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Indian auto sector has opportunity to emerge as global hub, chance must not be wasted: Pawan Munjal



New Delhi: The COVID-19 pandemic presents an opportunity for the Indian automobile and components sector to become a global hub, thereby helping the country become self-reliant and such a chance must not be wasted, Hero MotoCorp CMD and CEO Pawan Munjal said on Saturday.

Speaking at the annual session of Auto Components Manufacturers Association of India (ACMA), Munjal said the auto sector can also lead the way for other industries in India in responding to Prime Minister Narendra Modi’s “clarion call” for Aatmanirbhar Bharat.

“The silver lining in this pandemic is the Honorable Prime Minister’s clarion call and push for an Aatmanirbhar Bharat — I believe that going forward we, and our sector can be the growth engine for bringing alive Atmanirbhar Bharat, a self-reliant India, by all of connecting, communicating and collaborating on multiple fronts such as innovation, engineering and R&D,” Munjal said.

Stating that India’s biggest advantage and key asset is its unique position of “having the world’s largest youth population, giving us a clear edge over many other countries”, he said, “I know, it is through the principle of Aatmanirbhar Bharat that our industry has the opportunity to become a global hub in the very near future.

“Collectively, we have to have the vision to strive to not only make it happen for our sector, we have to lead other industries into thinking like us.”

He further said, “I urge all of us here to not let this crisis to go waste. By connecting, communicating and collaborating, we can not only help each other, we can also help our nation to reach her goal of Aatmanirbhar Bharat.”

The world today is racing to develop a vaccine for COVID-19, and the process, which usually takes decades, has been fast-tracked as research laboratories, drug manufacturers and healthcare services are collaborating with each other for an antidote, Munjal said.

“A similar reliance on partnerships and collaborations is essential between Indian auto and component manufacturers and their global partners and counterparts as an antidote to stagnation and de-growth and to evolve world-class and technologically advanced mobility solutions for the future.”

For India to become the global automotive hub, Munjal said, “We must invest in technology, quality upgradation and most importantly in digitalisation in the context of today and the future.”

He also asserted that “the post-Covid reality is not a detour, it is a new highway to future growth that we must traverse with resilience, agility and innovation on the wings of connection, communication and collaboration.”

Exuding complete confidence in the ability Indian automakers and component suppliers, he said they can “race ahead in the face of adversity and together turn it into an opportunity for us”.

Equally, he said, “The government should play its part to facilitate regulatory approvals and improve logistical infrastructure, which has stymied competitiveness of Indian companies.”

Munjal also acknowledged the “other reality” of huge challenges faced by suppliers in the wake of the coronavirus pandemic and successive waves of lockdowns and the large-scale migration of workers, making availability of skilled manpower an issue.

“Additionally, they have to deal with lack of consistency in COVID-19 protocols across and within states. Even the protocols for testing for COVID-19 are not standardised. All these are affecting continuity in manufacturing operations just as productivity is impacted by the fewer number of workers on the shop floor on account of social distancing,” Munjal said.

Commenting on Hero MotoCorp’s performance, Munjal said the company has witnessed a revival in demand in select pockets over the past two months.

Sales have picked up in rural and semi-urban markets owing to the growth in the rural economy and stimulus provided by government schemes, he said.

In urban areas, due to social distancing needs and limited availability of public transportation, customers are showing a preference for personal transportation, he added.

“Our rural sales have outpaced urban sales in the first quarter of the current fiscal year. We anticipated the shift early on and prepared for that well in advance. We worked closely with our suppliers and dealers to restart our operations after the lockdown. We are now faced with the fortunate situation of having more demand than supply, and we are working closely and collaborating with our supply chain partners,” Munjal added.

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Car makers deliver over two lakh cars during festive season, post 20-30% jump in retail sales




MUMBAI: Motown’s wheels have begun to rev up this festive season – and cars are clearly winning this drag race with bikes.

With safe personal mobility goals dwarfing other consumer priorities in the Covid backdrop, sales of sedans, hatchbacks and SUVs climbed a fifth this Navratri and Dussehra as more than 200,000 buyers reached out for their cheque books.

