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Luxury carmakers bet on ‘affordable’ wheels to drive out of slowdown

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(This story originally appeared in on Oct 16, 2020)

NEW DELHI: Luxury carmakers are driving up affordability to win over customers. As the industry passes through a challenging period, exacerbated by the pandemic and economic slowdown, companies such as Mercedes-Benz, Audi and BMW — the German trio that dominate the Indian luxury car market — are now introducing ‘entry-level’ models to widen their appeal and attract a fresh set of buyers.

Audi, which can claim credit for setting up the foundations of luxury SUVs in India under its Q badging, is hopeful of making a splash with the Q2 mini that it expects will more than fill the gap created by the absence of its popular Q3. The Q3 has been missing in action as the company is yet to introduce the BS6 version in line with the upgradation in the emissions standards from April this year.

SUVs have been the most popular body style across price points, including the under Rs 10-lakh category, and Audi hopes that its new offering will help it gain some market share at a time when the company is passing through one of its toughest periods ever. The Q2, however, will be offered only in petrol version, leaving many enthusiasts — who love diesel for the driving punch and long drives — out of its ambit.

Mercedes-Benz, which discontinued the A-Class hatch and the CLA entry sedan, is now gunning for younger buyers with the A Class sedan, which it had also showcased at the Auto Expo held at Greater Noida earlier this year. The A-Class will likely be priced upwards of Rs 35 lakh. BMW also put its hat in the entry luxury ring with the 2-Series Gran Coupe, which it will be producing at its facility in Chennai.


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Tractor sales may grow 10-12 pc in FY21 due to strong rural income: Ind-Ra

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MUMBAI: Tractor sale volumes are expected to grow 10-12 per cent this fiscal over the previous year primarily driven by a strong rural income owning to solid rabi crop harvest, ratings agency Ind-Ra has said.

Moreover, government initiatives in the form of a hike in minimum support price (MSP) for kharif crops and increased budgetary allocation under MGNRES are supporting rural income, it said in a report.

According to Ind-Ra, the segment volumes in 2021-22 are estimated to stand at a high single to low double-digit rate on account of four consecutive good crop harvests, translating into higher cash flows for farmers.

During April-September period of this fiscal, tractor sale volumes grew 10 per cent year-on-year, the report stated, adding three consecutive good crop harvests and a likely strong harvest of kharif 2020 will spur demand for tractors over the remaining FY21-FY22.

Agricultural activities, being under essential commodities, were least impacted by the nationwide lockdown. Also, until date, the spread of COVID-19 has been limited in rural areas, thus not impacting the labour force and the overall production levels, it said.

Ind-Ra also said it expects the agriculture sector to grow better at 3.5 per cent than the overall economy for the second consecutive year in 2020-21 after a 4 per cent growth in the fiscal compared to the overall growth (gross value added) of (-) 12.2 per cent, it said.

As around 80 per cent of the tractors sold are used in the agriculture sector, tractor sales usually move in tandem with agricultural GVA, it said adding in 2019-20 there was a gap in these metrics where agricultural GVA grew, but tractor sales fell.

With the two consecutive years of better agricultural GVA growth, tractor sales are likely to benefit over FY21-FY22, Ind-Ra said.

It also said that in the period between June 1 to September 30, the country recorded above normal rainfall of 109 per cent of its long period average (LPA). This is higher than the Indian Meteorological Department (IMD) prediction of 102 per cent for 2020.

Also, except northwest India, all regions of the country received rainfall higher than the normal.

However, given that the northwest region has a high irrigation coverage, rainfall deficiency is unlikely to impact the agricultural output.

The adequate pre-monsoon rainfall followed by the timely arrival of the monsoon in most part of the country and above-average rainfall have led to an year-on-year increase in the total kharif acreage, the report said.

Moreover, the central government has taken several initiatives to improve farm income including amending Essential Commodities Act, deregulation of mandis, allowing inter-state trade and increasing MSP for kharif crops, the report said.

Various state governments have also provided loan waivers to farmers, subsidised loans and moratorium, as well as incentives to the farmers to opt for farm mechanisation to boost rural income.

Furthermore, the tractor industry would be transitioning to new Tractor Emission Stage IV norms in a phased manner, unlike the auto industry which adopted new regulatory norms completely on a specific date.

Tractors over 50 Horse Power (HP) were proposed to switch to new emission norms from October this year, which was however, deferred by an year. This would provide a breather to original equipment manufacturers (OEMs) which were grappling with the supply chain issues until now as well as to consumers for whom the pricing would have gone up significantly, Ind-Ra said.

According to the report, while for banks, tractor financing falls under priority sector lending, non-banking finance companies too are willing to lend due to a longer instalment period for the asset class than for most other types of loans and good crop during the current season.

Improved farm income should also help lower delinquency levels, thus improving asset quality.


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Mahindra First Choice Wheels launces 50 new franchise stores across India

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Mumbai: Multi-brand certified used car firm Mahindra First Choice Wheels on Friday announced the launch of 50 new franchise stores across India amid a growing preference for personal mobility post the pandemic. Haryana, Uttar Pradesh, Rajasthan, Bihar, Maharashtra, West Bengal, Punjab, Kerala, Tamil Nadu are some of the states where the new retail stores have been set up, Mahindra First Choice Wheels Ltd (MFCWL) said in a release.

Each of the new stores will offer used car buying and selling, 118-point inspection report, warranty on Mahindra Certified used cars, easy finance, and hassle-free RTO transfer, among others, it said.

