After two months of positive sales, auto sales fall by 15% in December

Source: Business Standard, Jan 22, 2019

Chennai: Retail sales of automobiles in the country dropped by nearly 15 per cent to 1,606,002 units in December 2019, the highest decline in the current financial year.

Earlier, the Society of Indian Automobile Manufacturers (Siam), which monitors wholesale data, showed that total vehicle sales across categories registered a decline of 13.08 per cent to 1,405,776 units from 167,398 units in December 2018.


Federation of Automobile Dealers Associations (FADA) data shows that total vehicle registrations dropped to 1,606,002 units in December 2019 from 1,880,995 units a year ago.

While commercial vehicle (CV) sales were the worst hit, down by 21 per cent to 67,793 units from 85,833 units, two-wheeler sales dropped by 16 per cent to 1,264,169 units from 1,500,545 units. Passenger car sales dropped nine per cent to 215,716 units from 236,586 units.

FADA President Ashish Harsharaj Kale said December sales de-growth was not on expected lines as enquiry levels all through the month were quite robust. Consumer sentiment continues to be very weak as customers did not conclude their purchase even after enquiring and despite the best offers being available. The federation expressed concern on falling auto sales and shifted its stance to ‘very cautious’ for near and mid term as the industry moves towards BS-VI transition.

“The sharp decline in growth has denied the dealer community an opportunity to reduce BS-IV inventory, making the transition to BS-VI trickier. With such a weak consumer sentiment, FADA recommends a very cautious approach to its members with serious focus on BS-IV inventory liquidation,” said Kale. FADA, which represents the dealer community, said it will work towards seeking relief from the Supreme Court on BS-IV inventory with its members. With such weak consumer demand, near-term retail sales are unpredictable. This makes it extremely difficult for FADA’s members to continue the current business and ensure selling entire BS-IV inventory by March 31.

Kale said, although there was a slight reduction across all segments, CV and two-wheeler inventory still remains a concern, especially looking at the transition and the current weakness in demand.

Passenger vehicles for the first time is in the FADA recommended range of three weeks.

FADA said that liquidity still remains a concern for the dealer community as well as for the retail customer as banking and finance industry continues to be in cautious mode.

Along with government measures aimed at increasing demand, equal importance needs to be given to availability of reasonably liberal credit.

This is especially true in a developing country like India where growth is driven by first-time buyers or individuals and businesses, he said.

FADA’s survey showed 43 per cent of its members expect January to be flat while 28 per cent dealers rated it de-growth. The remaining feel that the month may see some growth.

India’s electric vehicle ambitions could stumble on lack of Lithium

Source: LiveMint.com, Jan 21, 2019

MUMBAI: India’s ambition of becoming a global hub for making electric vehicles faces one major hurdle: its lack of access to lithium.

Home to some of the most polluted cities on the planet, the South Asian nation is pivoting toward new-energy vehicles to clean up its toxic air. But with meager resources of lithium, the mineral essential to make batteries for electric vehicles, it is having to scour for resources overseas.

India’s EV production will rely on imports from China of lithium chemicals used to make cathodes and battery cells, according to Jasmeet Singh Kalsi, director at Manikaran Power Ltd., which is exploring setting up India’s first lithium refinery. “China has a thriving lithium chemical, battery cathode, battery cell and EV supply chain. India has none.”

Prime Minister Narendra Modi’s administration unveiled a slew of measures in 2019 to promote the clean-energy vehicles, including a $1.4 billion plan to make India a manufacturing hub for EVs and cutting taxes to spur purchases. While electric cars in India remain a small segment, with an estimated 3,000 sold in 2018 compared with the 3.4 million fossil fuel-powered cars in the same year, the nation is forecast become the fourth-largest market for EVs by 2040, when the segment will comprise nearly a third of all vehicles sales, according to BloombergNEF.

Import Reliance

Several plans are under way to build lithium-ion battery factories in India. Meanwhile, China — the largest electric vehicle market in the world — is dominant in the battery supply chain.

Around three-quarters of battery cell manufacturing capacity is in China, and Chinese companies have unparalleled control of required domestic and foreign battery raw materials and processing facilities, according to BNEF.