Bike-makers, by contrast, weren’t as lucky: Sales of two-wheelers, particularly at the price-sensitive end of the market, have been marginally lower to flat. The impact of flat bike sales was visible on the stocks: Bajaj Auto and HeroMoto both lost about 6% Monday, and were among the biggest losers on the index.

But first, the good news.

Market leader Maruti Suzuki delivered its best performance in about five years by delivering 95,000 cars. Hyundai Motor India, Kia Motors, and Tata Motors, too, registered record numbers, cashing in upon the pent-up demand in the festive season. Toyota Kirloskar delivered a 13% rise in retail sales during the nine-day period.

Bookings through the season were in lockstep with the number of cars delivered, meaning Diwali and Dhanteras would be as sparkling as the Navratras.

Hyundai Motor retailed 26,068 units, a growth of 28% over last year, whereas deliveries were higher at 30,000 units for the same period, climbing a fifth from last Navratri.

Tarun Garg, Director for Sales and Marketing at Hyundai Motor India, said the positive momentum in sales of the last few months continued during Navratri and Dussehra.

“On all parameters, the numbers are very positive. Not only have the deliveries and retails grown by over 25-30% over the same period last year, but the bookings and enquiries also have been very strong, indicating that the rest of the season will be healthy,” added Garg.

The deluxe drive
At the highest end of the spectrum, Mercedes Benz India also broke into the green during Navratri and Dussehtra, delivering as many cars as it did last year. That contrasts with a 40% decline so far in 2020 for the luxury segment.

Rural demand continues to underpin car sales.

Veejay Ram Nakra, CEO for the automotive business at Mahindra & Mahindra, said deliveries were higher than last year for the nine-day festival period. Deliveries could not match demand as supplies are getting streamlined.

“We had a very healthy booking momentum pre-Navratri and Dussehra and we continue to have a very strong pipeline of bookings. Our bookings are up over 40% in SUV’s and at an overall level…, are up about 20% during the nine days of festivals,” said Nakra. “Rural continues to drive strong numbers.”

This year’s Navratri and Dussehra included one day less than the customary 10, and the festivities were preceded by Adhik Maas (or an additional month in Hindu calendar) during which some purchase decisions and deliveries were made.

In 2019, the 10-day festival period was preceded by 15 days of shradh or inauspicious period. People usually defer bookings or don’t take deliveries during the shradh.

Bikes play catch-up
Meanwhile, two-wheeler sales remained tepid in the metros and tier one cities with commuter trains and metros remaining largely out of bounds for the public, thus reducing the need for short-haul commutes from home to the nearest suburban railhead.

Rakesh Sharma, ED, Bajaj Auto, told ET that festive sales now are flat compared to the same period last year. But considering the shutdowns, he said the flat sales growth was not surprising.

“The emphasis on 30 days of festivities is overblown and its extrapolation can be misleading. The real test will be over the next few months when the heat and dust of the season has settled. That period is difficult to predict and unfortunately, we have no other option but to wait, observe and then respond,” added Sharma.

The weekly run-rate of the two-wheelers registration for the week ended October 17, 2020, was 220,029 units, data from the Vahaan platform showed. This implies that daily sales for the week before the Navratri was around 31,432 for two-wheelers.

“Navratri retail volumes may not strictly be comparable with last year’s Navratri as this year, the festival has only a nine-day window compared with ten days in the previous year, and one day in the festival period could add 50,000-52,000 of incremental sales,” said an executive at a leading two-wheeler maker.

A Hero dealer in western UP said that the Navratri sales have been a few units lower than last year’s. Steep price increases in the entry-level segment due to new emission norms and crop payment delays have put a lid on sales in the more price elastic end of the market.

A Honda dealer in Telangana said that bike sales have been surpassing last year’s Navratri volumes, and supply constraints could affect bike volumes ahead of Diwali. Scooter sales remain muted.

The month-long period between the start of Navratri and Diwali typically accounts for about double the monthly average of the year for two- and four-wheeler sales. A large part of this demand is in the North and East, which together account for 50-55% of total sales of two-wheeler and passenger cars. At its peak, though, the festive season would report 3.5-4 times the usual monthly run-rate.

