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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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MSSL signs strategic agreement to acquire Bombardier’s Electrical Wiring Interconnection Systems business

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New Delhi: Auto component major Motherson Sumi Systems Limited (MSSL), via its Mexican subsidiary, Motherson Rolling Stocks S. de R.L. de C.V. (MRS), Tuesday said it has signed an asset sale and purchase agreement to acquire the activities of Electrical Wiring Interconnection Systems (EWIS) performed at Bombardier Transportation’s manufacturing site in Huehuetoca, Mexico (BT Ensambles México) .

MRS is part of the Motherson Rolling Stock Division which designs and manufactures electrical cabinets, power packs and electrical distribution systems for leading rolling stock manufacturers.

MSSL, through PKC Group (acquired in March 2017), is engaged in the manufacturing of wiring harnesses for rolling stock, mainly in Europe and the Americas region. In 2019, the company through its subsidiary Motherson Rolling Stock Systems GB Limited, UK (MRSS) acquired Bombardier’s UK rolling stock electrical component and systems business in Derby. Now, with the execution of this definitive agreement between MRS and Bombardier, the relationship will expand to Mexico.

The transaction includes the transfer of assets, employees and inventories, on a debt-free and cash-free basis and is valued at around $ 10 million approx. (subject to customary adjustments). The revenue of the said business was $ 25 million for calendar year 2019. The transaction is subject to customary closing events and expected to complete in Q4 FY20-21.

BT Electrical Wiring Interconnection Systems (EWIS) provides world-class harnesses and electrical assembly based on standard solutions. MRS will continue manufacturing the same electrical harnesses product as today at the Huehuetoca site in Mexico with enhanced efficiency in time-to-market, on-time delivery and cost structure. Both companies are now working on the smooth transition of employees and business, to mitigate any potential impacts and expect to close the transaction in Q4 FY20-21.

Vivek Chaand Sehgal, Chairman, MSSL said, “Our focus is always on adding value to our customers’ supply chain and catering to their requirements. This is another step forward in that direction. We are further strengthening the relationship with Bombardier under the global partnership agreement and our collective strength will position us as a preferred solutions provider to our customers in the rolling stock business.”

“The acquisition of the business will enable us to be a truly global partner to our customers as we get the opportunity to serve them in the North American market”, said Andre Gerstner, President, Rolling Stock Division, PKC Group.

“The global rail market is extremely dynamic and has become increasingly competitive. Bombardier Transportation aims to enhance its adaptability and agility to changing market conditions, in order to continue to increase its competitiveness and improve its global footprint. This divestiture is in alignment with our global transformation strategy of reducing the activities to our core- and integrating competencies”, said Jim Vounassis, Chief Operating Officer, Bombardier Transportation.

“The transaction is beneficial to both parties since Bombardier has been seeking to establish a long-term supplier partnership for electrical harnesses and assemblies in the Americas region and MRS is an excellent strategic partner for this”, added, Elliot G. Sander, President, Americas Region, Bombardier Transportation.


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GM to invest more than $2 billion in the U.S. to increase EV production

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Engines assembled as they make their way through the assembly line at the General Motors (GM) manufacturing plant in Spring Hill, Tennessee, August 22, 2019.

Harrison McClary | Reuters

General Motors is investing more than $2.2 billion in its U.S. manufacturing operations, largely to increase production of electric vehicles, the company announced Tuesday.

The investment is the latest for the Detroit automaker as it pivots toward EVs under GM CEO Mary Barra’s “triple zero” vision of zero crashes, zero emissions and zero congestion — an overarching goal for the company.

Since March 2019, GM has committed to invest more than $4.5 billion in three U.S. manufacturing sites to prepare for EV-related production. The company has previously said it plans to release at least 20 new electric vehicles globally by 2023, including the upcoming GMC Hummer EV, which will be unveiled Tuesday night.

“We are committed to investing in the U.S., our employees and our communities,” Barra said in a statement. “These investments underscore the success of our vehicles today, and our vision of an all-electric future.”

Shares of GM were up about 5% on Tuesday ahead of the Hummer unveiling and as BofA Securities said GM’s “sold business plan” is not reflected in the company’s stock price.

The more than $2.2 billion in new investments will occur in the coming years, according to the company.

Roughly $2 billion of that money will go toward a plant in Spring Hill, Tennessee, for production of future electric vehicles, including the recently unveiled Cadillac Lyriq crossover. Renovation work at the facility, which will be GM’s third in the U.S. to produce EVs, will begin immediately, according to the automaker.

In connection with the announcement, GM will eventually move production of the GMC Acadia from the Tennessee plant to a facility in mid-Michigan. The company said it will invest more than $100 million at the Lansing Delta Township plant for assembly of the next-generation Acadia crossover at an undisclosed time.

Separately from EVs, GM on Tuesday also announced new investments of roughly $53.3 million at four plants in Michigan to increase production of its heavy-duty pickup trucks, self-driving Cruise AV test vehicles and 10-speed transmissions.


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Etrio launches e-three-wheelers for cargo segment, price starts at Rs 1.7 lakh

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New Delhi: Electric vehicle start-up Etrio on Tuesday announced its foray into e-three-wheeler space with ‘Touro’ range of products with prices starting at Rs 1.7 lakh, catering to the cargo segment. The passenger variants of the electric three-wheelers will be rolled out soon. The company had raised funding of USD 3 million (over Rs 20 crore) last month to facilitate these launches, Etrio said in a statement.

“Currently, Touro is undergoing pilot runs at leading e-commerce logistics companies in Hyderabad, Delhi and Bangalore,” it said, adding that the passenger variants of the new electric three-wheeler shall be launched in the next few months during which the company plans to set up its dealership network in select locations.

The company is introducing Touro Max and Mini range of electric-three wheelers focused on intra-city logistics especially in last mile delivery applications.

Touro Mini is powered by a 4kwh lithium-ion battery with 2.5kw peak power motor. It has a maximum payload of 400 kg with a top top speed of 25 km/hr.

On the other hand Touro Max has a 8kwh lithium-ion battery with 8kw peak power motor. It has a maximum payload of 550 kg with top speed of 45 km/hr.

“With the launch of Touro, we now have added new electric vehicles to our portfolio of retrofitted products. We are on a mission to electrify Intra-City logistics and bring the widest range of electric vehicles tailor made for this segment,” Etrio Co-founder & CEO Deepak MV said.

He further said the Touro range is equipped with features, including hydraulic brakes with regenerative braking, independent suspension, cloud-based vehicle tracking equipped with driver mobile app, among others.

“While primary focus remains on vehicles with advanced lithium-ion battery technology, Etrio also has a certified product range with lead acid to cater to a range of end users,” Deepak added.

Etrio said Touro Max and Mini would be available on both sales and leasing options with leasing to be offered to organisations for orders of over 50 units over a three-year contract. It is looking to scale up the deployment of Touro across the country through a mix of outright sales and leasing models.


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