“Indian companies have been involved in trying to prospect for stakes in overseas resources, and possibly on-shoring more raw materials production capacity in India,” said Sophie Lu, head of metals and mining for BloombergNEF. “But there are very little synergies right now because further up the value chain, battery components manufacturing capacity does not seem to be planned extensively for India.”

A joint venture called Khanij Bidesh India Ltd. has been formed between three state-run companies — National Aluminium Co., Hindustan Copper Ltd. and Mineral Exploration Corp. — to acquire lithium and cobalt mines overseas. Amara Raja Batteries Ltd., the country’s second-biggest traditional battery maker by value, will build a lithium-ion assembly plant, while Suzuki Motor Corp. along with Toshiba Corp. and Denso Corp. is setting up a lithium-ion battery manufacturing plant.

Manikaran signed an agreement with Australia’s Neometals in June to jointly fund the evaluation of developing a lithium refinery in India with a capacity of 10,000 tons to 15,000 tons of the finished product. That capacity falls short of India’s projected requirement of 200,000 tons of lithium hydroxide by 2030, Kalsi said. Electric vehicles are “slowly going to take off, not with the speed the government perceives it to be, but going ahead the market is going to get pretty huge,” he said.

Luxury car sales in 2019 see biggest drop in over a decade

Source: The Economic Times, Jan 10, 2019

NEW DELHI: Sales of luxury cars in India declined by about 15% last year — the steepest drop in more than a decade — as a slump in economic activity, high import duty and expectation of a reduction in goods and services tax (GST) rates weighed on demand.

As per industry estimates, 34,500 to 35,500 luxury cars were sold in the country in 2019, compared with 40,340 units sold in 2018. Several senior company executives ETspoke with said they expect demand to revive after April 2020 when BS-VI emission norms kick in.

Martin Schwenk, managing director at market leader Mercedes-Benz India, admitted 2019 was a “challenging year”. However, the company, along with its dealer partners, continued to invest in customercentric initiatives and did not significantly change any of its plans.

“(It) got us back to positive growth in the last quarter. We also had a good festive season where we were able to generate positive sentiments in the market,” said Schwenk, who is also the CEO.

“Mercedes-Benz continues to remain optimistic on the luxury auto market in India in the mid to long term, and we are positive with our 2020 outlook.” The company will launch a vehicle every month in 2020 to buoy volumes.”

Luxury vehicles account for less than 1.2% of the overall automobile market in India, compared with 13% in China and 10% in the US. India has more than 350,000 millionaires, but the market size is yet to cross 50,000 units a year.

“Recovery in the overall economy, additional measures undertaken by the government to reduce GST, import duties, registration taxes on (luxury) cars and support by banks/NBFCs to offer easy access to loans for dealers and customers will help expand the market and boost the overall industry,” said Balbir Singh Dhillon, head, Audi India.

Dhillon expects the luxury car segment in the local market to remain flat in 2020, and to grow thereafter. Audi has scheduled multiple launches, including SUV Q8 and sedan A8, to revive demand.

Charles Frump, managing director at Volvo Cars India, was more optimistic. “In our assessment, people had postponed purchases last year, but we are seeing a lot of interest now. The demand is going to pick up April onward as BS-VI comes into force. With a current market share of less than 2%, luxury car segment has tremendous growth potential. We are hopeful of returning to 2018 sales numbers this year,” said Frump.

Government proposes BS VI emission norms for quadricycles from April 2020

Source: The Economic Times, Dec 26, 2019

NEW DELHI: The government has proposed to make BS VI emission norms mandatory for quadricycles from April 1, 2020, an official said. “The Road Transport and Highways Ministry in a draft notification has proposed amendment of Rule 115 to mandate the next level emission norms for quadricycles. The BS VI emission norms for quadricycle are being proposed with effect from 1st April 2020,” an official told .

Currently, quadricycles are covered under Bharat Stage IV emission norms.

The BS VI emission norms are in line with European standards.

Various testing, including those related to durability, would be as per Europe quadricycle norms, the official said.

Proposed emission limits in BS VI are in line with Euro 5 mass emission guidelines which will be applicable from January 1, 2020 in Europe, the official added.

Threshold limits for emission pollutants, conformity of production (CoP) frequency and sampling plan have been proposed.

