindo has 6 manufacturing facilities in AP and it has invested around Rs 3,000 crore in the state so far, according to Reddy. Meanwhile, the chief minister said that his government would strive to further build on the inherent strengths of the state to make it an attractive destination for the industry, including skill development initiatives to produce skilled manpower in order to make cities like Vizag compete with Tier-1 cities like Hyderabad, Bengaluru and Chennai in the software sector among others.

Govt to introduce vehicle scrappage policy to boost manufacturing: Gadkari

Source: Business Standard, May 21, 2020

New Delhi: Union Minister Nitin Gadkari on Thursday said the government is set to introduce a vehicle scrappage policy, under which recycling clusters may be established near ports, expressing confidence that India will emerge as the world’s leading automobile manufacturing hub in five years.

“Now, we are going to start the new scrapping policy, by which old cars, trucks and buses will be scrapped,” the Minister of MSME and Road Transport and Highways said.

He said the government has decided to increase the depth of the country’s ports by 18 metres, and automobile clusters comprising recycling plants can be set up near the ports.

The minister added that the material recycled will be useful for the automobile industry as it will reduce cost of manufacturing cars, buses, and trucks, increasing India’s competitiveness in international markets.


“Within five years, India will be the number one manufacturing hub of all cars, buses and trucks, with all fuel, ethanol, methanol, bio-CNG, LNG, electric as well as hydrogen fuel cells,” Gadkari said.

He was addressing a meeting via video conferencing with the representatives of MIT ADT University on future of higher education.

Experts said the draft guidelines for setting up authorised vehicle scrappage facilities that the Ministry of Road Transport and Highways (MoRTH) released in October 2019 was seen as a step in the right direction but a lot of work was yet to be done. The guidelines detailed the infrastructure requirement and the procedure for setting up vehicle scrappage facilities in the country, streamlining the process for entities interested in entering this business.

Bajaj Auto commences re-opening of dealerships across India

Source: The Hindu Business Line, May 11, 2020

Mumbai: Bajaj Auto said on Monday that it commenced the reopening of dealerships and service centres in various parts of the country from May 4.

This re-commencement of facilities is as per the various guidelines by the Central and State government with the dealership taking permission from the respective local authorities, the company said in a statement.

“India is gearing up for the new normal post the Covid-19 pandemic and so are we at Bajaj Auto. The opening of workshops and dealerships is another step towards making a fresh start. To ensure safety, speed and efficiency with minimal contact, a new workflow process has been put in place for both sales and service,” said Rakesh Sharma, Executive Director, Bajaj Auto Ltd.

All the facilities have been sanitized prior to the restart of business, the company said.

“There are social distancing protocols in place at all customer facing touch points at dealerships. Mandatory thermal screening at the entrance and regular monitoring of employees’ health is being done to ensure a completely safe environment at dealership and service locations,” it said. Customers can reach out on the toll free number: 7219821111 to check the status of the dealership or service centre in different cities.

Auto companies prepare to resume production

Source: LiveMint.com, May 07, 2020

NEW DELHI: Automobile companies, including Maruti Suzuki India (MSI), Mercedes-Benz, TVS Motor, and Royal Enfield, on Wednesday announced resumption of or plans to restart production at their respective manufacturing units following relaxation of guidelines by the government for the third phase of lockdown.

The country’s largest carmaker Maruti Suzuki India said it would resume operations at its Manesar plant from 12 May.

The Gurugram district administration had allowed MSI to run the Manesar facility on a single shift basis, while fixing the total number of employees at plant at 4,696.

The company’s Manesar (Haryana) plant is outside the limits of the Gurugram Municipal Corporation, while its Gurugram plant falls within the city limits.

The two plants in Haryana have an installed capacity to roll out 1.55 million units per annum. Operations at the facilities are suspended since 22 March.

Hyundai Motor India, which is yet to start rolling out vehicles from its Chennai plant though it has commenced preparations to do so, said around 250 company dealerships have resumed operations across various states.

On the other hand, Mercedes-Benz India said it has resumed production at its manufacturing facility in Chakan, Pune.

The production has commenced in a graded manner following directives from the government of Maharashtra to reopen and resume operations, the company said in a statement.

Similarly, Chennai-based TVS Motor Company said it has commenced operations in India across all factories in Hosur, Mysuru and Nalagarh, while niche bike maker Royal Enfield also said it has resumed operations at its manufacturing plants.

However, Honda Cars India Ltd (HCIL) said lack of required workforce is making it difficult for the company to resume operations at its two manufacturing plants, but added that its dealerships have started to open across the country.

The automaker, which sells models like City and Amaze, said that with new relaxations from the government, it is planning to restart operations at the Tapukara plant in Rajasthan sometime next week.

