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Centre, states must lower car ownership cost: RC Bhargava

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(This story originally appeared in on Sep 07, 2020)

A former civil servant, R C Bhargava is the chairman of the country’s largest carmaker Maruti Suzuki and unarguably the most-experienced top-ranked automobile professional in India. Involved with Maruti right from the time Japan’s Suzuki entered India in the 1980s, Bhargava feels the government needs to handhold the industry by driving in affordability. Covid, he says, will help boost risk management systems…


How far have you achieved normalcy in business? What are the specific challenges?

During the past three months, production has risen steadily but is well behind 2018-19 levels. Sales has increased monthly, but lags 2018-19. We expect steady progress as we go ahead. It’s a challenge to predict the situation after a few months. The concern is, like in 2019-20, about demand till such time as the economic growth rate and GDP go beyond the levels of 2018-19, or the customer cost of acquisition of cars falls.

How much cost increase are you grappling with?

Compliance with all the safety protocols relating to the pandemic naturally resulted in some extra costs. Expenditures were also incurred in treating employees, paying salaries when there was no work, etc. However, there were also cost savings from new working procedures and overall there was no significant impact on the company’s finances, other than that resulting from loss of production and sales.

How are you dealing with your employees?

The company has refrained from any situational reactions for remuneration. Last month, bonus for the previous financial year was paid to all employees. A salary increase for unionised associates has been announced. All jobs offered during campus recruitment have been honoured and employees on-boarded.

How can the government help?

Given the importance of this industry, central and state governments should consider measures to increase demand by lowering the acquisition cost of cars by consumers.

Learnings from working during the pandemic?

Use of technology and digital systems has grown rapidly and will stay as they lead to greater efficiency and save cost besides increasing convenience. A great deal of commuting time in travelling and attending meetings can be saved. There have been good learnings in the area of safety and hygiene, which should be of benefit at homes also in the future. Risk management systems will become more robust.

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Tesla (TSLA) earnings Q4 2020

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Employees work at the Tesla Gigafactory in Shanghai, east China, Nov. 20, 2020. U.S. electric car company Tesla in 2019 built its first Gigafactory outside the United States in the new Lingang area, with a designed annual production capacity of 500,000 units.

Ding Ting | Xinhua News Agency | Getty Images

Tesla is expected to report 2020 fourth quarter results on Wednesday after the bell, and to offer guidance for the first quarter and full year ahead.

Here’s what analysts are expecting, according to an average of estimates compiled by Refinitiv as of Wednesday:

  • Earnings: $1.03 per share expected
  • Revenue: $10.4 billion expected

And here’s what guidance Wall Street expects from Tesla for the full year ahead:

  • 2021 earnings guidance: $4.15 per share expected
  • 2021 revenue guidance: $46.09 billion expected

Tesla previously said it had delivered 499,550 vehicles in 2020, falling barely shy of its guidance for half a million vehicle deliveries in 2020. (Deliveries are the closest approximation of sales numbers disclosed by Tesla.) It produced 509,737 vehicles during the year.

Both deliveries and production numbers set a new record for Elon Musk’s maturing electric car company, seen as a triumph in a year when auto sales and factory operations were dampened by a global pandemic.

Starting around the end of 2019, Tesla has said that it expects to report positive cash flow and net income moving forward, with possible exceptions around the launch and ramp in production of new products or facilities. Last quarter was its fifth consecutive quarter of profitability — which led to the addition of the company to the S&P 500.

Tesla is currently building new factories in Austin, Texas, and Brandenburg, Germany, after quickly constructing and reaching a high volume of production at its last new plant in Shanghai.

Vehicle sales in China largely enabled Tesla to hit record deliveries in 2020. So did the introduction of a new crossover SUV, the Model Y, which Tesla began to produce in serious volumes in the first quarter last year out of its Fremont, California car plant.

By the period ending in September 2020, Tesla was making more Model Ys than Model 3s for US drivers, according to NHTSA records on light vehicle production. The company has not historically broken out sales numbers by region, or precise model. Instead it combines sales of Model Y and 3, and Model S and X.

Since Tesla’s third quarter earnings call in October 2020, the price of the company’s stock has more than doubled, giving it a market capitalization of more than $835 billion and making it the fifth-most valuable company in the U.S.

This is breaking news. Please check back for updates.


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GM returning with two ads focused on electric vehicles

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One of General Motors’ two Super Bowl ads this year will feature the Cadillac Lyriq. In this provided screenshot of the Cadillac ad, the Lyriq appears to be in the fictional neighborhood of 1990’s “Edward Scissorhands” movie.

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DETROIT – General Motors will air two commercials during this year’s Super Bowl advertising its all-electric vehicles, the company confirmed Wednesday to CNBC.

One of the 60-second ads will feature the company’s new focus on electric vehicles — GM’s first corporate spot in more than a decade — while the other will feature the automaker’s luxury Cadillac brand and its upcoming Lyriq crossover EV.

GM is launching the new ad campaign after recently redesigning its corporate logo to better represent the its pivot to EVs, including 30 new models globally under a $27 billion investment in electric and autonomous vehicles through 2025. The redesigned logo accompanies a new “everyone in” tagline.

“General Motors is creating a movement by making EVs fun, desirable and accessible for people from every walk of life,” GM Chief Marketing Officer Deborah Wahl said in a statement. “We’re excited to demonstrate the tremendous energy and enthusiasm behind our EV commitment by showing up big at this year’s Super Bowl with both GM and Cadillac.”

A GM spokesman declined to discuss further details of the ads, which will likely to be released prior to their national broadcasts during next Sunday’s Super Bowl LV between the Tampa Bay Buccaneers and Kansas City Chiefs.

Cadillac Chief Marketing Officer Melissa Grady separately said the brand’s Super Bowl ad “will surprise and delight audiences by transporting an iconic piece of pop-culture history into the future.” She said it will feature the Lyriq as well as the company’s Super Cruise hands-free driver assist system. It will be Cadillac’s first time advertising during the Super Bowl since 2012.

This will be GM’s second-consecutive year of advertising during the Super Bowl. A year ago, the company previewed its all-electric GMC Hummer EV pickup. The 30-second ad featured NBA star LeBron James and teased the new vehicle, which is expected to go on sale this fall.


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Fiat Chrysler to pay $30 million to settle federal corruption probe

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UAW President Rory Gamble (left) and U.S. Attorney Matthew Schneider announce a settlement agreement to end a years-long corruption investigation into the union on Dec. 14, 2020 in Detroit.

Michael Wayland / CNBC

Stellantis, formerly Fiat Chrysler, has agreed to pay $30 million as part of a plea deal to settle a criminal investigation into collusion and bribery of union officials by former executives of the company’s North American operations.

The deal, which was announced Wednesday by federal prosecutors in Detroit, ends a multiyear federal probe into Fiat Chrysler and the United Auto Workers union. Prosecutors announced a separate plea deal last month with the UAW.

It’s unclear at this time when Stellantis will pay the fine as the agreement remains subject to U.S. federal court approval.

Under terms of the deal, the company agreed to plead guilty to a single count of conspiracy to violate the Labor Management Relations Act.

The agreement also requires the company to hire an independent compliance monitor for three years. That person will oversee the dissolution of a training facility at the center of the probe, among other things, according to the company

The investigation has led to convictions of 15 people, including two past UAW presidents, three Fiat Chrysler executives and a former General Motors board member who was a union leader. Prison sentences for those involved have ranged from 60 days to 6½ years. A handful of people are still awaiting sentencing.


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