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Passenger vehicle sales in India increase in double digits for first time in two years: SIAM

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NEW DELHI: Passenger vehicle sales expanded in double digits for the first time in nearly two years in August, which the industry saw as the likely beginning of a positive trend after a long phase of negative growth.

As per data from industry body Society of Indian Automobile Manufacturers (SIAM), 215,916 passenger vehicles were sold last month, an increase of more than 14% from a year earlier.

Steady retail demand and easing of constraints in the supply chain helped manufacturers increase production and dispatch more vehicles to dealerships ahead of the festive season. A low base — sales had fallen 32% in August last year —also helped the comparison.

In fact, the growth would be even higher at 19.4% if the numbers from Tata Motors (18,583 units) are included.

The company now reports data to the SIAM only on a quarterly basis, but issued a statement giving its August sales numbers.

Front-Gear

Automakers in India report wholesale dispatches from factories and not retail sales made to customers. Wholesale volumes of two-wheelers increased 3% to about 1.56 million units in August. While demand for motorcycles rose 10.13% to more than 1.03 million, that for scooters fell 12.3% to 456,848 units. “We are beginning to observe growth which is instilling confidence back into the industry, especially in the twowheeler and the passenger vehicle segments,” SIAM president Kenichi Ayukawa said.

The base effect played a part, he said, but added: “Still, 14% growth of passenger vehicles and 3% growth in two-wheelers in August 2020 indicate trends of a recovery for the industry, though it is on the backdrop of pent-up demand and beginning of a festive season.”

Sales of three-wheelers fell more than 75% last month to 14,534 units. The industry “is positive that the coming festive season will pave the way for a faster revival,” SIAM director-general Rajesh Menon said.

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Biden plans to replace government fleet with electric vehicles

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President Joe Biden plans to replace the government’s fleet of cars and trucks with electric vehicles assembled in the U.S., he said Monday when signing a new “Buy American” executive order.

The government is a major purchaser of vehicles. However, replacing such a fleet with American-produced EVs will be costly and take time. There are currently only a handful of all-electric vehicles being assembled in the U.S. Tesla, General Motors and Nissan Motor produce EVs domestically, while Ford Motor and others have announced plans to do so.

“The current offerings are pretty slim, but the industry’s about to unleash an avalanche of new product, and a lot of it built in North America,” Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research, told CNBC. “Just about every U.S. plant is going to have a hybrid or electric product.”

It’s unclear if Biden’s plan includes plug-in hybrid electric vehicles, which use a combination of EV motors and traditional internal combustion engines. When discussing the plans, he referred to the new fleet being made up of electric vehicles “that are net zero emissions.”

The White House did not immediately respond for comment.

A man drives his Tesla car as the Starship SN8 of SpaceX is seen behind, days before a test launch of the company’s new super heavy-lift Starship rocket from their facilities in this small town of Boca Chita, Texas, December 4, 2020.

Gene Blevins | Reuters

Biden did not specify a timeframe for switching the government’s “enormous fleet” to EVs, which cost substantially more than traditional vehicles. He said the fleet changeover will assist his administration’s plan to create 1 million new jobs in the U.S. auto industry.

Biden also announced plans for stricter use of American-made parts in government-purchased vehicles, which will make it even more difficult to switch over the fleet. He said the current standards require a vehicle’s parts be at least 50% from the U.S. for purchase.

“The content threshold of 50% aren’t high enough and the way we measure the content doesn’t account for U.S. jobs and economic activity,” Biden said. “We’re going to change that as well. The executive action I’m signing today will not only require the companies make more of their components in America, but that the value of those components is contributing to our economy, measured by things like a number of American jobs created and/or supported.”

GM, in a statement, said it is “encouraged by President Biden’s commitment to supporting American manufacturing and looks forward to reviewing the details of the order.”

Ford, which last year launched a “Built for America” ad campaign, said it “believes that investing in America, its people, goods and services, must be a national mission.”

Tesla did not immediately respond for comment.


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Automakers welcome centre’s proposed Green Tax but transporters against it

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MUMBAI: The automobile industry welcomed the ‘Green Tax’ proposed on old vehicles by road transport and highways minister Nitin Gadkari on Monday, but transporters raised objections against the proposed tax as it may lead to increased costs for them.