Likewise, utility vehicle maker Isuzu Motors India also said it has received approvals from local authorities to resume operations at its plant in Sri City, Andhra Pradesh.

Similarly, tyre major MRF Ltd said it has partially resumed operations in most of its plants with restricted manpower, following relaxation of lockdown guidelines by the government. The home ministry had allowed factories in rural areas or those outside municipal limits to resume production under strict safety and hygiene guidelines from Monday with an aim to kick-start economic activity in the third phase of lockdown till 17 May.

Locked-out auto companies risk losing billions in exports

Source: The Economic Times, Apr 29, 2020

Mumbai: Export orders worth $4-5 billion are at stake for automakers, who have now seen production facilities shut for six straight weeks. These orders need to be fulfilled in the April-June quarter.

The industry is urging the government to allow production across the entire supply chain at different hubs. Without this, the export orders can’t be honoured, say automakers. They also say servicing these orders is the best way to ensure there are no more job and salary cuts in the sector.

Adding to Indian automakers’ apprehension is the fact that China’s economy is mostly up and running, with many of its factories operating at almost 100% capacity. Auto companies are worried they may lose orders to Chinese and South East Asian manufacturers.

‘Opening Up Early Critical’
Orders for nearly 110,000 passenger vehicles are pending, valued at Rs 10,000 crore ($1.5 billion). Auto components makers have orders worth about $2 billion. Plus, there are $500 million to $1 billion of export orders for two-wheelers, threewheelers and commercial vehicles.

Multiple people tracking the auto sector spoke to ET, some spoke off record.
Rakesh Sharma, executive director at Bajaj Auto, says the company is keen on ramping up production as it has Rs 1,000 crore of export orders. “With many regions yet to get a go-ahead from local administrations, first-quarter volumes are expected to see a 50% decline in the domestic market. However, it is our overseas business which puts us in a better position than others,” Sharma says.

BRIGHT SPOT
Analysts expect the export market to be the likely bright spot for twowheelers in 2020, assuming sufficient production. This market can even register 5-8% growth in the current year, similar to export sales in recent non-pandemic times.

Opening up early is critical, automakers say, because many overseas markets will open before India and buyers may look elsewhere.

Equally crucial is the jobs/salaries question. Most automakers paid full salaries for March. April has seen no production, and cash is running out for most companies. Industry observers predict wideranging job and salary cuts in case production doesn’t resume quickly.

TOUGH TO REGAIN MARKET
Deepak Jain, chairman of Lumax Industries and the president of Automotive Component Manufacturers Association, says the industry has close to $2 billion of orders. He said it was tough to regain an export market once it is lost.

“We are competing in the global supply chain. If you are sourcing parts from a market that is still shut, people will look for an alternative source … and getting back will be tough,” Jain says.

Renault India, along with alliance partner Nissan Motor, has a pending order book position of 25,000 cars for the current quarter. Renault also ships components worth Euros 250-300 million annually to many global markets, including China.

Venkatram Mamillapalle, MD of Renault India, says the industry is “urging both the central and state governments to get us back on track and get the wheels moving”.

Losing export orders will be especially bad news now because the global passenger car market is expected to decline by 16.1% to 77.11 million units in the current year, the lowest absolute sales since 2011, according to Nomura.

From BMW to M G Motor, auto brands shift gears on the virtual highway

Source: Business Standard, Apr 02, 2020

Chennai: As minimal to zero physical proximity becomes the norm, auto brands are looking at ways in which to press their digital channels into service, most efficiently and with maximum impact. Specific tailored marketing pitches using first party data, smoother payment and financing processes and digital launches that attempt to simulate showroom experience are among the ways in which auto majors are keeping their brands in the game.

For example, the recent launch of Creta by Hyundai. Eager to knock down friction on the purchase pathway to the minimum, the company had been working on a click-to-buy portal.

Piloted in January with a few dealerships, Hyundai commissioned it into full service in the wake of a lockdown as it sought to ensure a seamless customer purchase journey.

Not just Hyundai but other auto companies are also looking to fix the crimps on their digital highways.

According to a report by Facebook and KPMG (Eliminating friction in the automobile path to purchase, 2018-19), a poor digital strategy means that more than two-thirds of four wheeler addressable market does not even enter the purchase funnel.

“Further, nearly four in every five four-wheeler and two in three two-wheeler aware decision-makers do not complete their purchase journey after initiating it,” the report noted.

For Hyundai, fixing the payment and financing gateways for Creta was part of the launch plan but when the entire exercise was impacted by the pandemic, the task became doubly critical.

