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Require long-term regulatory roadmap to increase automobile sector contribution to GDP: NRI India

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A long-term regulatory roadmap is required for the automobile industry to grow and increase its contribution to GDP to 12 per cent from the current 7 per cent, according to a report by Nomura Research Institute Consulting and Solutions India (NRI India). While the government plans to bring Indian automotive industry at par with developed nations in safety and emission regulations, the report said there is a need to study regulations in Indian context as conditions in the country are different from developed nations in many aspects.

“The Indian automotive industry has kept pace with these changes and in recent years has undergone a number of changes in the domain of passenger safety, emission control and connected technology.

“One such highlight is leapfrogging from BS-IV to BS-VI emission norms and hence achieving parity with Euro emission norms,” the report said.

In addition to the positives these changes have brought to the Indian market, they have also brought Indian automotive industry at par with the developed regions like Europe, Japan and the USA.

Further, the much needed amendments to the Motor Vehicle Act (MVA) have been commendable steps by the government of India, it said.

“However, there have been many instances where regulations are enforced without adequate lead-time and deliberations. It may be important to study the regulation formulation process adopted by global agencies and take learnings for deciding timeline and lead-time for regulation implementations,” it said.

The NRI India report further said that for fulfilling the government’s GDP targets, the auto sector will be playing a pivotal role by increasing its contribution to GDP to 12 per cent from current 7 per cent.

“In this journey for ensuring growth, interests of young and aspirational consumers from various strata of the society need to be kept in mind,” it added.

The report said the government intends to implement some future regulations to keep pace with the developed countries in terms of emissions, fuel economy and safety.

“However, in absence of a clear roadmap, it becomes extremely challenging for the industry to adopt new technologies and comply with regulations at an affordable cost.

“A holistic long-term roadmap will not only help industry to prepare well for future but also help attract investments for local development of technology in India to promote #AatmaNirbharBharat mission,” it said.

Highlighting the need for study of regulations in Indian context, the report said while the government’s vision to bring Indian automotive industry at par with the developed nations in safety and emission regulations is praiseworthy, it should be acknowledged Indian conditions are different to the developed nations in many aspects.

“Economic status of consumers, price sensitivity, number of cars per 1,000 individuals, technology and infrastructure development and driving behaviour are some of the areas which differentiate India from the other countries,” it added.

Despite being one of the biggest automobile markets globally, automobile penetration in India is still only around 3 per cent as compared to China with 18 per cent, Japan around 60 per cent, and over 80 per cent and 90 per cent in the UK and the US respectively.

“This low penetration indicates India’s growth potential. Implementing multiple regulations at a time will increase the prices of the vehicles leading to subduing growth in the price sensitive Indian market, which can be detrimental for India’s overall economic growth,” the report pointed out.

To avoid such a scenario, it said, “A visionary roadmap with clearly laid out timelines will provide clarity to the entire automotive industry. It will provide sufficient time for infrastructure development and enable OEMs (original equipment manufacturers) and suppliers to plan the development time and costs judiciously.”

With such planning, OEMs will also be able to spread the price increases gradually to prevent consumers from a price shock, allowing sales to flourish along with technological developments.

“To ensure the prosperity of the nation and the industry, it is essential that we ensure that affordability of vehicles for consumers remains intact,” the report added.

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Ceat expedites investment in capacity as tyre demand makes a sharp recovery

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Mumbai: Ceat will move quickly to expand capacity and resume frozen capital expenditure, buoyed by the sharp recovery in tyre demand, its top executive said.

The RPG Group-owned tyre maker will invest about Rs 1,200 crore to increase production capacity over the next 18-24 months, as part of a four-year, Rs 3,500-crore capex plan, which it had put on hold due to the Covid-19 pandemic last year after pumping in over Rs 2,200 crore.

Production is high across plants and there has already been a capacity constraint for farm equipment tyres and a brief shortage of two-wheeler tyres during Diwali, Anant Goenka, managing director of Ceat Ltd told ET.

“Utilisation levels are high. We have done a large investment and those expansions are happening now. It has been fortunately well-timed,” Goenka said.

Goenka said there were concerns within the company in April last year at the onset of the virus outbreak over the returns on investments in plant capacity as sales nosedived during the lockdowns and short term outlook was bleak, but that “things bounced back quite well and quite fast.”

The company is investing in doubling passenger car tyre manufacturing capacity to 40,000 a day. Already, 5,000-6,000 tyres of the new capacity are being manufactured a day, and the remainder will be achieved in the next 9-12 months, he said.

The company expects exports to double over the next 2-3 years with a sharp focus on Europe. It has also benefited from restrictions on import of tyres since June this year, which has opened up about 3-5% of the market earlier cornered by tyres from abroad, Goenka said.

Leading global tyre maker Michelin said in a letter to dealers last week that it would not be able to supply passenger car tyres till the government eases import restrictions. This is expected to further aid the business of local tyre makers such as Ceat.

The company recorded its highest-ever revenue during the December quarter and expects the momentum to continue into the next two quarters.

