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Skoda: Backed by new SUVs and sedans, Skoda Auto Volkswagen India eyes trebling output in 2 years

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Mumbai: Skoda Auto Volkswagen India Pvt Ltd is planning to treble output to 200,000 units in the next two years, on the back of new product launches, with the carmaker utilising the Covid-19 pandemic-induced lockdown to revamp its factory under its India 2.0 project.

The Indian arm of Volkswagen Group – the world’s largest carmaker — is also open to partnerships in the country and will continue to talk to interested parties in future, its India chief told ET, a move that will help build scale and reduce break-even points.

The carmaker is bullish on the future of the Indian market, including its exports potential, and will roll out sedans and sport utility vehicles between 2021 and 2022, said Gurpratap Boparai, managing director of Skoda Auto Volkswagen India.

Boparai said the company expects to operate the plant at 100% capacity within two years and the group garnering 3% share of the Indian market.

“We will be in the phase of ramping up production from next year. One by one, new models will be launched every six months till 2022 under the India 2.0 plan. The next year will be definitely better than this year, but we will really see our full volumes in 2022. That’s when we expect our group market share to be around 3%,” he added.

With capacity likely to be fully utilised next year, Skoda VW will explore its next phase of expansion in the country, Boparai said, but when and how soon will depend on market recovery.

“If we do a partnership, we would clearly be expanding capacity and then that capacity can be shared. There is nothing concrete at the moment (on partnership). We continue to engage with all players that have similar strategies,” he added.

The company has reportedly been in talks with MG Motor India for a contract manufacturing tie-up.

Boparai, however, declined to comment on potential partners it is in discussions with.

For years, 60-70% of Skoda VW’s total production was reserved for exports, but Boparai said that is set to reverse from 2021.

“We are very bullish about recovery in the Indian market, so we will continue to produce as much as the Indian market absorbs and then whatever is required to completely utilise our production capacity that we will export. The recovery in the exports market is rather slow, as against a V-shaped recovery we have seen here,” he said.

VW Group has so far exported half a million cars from India, the company said on Tuesday.

While the domestic market will take precedence over exports, the group is likely to start exporting Skoda-badged vehicles starting next year, expanding its global footprint for India-made cars to over 100 markets.

Backing the government’s Make in India push, Boparai said the country can gain a competitive edge on bigger car exports too by removing the sub-4 metre definition.

India is one of the most cost-efficient production bases for automobile companies, but the tax structure prefers cars less than 4 metres in length and that is taking away its competitive edge, Boparai said.

“The global market of sub-4-metre cars is roughly 7% of the pie. And that is obviously not too big,” he said.

“We understand that it will take time to transition to any new taxation regime, but there has to be some roadmap on when the cess on the two categories of cars will come down to the same number. That would really open up our industry to the segments where there is far more export potential globally,” Boparai said.


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India can beat China in low-cost manufacturing: Maruti Suzuki chairman

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NEW DELHI: India has the potential to surpass even China in low-cost manufacturing if the government and industry work in a cohesive manner, Maruti Suzuki India (MSI) Chairman RC Bhargava said on Thursday.
Bhargava also said the government should focus on increasing the competitiveness of the Indian industry.
“India has the capability to become a lower cost country than China if the industry and the government work together,” Bhargava said.
He was sharing his views on making Indian manufacturing globally competitive at an online event organized by the All India Management Association (AIMA).
Bhargava said the only objective of government policies should be to increase the competitiveness of Indian industry so that it can make things at the lowest cost along with the best quality in the world.
“The more the industry can sell, the more jobs will be created in the economy,” he noted.
Bhargava pointed out that creating jobs across sectors was important for the overall growth of the economy.
He, however, criticized states which have reserved jobs in manufacturing for locals.
“It is an anti-competitive step,” Bhargava said.
He also said MSMEs have to be as globally competitive as the large companies because the entire supply chain determines the overall competitiveness.
Bhargava also noted that the industry cannot be competitive unless the promoters and managers treated workers as partners.
He pointed out that MSI owed its success to explaining to its workers that they will prosper if the company grew and backing that with policies and actions that delivered income and career growth to employees.


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Transport Ministry begins exercise to formalise registration of vintage motor vehicles in India

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New Delhi: The transport ministry has issued a notification to formalise the registration process for vintage vehicles in the country, in a bid to preserve the heritage of old motor vehicles in India.

The ministry has proposed a fee of Rs 20,000 for a new registration and Rs 5,000 as fee for subsequent re-registration.

All applications for registering such vehicles will be applied on the “PARIVAHAN” portal of the ministry of road transport and highways. This registration shall be valid for 10 years.

The Ministry has published GSR 734 (E) on Wednesday seeking comments and suggestions in regards to amending Central Motor Vehicle Rules 1989, relating to Vintage Motor Vehicles.

“There are no existing rules for regulating the registration process of vehicles of heritage value. Through this notification the Ministry intends to formalize the registration process of the Vintage Motor Vehicles,” said a government official.

The government has defined Vintage vehicles as those two-wheelers and four-wheelers (non-commercial/personal use) which are more than 50 years old from the date of their first registration (including imported vehicle).

The definition, however, restricts any substantial overhaul of the vehicle which includes modification in chassis or body shell, and or engine.

All States registering authority will appoint a nodal officer who will process all applications for registration of vintage motor vehicles, as per the proposed rules.

Further, States will have to form a committee which will inspect a vehicle and declare whether the vehicle is fit to be registered as vintage.

The ministry has proposed to restrict the use of vintage vehicles on Indian roads.

“A Vintage Motor vehicle is allowed to run on Indian roads only for display, technical research or taking part in a vintage car rally, refueling and maintenance, exhibitions, vintage rallies, to and fro to such exhibition or car rally,” the official said, sharing details of the proposal.


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India can beat China in low-cost manufacturing if industry, govt work together: RC Bhargava

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NEW DELHI: India has the potential to surpass even China in low-cost manufacturing if the government and industry work in a cohesive manner, Maruti Suzuki India (MSI) Chairman RC Bhargava said on Thursday. Bhargava also said the government should focus on increasing the competitiveness of the Indian industry.

“India has the capability to become a lower cost country than China if the industry and the government work together,” Bhargava said.

He was sharing his views on making Indian manufacturing globally competitive at an online event organised by the All India Management Association (AIMA).

Bhargava said the only objective of government policies should be to increase the competitiveness of Indian industry so that it can make things at the lowest cost along with the best quality in the world.

“The more the industry can sell, the more jobs will be created in the economy,” he noted.

Bhargava pointed out that creating jobs across sectors was important for the overall growth of the economy.

He, however, criticised states which have reserved jobs in manufacturing for locals.

“It is an anti-competitive step,” Bhargava said.

He also said MSMEs have to be as globally competitive as the large companies because the entire supply chain determines the overall competitiveness.

Bhargava also noted that the industry cannot be competitive unless the promoters and managers treated workers as partners.

He pointed out that MSI owed its success to explaining to its workers that they will prosper if the company grew and backing that with policies and actions that delivered income and career growth to employees.


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