The official said the government is soliciting comments and suggestion on the draft notification before finalising it.

Auto Expo 2020 will be launch pad for revival: SIAM

Source: The Hindu Business Line, Dec 20, 2019

New Delhi: The Auto Expo in February is expected to bring some cheer to the slowdown-hit auto industry as the event will be a ‘launching pad’ not only for newcomers but also for revival of the sector, the Society of Indian Automobile Manufacturers (SIAM) said on Friday.

However, some of the top notch companies including Honda, Toyota, Ford, BMW, Audi, Lexus, Volvo and Jaguar Land Rover along with two-wheeler majors Hero MotoCorp, Bajaj Auto and TVS Motor Co will not be participating in the biennial motor show. Over 60 new launches and unveiling of vehicles are expected during the seven-day event (February 5-12).

China’s Great Wall Motor Company and First Automotive Works (FAW) will make their debut along with MG Motors India on the theme ‘Explore the World of Mobility’. The theme resonates the message of technology, capability and vision of mobility for tomorrow — safer, cleaner, connected, bespoke and shared, SIAM said.

“The auto industry is putting its best foot forward to match the aspirations of the nation and this edition of the Auto Expo 2020 will bring to fore the futuristic trends and practicality towards encompassing a multitude of facets of mobility, especially the underlying focus on electric mobility, technology infusion and safety,” Rajan Wadhera, President, SIAM, said.

The auto show will not just be a futuristic perspective of the evolutionary paradigm in the Indian auto industry but would also manifest the automotive industry’s preparedness to adopt to the BS-VI norms, he added.The Expo will see 6 “special” days, with each day ‘exploring’ a specific aspect of the world of mobility – Enterprise Day, Goodwill Day, Family Day, Women Power Day, Green Day and Driving Experience Day, the industry body added.

Regulation for vintage vehicles to be formalised soon

Source: The Hindu Business Line, Dec 15, 2019

New Delhi: In a respite for enthusiasts and collectors of vintage cars, classic vehicles of more than 50 years of age may flash special number plates and enjoy exemption from scrappage once the regulation for these vehicles are formalised.

For facilitating regulation and registration of old vintage vehicles, the Ministry of Road Transport and Highways has come out with a draft notification that provides for a special number plate with “VA” letters signifying vintage in the registration number.

“It is expedient to provide for the preservation of vintage vehicles owing to their historic, cultural, technical and aesthetic significance. In exercise with the powers conferred by the Motor Vehicles Act, the Central Government on being satisfied that steps are required to encourage and regulate vintage motor vehicles being a part of technical, motoring and cultural heritage is pleased to make order of regulation for their registration or re-registration,” the draft notification said.

The regulation of vintage motor vehicles order 2019 mentions that these vehicles will display high-security registration plates bearing a registration mark consisting of the letters “XXVAYY” where VA stands for vintage, XX stands for state code and YY will be a two letter series followed by a number from 01 to 09 as allotted by the state registering authority.

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Citroen set for India entry with digitised sales process

Source: IBEF.org, Dec 10, 2019

European auto major Groupe PSA is ready to enter Indian market with smaller yet highly digitalised showrooms in ten cities for Citroen brand. The aim of the company is to help its dealers to invest judiciously on premises, as per a senior company official.

It formally announced its entry in the Indian market with Citroen brand early this year and is planning to build a seamless digital experience for potential customers of its first model which is a C5 Aircross SUV.

“Through our network, we aim to bring in a digital disruption for a seamless customer experience,” said Citroen India’s Senior Vice-President, Sales & Marketing, Mr Roland Bouchara. The idea behind this is to provide opportunity to the most potential buyers to research and chose model variants, transact for finance and insurance digitally, he added.

The brand aims to have relatively smaller sales outlets in the country with the introduction of digitalisation.

“Since we are setting up a new network, we are proposing a different business model to our dealers, wherein we will have relatively smaller showrooms but digitalised,” said Mr Bouchara. It will ensure a competitive premises investment, but a stronger all-encompassing digital environment, he added.”To support the launch of the C5 Aircross SUV, we will initially cover ten cities through Citron network,” he said. This will consist of all the major metro and tier-1 cities where the brand sees prospective buyers for the C5 Aircross SUV, he added.