According to the proposal, transport vehicles older than eight years could be charged a green tax at the rate of 10-25% of road tax at the time of renewal of fitness certificate. For personal vehicles, the tax will be levied at the time of renewal of registration certificate after 15 years. The proposal will now go to states for consultation before it is formally notified.

The automobile industry has long been lobbying for an incentive-based scrappage policy to take older, more-polluting vehicles off the roads and promote the sale of new vehicles, thus generating demand for the industry. Industry executives called the proposed green tax a step in the right direction as it will disincentivise people from using older vehicles.

“Along with this policy, the government must also institute a much more effective way of certifying the fitness of vehicles, both passenger as well as commercial,” said RC Bhargava, chairman of the country’s largest automaker Maruti Suzuki. “Currently, I believe fitness certificates are only required for commercial vehicles and not for passenger vehicles. But there’s no reason why passenger vehicles should not also be certified for fitness every two years or three years.”

Vehicles must be inspected both for the pollution they cause and their safety, he said.

“My only worry is that at the end of 15 years, if the amount (to be paid as green tax) is not large, it will not be much of a disincentive and people may continue to use polluting and unsafe vehicles,” he said.

If implemented correctly, the green tax will also be a more permanent solution than a temporary incentive-based scrappage scheme, automakers said. Examples from other countries have shown that vehicles sales tend to drop again after incentives on scrappage are eventually repealed.

“The main thing is that this will promote better technology vehicles and get polluting ones off the roads. And since it will be for a long term, it is much appreciated,” said Naveen Soni, senior VP, sales and customer service, Toyota Kirloskar Motor.

However, transporters have objected to the proposed tax as it will force them to retire their vehicles sooner than they are used to without any incentive.

“It is difficult to understand the rationale and basis of an eight-year cut off without having any scientific method of inspection in place. Merely imposing a green tax is not the way to check air pollution,” said SP Singh, a senior fellow at the Indian Foundation of Transport Research and Training (IFTRT), a lobby of transporters. “This latest proposal of putting up a green tax seems to be under pressure from the auto industry lobby.”

The policy in its proposed form will also be partly moot the national capital region (NCR) where registration certificate of older cars cannot be renewed. The National Green Tribunal in 2015 ordered to ban petrol cars older than 15 years and diesel cars older than 10 years from plying in Delhi-NCR.


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Hyundai rides high on SUV wave, bets on innovation to gain market share

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NEW DELHI: Hyundai Motor India made the most out of the SUV wave in 2020, clocking the highest-ever sales with over 1.80 lakh units. Technology and convenience made an impact on consumer behaviour. While Creta and Venue were at the brink of this development, Hyundai smells the opportunity in making the most of 2021.
High waiting periods, on the other hand, seems to be a happy headache for the Koreans. With initiatives upfront like the democratization of turbo engines and the introduction of iMT (clutch-less manual), TOI Auto got into a conversation with Tarun Garg, Director of Sales and Marketing, Hyundai Motor India to understand how exactly the automaker dodged the Covid crisis. Along those lines, Garg also shed light on the future of electrification in Hyundai, the strategy for 2021 and upcoming launches.

Ending 2020 on a high note
Hyundai Motor India’s performance in 2020 alone became the key take away from the conversation. Just before the lockdown in India, the automaker had already rolled out the Hyundai Aura and Creta. Even after the pandemic hit the nation with full force, Hyundai became one of the first automakers to resume production after a brief shutdown. During the lockdown the period, the automaker rolled out the Hyundai Venue iMT, Venue Sport and the Tucson to expand its line-up and bank on the high SUV demand. In late 2020, the 3rd-gen Hyundai i20 made its way to the market to cater to the demand in the highly competitive hot hatch segment.