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Cummins India completes BS-IV emission standard certification tests for wheel equipment




MUMBAI: Engines and power equipment manufacturer Cummins India said on Monday it has successfully completed BS-IV emission standard certification tests for its wheel equipment at the International Centre for Automotive Technology (ICAT). The new BS-IV (construction equipment vehicle) norms for wheeled equipment such as wheel loader, backhoe loaders, compactor, harvester and paver are to be implemented from April 1, 2021, and Cummins India has accomplished the task much ahead of the deadline, the company said in the the release.

The latest engine can easily be scaled up to BS-V emission norms and beyond, it said.

“As India looks to boost its economy through infrastructure growth, we are all set to evolve from mechanical to new generation, fully electronic engine systems,” said Cummins India Managing Director Ashwath Ram.

He added that these new engine systems will be powered by Cummins’ best-in-class technology and will ensure higher uptime, better total cost of ownership, easy installation and cleaner emissions and, hence, will deliver superior value to end-users.

Cummins India Vice-President (Engine and Component Business) Anjali Pandey said this new four-cylinder, 4.5-litre CEV BS IV-compliant engine system will further help Cummins enhance its presence in the construction segment while meeting stringent emissions standards and providing value to the customers.

Globally, more than one million Euro-VI/BS-VI equivalent and higher emission vehicles are running with Cummins’ engine and after-treatment system, the company said.

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gst: Govt support in GST cut to aid entire PV industry: Tata Motors




NEW DELHI: Any kind of support from the government in terms of GST reduction would help the passenger vehicle segment immensely as it would negate some of the price increase in vehicle prices due to the shift to stricter BS-VI emission norms, according to a top Tata Motors executive.

In an interview with PTI, Tata Motors President, Passenger Vehicles Business Unit, Shailesh Chandra said the reduction in vehicle prices would even help end customers who have been facing various pressures owing to the current state of the economy.

“Due to this transition from BS IV to BS VI, there has been a significant escalation in cost. In these trying times customers are not very confident about the outlook how the future is going to be including their salaries and jobs.

“On top of that there has been an increase in vehicle prices. It definitely impacts the industry immensely and any support by the government to reduce GST to offset some of the price increase will definitely boost the whole PV industry,” Chandra noted.

He was replying to a query whether lowering of GST would help revive the industry.

The Indian automobile industry leapfrogged to BS VI emission standards from BSIV from April 1 this year.

While auto companies put in around Rs 40,000 crore to upgrade their facilities and products, the auto components industry chipped in with an investment of Rs 30,000 crore for the same.

Chandra said there has been a significant escalation in cost due to the transition from BS IV to BS VI emission regime.

“It (reduced GST) will help consumers who are going through low buying sentiments because of uncertain and precarious outlook for the economy and their source of income. So definitely it will be helpful to boost the volumes for the passenger vehicle industry,” he said. Currently, automobiles attract GST of 28 per cent with additional cess ranging from 1 per cent to 22 per cent.

When asked about the electric vehicle segment, Chandra said the government has done its part and it was now up to the ecosystem players to participate in the process.

“As far as the government is concerned, the trust they have been bringing to electrification is something which very few governments across the world have done. Significant capital has been diverted towards the FAME scheme and others including charging infrastructure and R&D,” Chandra said.

It is now up to the manufacturers now to scale up their operations, he added.

“Government has done a lot and the only thing that the government can consider is giving FAME scheme benefits to the personal car segment as well. Incentives currently are being directed towards shared mobility and it is not gaining traction as during the pandemic the fleet segment has got impacted a lot,” Chandra said.

Personal car segment is 90 per cent of the industry and even a lower penetration of this 90 per cent segment would bring more visibility to the electric segment in the country, he added.

“Demand can be triggered through personal segment. Keeping that in mind if FAME incentives are also provided to personal segment electric cars which meet the criteria of price, localisation, range it will just accelerate the process of electrification in the country,” Chandra noted.

Tata Motors currently sells Nexon EV and two trims of Tigor with different range outputs. During the July-September quarter, the company has sold over 900 electric vehicle units. Since January, over 1,500 units of the Nexon EV have been sold.

“We believe in the future of electric mobility. We already have two versions of Tigor, we have Nexon EV, and we have announced Altroz EV, something which we are working on. There will be additional versions and products which will come in the coming years,” Chandra said.

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