“Ever since its launch in 2015, the Creta has become the benchmark SUV for the aspirational Indian buyer,” said Tarun Garg, director, sales and marketing, Hyundai Motor India. For Hyundai too, Creta sets the benchmark as its market share is up from 11per cent in 2015 to 23 per cent in 2019. Hence all stops were pulled out to ensure that nothing, not even a pandemic, could derail the launch.

A similar imperative pushed luxury car maker BMW to launch a digital facelift of its entry level SUV BMW X1 in India and Volkswagen India to go for the online launch of its T-Roc. Rudratej Singh, president and CEO of BMW Group India said, “In today’s situation with the corona virus scares and the sentiment being the way it is, we would like to just encourage people to use technology. We are turning adversity into an opportunity to make sure that people are safe, but also have a thrilling experience.”

By going digital, luxury car makers could significantly widen their reach several studies have shown. According to one by Google and Kantar TNS, even though all auto purchases happen offline, 90 per cent of car buyers research online before setting foot into a dealership. And once they’re at the dealership, 65 per cent of car buyers will continue to do research on their smartphones. This holds true for both mass and premium brands.

For Volkswagen and BMW, the digital thrust is likely to hold up through future launches too, given that the current pandemic is likely to increase the influence of online channels even further. Another auto company betting on a digital future is MG Motor. The company said it has completely digitised the process of bookings and delivery. Plus it has put out an assurance for all buyers. Gaurav Gupta, chief commercial officer, MG Motor India said, “In times like these, ensuring the well-being of people becomes paramount. Safety being our topmost priority, through the ‘Disinfect and Deliver’ programme, our focus is to sanitise throughout the value chain.” However even as auto companies look at ways to tip the virtual scales in their favour, experts hold out several warnings. Customers want convenience but are wary of the dangers (data privacy, fake information) that digital channels hold out.

“Data privacy remains a significant concern for consumers globally, with 61 per cent of those surveyed indicating they would be less willing to buy or use a product or service if companies use their personal data,” found a recently released report, ‘Consumer trust in digital marketing’ by Group M. For India, 58 per cent of consumers said they were less willing to buy or use a product or service if companies use their personal data, the report said. Transparency and experience will emerge as key differentiators said experts and this is driving many companies to design personalised engagements and interactions with potential buyers.

Government eases controls, taps automakers to manufacture ventilator

Source: LiveMint.com, Mar 27, 2020

India has lifted controls on producing medical ventilators, as it seeks to plug the growing shortage of this critical equipment in the battle against Covid-19.

According to a government communication reviewed by Mint, the Centre plans to ask all interested manufacturing companies, including automakers, to start producing ventilators.

“It is to inform that presently, no permission is required for manufacturing of ventilators under the Drugs and Cosmetics Act and Medical Device Rules. Therefore, those who are willing to come forward and manufacture ventilators may start the production to tackle the situation arising out of Covid-19 outbreak in public interest,” V. G. Somani, India’s Drugs Controller General, said in an email to the secretary, ministry of pharmaceuticals, on 23 March.

Companies generally need a license to make items listed as essential medical equipment under the Drugs and Cosmetics Act and Medical Device Rules. This rule has however been waived off considering the medical urgency but only if the manufacturer partners a licensed firm.

The Union government had on Tuesday reached out to five automakers—Tata Motors Ltd, Mahindra and Mahindra Ltd (M&M), Hyundai Motor India Ltd, Honda Cars India Ltd and Maruti Suzuki India Ltd—to explore the possibility of making ventilators at their plants.

It also urged the automakers to partner nine companies who currently make ventilators in India and Tata Motors and M&M have already begun talks with some of them, said four people aware of the development.

“The government has asked us to partner with these auto companies like Maruti and Hyundai as well as any other manufacturers to make ventilators. Basically, we will share the technology and designs with them and they will manufacture it temporarily,” said an official with a ventilator maker, requesting anonymity.

“Tata Motors might start production of such ventilators with one of the equipment manufacturing companies from next week. The developments are being monitored by the top management of the conglomerate Tata Sons, including the chairman. The challenge though will be reopening the plants for such a micro operation since permission will be required from local authorities,” said a person directly aware of the development.

A senior government official said the automakers will have to talk to the existing ventilator manufacturers to reach an agreement on sharing of design and technology.

“It is only automobile manufacturers we had a meeting with, and they had only shown interest. But, if anyone else is also interested, they can partner with these ventilator makers and manufacture it,” the official said, requesting anonymity.

The step is spearheaded by the Department of Pharmaceuticals, in consultation with the Central Drugs Standard Control Organization (CDSCO), a senior health ministry official said separately.

The health ministry has so far declined to give an estimate for the number of ventilators in India. The latest move shows however that there may be an acute shortage of ventilators in India, especially considering that the total number of cases of novel coronavirus infection, or Covid-19, is expected to rise exponentially from nearly 700 now.