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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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Tata Motors sees better second half even as it prepares for hard Brexit

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BENGALURU – India’s Tata Motors Ltd forecast a stronger second half on Tuesday as sales of its Jaguar Land Rover (JLR) vehicles improved in key markets even as it continued to grapple with the COVID-19 pandemic and uncertainties over a hard Brexit.

The global health crisis has hammered sales for automakers worldwide and compounded problems for the company’s luxury unit, which, like most companies, will have to face a wall of bureaucracy as Britain casts off from the European Union from Jan. 1.

Tata Motors said while it was prepared for any friction at the border, it hoped for clarity on Brexit to avoid supply chain disruptions and better manage its inventory.

“In the situation of a hard Brexit, we expect to see tariffs definitely come through but we also expect depreciation of the pound, and so the net impact needs to be seen,” Chief Financial Officer PB Balaji told reporters after Tata Motors posted a quarterly loss.

While the automaker may need to correct its inventory level to an extent, it does not have any immediate plans to move production, Balaji said.

Tata Motors posted a consolidated net loss of 3.14 billion rupees ($42.47 million) for the second quarter ended Sept. 30, as retail sales at JLR, which accounts for a major portion of its profit, fell 12%.

Total revenue from operations fell 18% to 535.3 billion rupees, the carmaker said in a filing with the exchange.

The company said it had saved 600 million pounds ($782 million) during the quarter at JLR under Project Charge and was on track to achieve the full-year target of 2.5 billion pounds.


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Harley Davidson partners with Hero MotoCorp to sell motorcycles in India

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NEW DELHI: US-based motorcycle maker Harley-Davidson Tuesday partnered with the country’s largest two-wheeler maker to sell and service its products in the country.

Per a distribution agreement, Hero MotoCorp will sell and service Harley-Davidson motorcycles, and sell parts, accessories and general merchandise riding gear and apparel through a network of brand-exclusive Harley-Davidson dealers and Hero’s existing dealership network in India.

As part of a licensing agreement, Hero MotoCorp will develop and sell a range of premium motorcycles under the Harley-Davidson brand name.

These actions are aligned with Harley-Davidson’s business overhaul, The Rewire, and the company’s announcement in September to change its business model in India.

This arrangement is mutually beneficial for both companies and riders in India, as it brings together the iconic Harley-Davidson brand with the strong distribution network and customer service of Hero MotoCorp, said the latter in a statement.


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Kinetic Green plans to set up electric golf cart unit, battery swapping facility

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Mumbai: EV maker Kinetic Green is looking to set up a manufacturing facility for electric golf carts besides a battery swapping unit at an investment of Rs 1,750 crore in Andhra Pradesh, a top company official said. Kinetic Green Energy & Power Solutions, which is a part of the Pune-based Kinetic Group, had in February 2018 announced setting up of a joint venture with Tonino Lamborghini in India for design and manufacture of premium segment golf carts and other electric off-road vehicles.

“We are exploring the possibility of setting up a unit in SEZ for the golf cart project. It is in the proposal phase. It is a combination of a unit in SEZ and we are also looking at investment in setting up battery swapping (infrastructure) to promote electric three-wheelers irrespective of the brand,” Kinetic Green founder and CEO Sulajja Firodia Motwani told in an interaction.

She said the company has submitted a proposal to the Andhra Pradesh government, and it is awaiting the government’s response.

Motwani said the two projects– setting up a manufacturing facility for electric golf carts and a battery swapping unit — entail an investment of Rs 1,750 crore.

“For Lamborghini , we are looking to set up a plant in SEZ because that will allow us to have an attractive export opportunity,” she said adding that separately, the company is looking at setting up a battery swapping unit for three-wheelers.

“We are looking at these opportunities as part of our proposal,” Motwani added.

She said Andhra Pradesh is the largest three-wheeler market in the country but only for the high-speed three-wheelers.

“There is no e-rickshaw market there. So, if you have to penetrate in the high-speed market you have to have battery swapping (facility) because then the vehicle becomes very attractive.”

Kinetic Green plans to set up the battery swapping infrastructure in the key cities of Andhra Pradesh so that three-wheelers can be sold in a large number, Motwani said.

“The network that we are looking at is not only for our three- wheelers but for any brand,” he added.


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