By the end of CY2020, Hyundai emerged as the top SUV maker selling a little over 180,000 units capturing around 25% of the SUV market. While Creta became the best-selling SUV in 2020, Venue also contributed a good share to the overall sales.
“Hyundai banked on the current SUV trend as the segment held a market share of 29% and became the number one SUV maker in the country. Creta also became the bestselling SUV in the country again,” said Garg.
Keeping up with the evolving customers’ demand
During the conversation, Garg emphasized on the fact that customers need to be pampered with new features, new tech and versatile engine and transmissions. According to the data presented, Hyundai Creta holds an upper hand in the market due to the number of engines offered (turbo-petrol, petrol and diesel), transmissions (IVT, AMT, MT and DCT). The creature comforts offered are all a bonus. For the Hyundai i20, around 30% of the bookings are for variants with a sunroof. Connected car tech, air purifier, wireless charger and ventilated seats have also resulted in increased demand.

12:31Hyundai Creta review: Decoding diesel demand

Hyundai Creta review: Decoding diesel demand

The way Hyundai managed to offer most of the trendy features and add-ons at quite on aggressive price tag worked out pretty well for them and it reflected in the CY2020 sales figures especially in H2 and the decent increase in market share. Hyundai currently has a market share of 17.4% against 17.3% in 2019 and 16.3% in 2018.
“Our decision to offer the customers with so many engines, latest tech, and new features combined with other factors made Hyundai gain market share. Customers are much more evolved now and they’re looking at new tech and they want all this at a very reasonable price. Features like air purifier, wireless charger, connected features, ventilated seats are being appreciated now,” added Garg.
Turbo-engine democratization and the iMT demand
Hyundai has banked on the demand for the turbo engines as now customers look for performance-oriented offerings that offer a good fuel-efficiency at the same. According to the data presented, Hyundai did observe a huge adoption rate for turbo variants in 2020 and introduction of a turbo variant in the entry-level segment (Hyundai Grand i10 Nios), compact sedan segment (Hyundai Aura), hot hatch segment (Hyundai i20) and the SUV segment (Hyundai Venue and Creta) did boost the Korean automaker’s sales in the market up to some extent.

“We introduced our first turbo variant when we entered the sub-4m SUV market with the Venue. And now more than 30% of our customers opt for a turbo variant and the adoption rate is very encouraging too. Now we have a turbo variant across all the segments.”
The iMT gearbox is still a rarity in the market and is currently being offered in just three cars in India out of which two belong to Hyundai- Venue and i20. The Hyundai Venue was the first car in India to offer the iMT and the clutch-less transmission is a hit.

04:27Hyundai Venue iMT first drive review

Hyundai Venue iMT first drive review

“Customers don’t purchase an auto variant because of the pricing, fuel efficiency and some choose to stick to the manual transmission because of the feel. The iMT was introduced to bring the two-pedal tech to India to make the driving experience much more convenient and it only costs an extra Rs 22,000 compared to the MT variant. The iMT also helped Hyundai boost the sales of the Venue,” added Garg.
2021 outlook: Upcoming models and electrification
Hyundai currently has the Kona EV in its electric portfolio and the automaker is already working on boosting its EV offerings. While Garg was quite tight-lipped about the future projects, he did confirm that the Indian market would be seeing the first mass-market EV from Hyundai in the next 3 years. Until then the drive towards cleaner mobility and achieving technology leadership remain to be the key agenda for the automaker.
When asked about the 7-seater version of the Hyundai Creta, Garg said that Creta is a strong brand with 5 lakh units already sold, and the automaker considers opportunities in all segments.
“Creta is a strong brand and it has done very well in the market. I will refrain from giving any guidance on the future products but we as Hyundai have always looked for opportunities in almost all segments and we are always to open to expanding. We have done it before with Creta in the C-SUV segment, Santro in the tall-boy segment, Getz in the hot hatch segment and we’ll continue to look for opportunities in new segments,” said Garg diplomatically.
Any challenges yet?
Hyundai cars, precisely after the festive season, have been coming with an enormous waiting period. But according to the automaker, all’s well in that domain. Hyundai won’t be going ahead with an increase in production and it already has a reliable network but Garg did add that the Korean automaker is making changes in its production and supply chain to cut down the current waiting periods.
When asked about the semi-conductor shortage that has slowed the global auto industry down, Hyundai Motor India seems to have barely been touched by the crisis. Again, Garg positively said that their supply chain is quite comprehensive and all’s well at the automaker’s camp.
“Our supply chain has been very proactive and so far, the situation has been good and the demand is being met seamlessly.”


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