Despite a slowdown in the economy due to the ongoing pandemic, MFCWL has continued to grow and expand its store network on the back of demand from customers who want to own private vehicles vis-a-vis using public transport because of health and safety concerns, said the release.

“Used cars, with their attractive pricing and good quality, remain a viable alternative for a large section of customers looking to purchase a car, especially in a challenging economic environment.

“This trend is a lot more predominant in Tier II/III India which is why we are expanding our footprints rapidly to the remotest of cities,” said Ashutosh Pandey, Managing Director and Chief Executive Officer, Mahindra First Choice Wheels Ltd.

All franchise owners have access to technology, training, software, branding and marketing, the company said.

To address the hygiene and sanitisation concerns, the company will provide a sanitation kit with each car sold at its stores — containing two face masks, a pair of gloves, car disinfection spray and a hand sanitiser — along with a step-by-step manual on the process to be followed to sanitise the vehicle, the company said.

With this latest expansion, the company has further consolidated its market leadership in the organised used-car segment, it added.


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Hyundai i20: 12 years on, Hyundai’s faith on i20 turns it into trendsetter

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NEW DELHI: The 3rd-gen i20 is just a couple of days away from hitting the Indian roads. A hatchback that has been quite popular since its Indian debut in 2008, now makes its sleekest transition into its boldest avatar yet.
We take a closer look at the Hyundai i20’s Indian journey spanning over 12 years and 3 generations and how every transition of the premium hatchback manages to strike a chord with the market.
First gen- A unique approach
The Hyundai i20 was one of the first premium hatchbacks to hit the country even when the particular segment was not so trendy. The i20 was initially designed to let Hyundai capture the European subcompact B segment which was quite competitive back then, but surprisingly, the hatchback did win hearts in India too.

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The Hyundai i20 was designed in Germany and adopted the Korean automaker’s ‘Fluidic Sculpture’ design language and featured styling and architecture which was quite ahead of the curve in India. Compared to the hatchbacks now, the first-gen i20 was quite boxy and with generous spacing for passengers.

Ranging between Rs 4.81 lakh – Rs 7.53 lakh (last recorded price), the i20 came with both petrol and diesel options. The 1.4-litre Gamma petrol engine offered 100 PS of power and 139 Nm of torque and the 1.2-litre Kappa diesel engine offered 80 PS of power and 114 Nm of torque. The engines were mated to a 4-speed AT or 6-speed MT. The hatchback had a good run with one facelift down the line until it phased out in 2015.
Second gen- A bolder approach
The second-gen of the hatchback entered the Indian market as the Hyundai Elite i20 in 2014. The Elite i20 took on the mantle quite gracefully. Designed in Germany, this car adopted the ‘Fluidic Sculpture 2.0’ design language. The Elite i20 had an enhanced appeal inside-out and boasted better safety features to woo the audience.

Apart from the good passenger space, the Elite i20 also sported a black and beige dual-tone dashboard, steering mounted controls, Bluetooth integrated audio with USB and AUX and 1 GB internal storage at a time when the Indian audience was not used to the pampering in terms of the features offered.

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The Elite i20 offered 3 engines across its span of 6 years. The 1.2-litre petrol engine offered 83 PS of power and 115 Nm of torque and was paired with a 5-speed MT. The 1.4-litre petrol engine offered 100 PS of power with 132 Nm of torque and was paired with 4-speed AT. The 1.4-litre diesel engine offered 90 PS of power and 220 Nm of torque and was paired with a 6-speed MT. Ranging between Rs 6.57 lakh-Rs 8.33 lakh (ex-showroom), the premium hatchback had quite a decent run until it was silently bid farewell by Hyundai to make way for the all-new i20.
Third gen- Keeping up with the times
The 3rd-gen Hyundai i20 is definitely the best version of the hatchback brand India will get to see but it would be unjust to call it a breakthrough in the segment like its predecessors were. It is safe to say that the Korean automaker is a little late to join the party where the competition between the premium hatchbacks is turning fiercer every day.

The all-new i20 adopts a whole new ‘Sensuous Sportiness’ design language by the automaker and totally discards the boxy appearance of its predecessors. The new avatar looks quite aerodynamic and features much sleeker details. The sharp headlamps with DRLs and the LED foglamps give the hatchback an aggressive character. The elevated hood with strong character lines and the black accents on the front grille give the car a slightly muscular look.

On the inside, the hatchback looks even more appealing with neon accents and the large touchscreen display. If we were to go by the concept images, the interior looks quite spacious as well, sticking to the originality of the i20 brand. The hatchback is also set to boast the 1.2-litre petrol, 1.5-litre diesel and the 1.0-litre turbo petrol engines under the hood, offering as many options as possible.
Expected to boast a price tag ranging between Rs 5.7 lakh – Rs 10 lakh (ex-showroom), the hatchback will take on the likes of Maruti Suzuki Baleno, Tata Altroz, and the Toyota Glanza upon its arrival on November 5.
The 3rd-gen Hyundai i20, although a little late, has all the qualities to become a trendsetter and carry on the legacy of the brand. With 3 engine options, new Bluelink connected features, Hyundai’s SmartSense features and sharp looks, the i20 will be a tough competitor to take on in the segment. The question that needs to be asked is how will the Indian market receive this premium hatchback, especially where offerings like Maruti Suzuki Baleno RS and Fiat Punto Abarth faded away with time even after being ahead of the curve.
Head to TOI Auto for more news, views and reviews


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