“Covid-19 is done and dusted in terms of saying ‘we are going back to pre-Covid-19 levels’. This quarter (Q3) has been our highest ever in terms of revenue and the same was true in the previous quarter as well, and that too in an environment where the new commercial vehicle market is depressed,” Goenka said.

Commercial vehicles sales, which were depressed even before the outbreak, have yet to bounce back.


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Okinawa Autotech plans to invest Rs 150 crore to set up new manufacturing unit in Rajasthan

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New Delhi: Electric two-wheeler maker Okinawa Autotech plans to invest Rs 150 crore in setting up a new manufacturing unit in Rajasthan, and roll out fresh products as it sets a target of selling 1 lakh units in the next fiscal year, according to a top company official. The company, which had recently launched B2B electric two-wheeler – Okinawa Dual, priced at Rs 58,998, targeting the delivery sector, expects sales from the segment to account for around 20 per cent of its total sales.

“We are coming up with a new facility and new products. The total investment in the next fiscal year will be around Rs 150 crore,” Okinawa Autotech Managing Director and Founder Jeetender Sharma told .

The new manufacturing unit will be near the company’s existing plant in Rajasthan.

“The new facility will have an annual capacity of 5-6 lakh units in the first phase and can go up to 10 lakh units in future,” Sharma added.

When asked about new products, he said the company is targeting both the B2B and B2C segment.

Last week, Okinawa Autotech launched its Okinawa Dual, powered by a 250 Watt electric motor with 48W 55Ah detachable lithium-ion battery with a range of 130 km on a single charge. It has a top speed of 25 kmph.

Sharma said the COVID-19 pandemic has accelerated the rise of e-commerce and last-mile deliveries. It has become imperative for businesses in the delivery segment to innovate, reduce operational costs, and increase efficiency consistently, and Okinawa Dual will address that need.

The company will launch its high-speed motorcycle codenamed OKI100 in the first half of this year, he added.

On the sales front, he said Okinawa Autotech would close in on cumulative sales of around 1 lakh units by the end of the ongoing fiscal since it started operations in 2017.

“In FY 21-22, whatever we have done so far, we will double the number with the coming in of two-three new models. It is a fair estimate that we will sell around 1 lakh units next fiscal,” Sharma said.

Of the total, he said the B2B segment would account for around 20 per cent.

Bullish on the electric two-wheeler segment’s growth, Sharma said with the transition to BS-VI emission norms, prices for conventional scooters and motorcycles have gone up, thereby reducing the gap with electric counterparts, and Okinawa Autotech has focussed on localisation to be cost-competitive.

“We have more than 92 per cent localisation till date. In the next quarter, we are going to be 100 per cent,” Sharma said, adding although the battery cells coming from outside the company have a dedicated supplier in India supplying it the battery packs.


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2021 Toyota Fortuner facelift: First impression

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NEW DELHI: A decade-old Fortuner has the same impact on the audience even as a handful of carmakers tried their luck in the domain. In its first launch of the year, Toyota Kirloskar Motor has shunned its protractors, ensuring the facelift is more powerful and torquey, with better creature comforts and design changes, which are not abrupt.
This time around, the Fortuner has arrived on our shores along with the special edition Fortuner Legender. The latter is yet to reach most dealerships, and we got our hands on the facelifted Fortuner.

Surprising or not, the face of the new Fortuner will put you in doubt. I mean the deep association of chrome and customer preference is no hidden fact. The tri-slat chrome bars are disposed, and the face is now given a piano black treatment. Chrome eyelashes flowing over slightly redesigned headlights dive in and flank the grille. The piano black has also made its way into the fog lamp housing, consuming a good amount of space under the main lights. The face appears more upright and replacing the chrome with black elements has actually tailored a better contrast and sharper aesthetics.
Fortuner sits on 19-inch rims. The 4X2 and 4X4 variants come with dual-tone machine-cut alloys and stylized alloy wheels respectively. The former with dual-tone cut created a better impact, especially due to visual contrast. The revised tail lamps are sleeker, slit and the dual tube light set up look better than before. The rest of the silhouette, dimensions and proportions of Fortuner continue to look the way they used to.

On the inside, the Fortuner sports an all-black theme for the first time. The electrically-adjustable front seats ensure no sweaty back during summer, thanks to the newly-introduced ventilation feature. The steering wheel is as hefty as before and the white stitching ups the premium feels. Soft touchpoints on top of the dashboard, door panels and other places of contact are finished with great care.

The 8-inch infotainment holds a big surprise. The look and feel have changed slightly but Fortuner has become a connected SUV now, offering features like geo-fencing and vehicle immobilization. The 4X4 variants also offer a JBL sound stereo.

Toyota Fortuner is the only car in the segment that offers a petrol offering (barring Volkswagen Tiguan AllSpace). The 2.7-litre petrol and 2.8-litre diesel are the largest in the segment in terms of output figures and displacement. A 5-MT and 6-AT are available with both the powertrains. The 4X4 option, however, is limited to diesel, which in fact now offers three drive modes instead of two.
The waiting period in Delhi for the petrol variants ranges between 10 weeks to 18 weeks. Diesel 4X2 has a waiting period of 8 weeks to 12 weeks while the 4X4 has between 10 weeks to 18 weeks.


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