How many of us are tempted to drive down to Pondicherry to register their cars or bikes there? I am sure quite a few of us, that is because a Ford Figo‘s on-road price is Rs. 5,59,236/- in Pondicherry, while the on-road price of the same car and variant is Rs. 6,26,031/- in Mumbai. The price difference of Rs. 66,000/- is quite shocking and the sole reason for this is the difference in road tax rates between the two states. If a proposal by a panel of highways ministry is accepted, then the on-road price of all cars and taxis in India will be more or less the same.

Currently road tax rate on cars is anything between 2% to 18%, which is a big difference considering how expensive cars have become. This has led to people buying vehicles from other states to save on road tax. This temptation of paying lower road tax has its shortcomings as police officials are becoming stringent with vehicles registered outside the state, fining them in large amounts. The Transport Development Council will be discussing this proposal today and if it goes through, we can the on-road price of cars to become cheaper in the metros. Fingers crossed!

The current Indian auto market is riding high on MPVs, SUVs and sedans with diesel powertrains but it looks like things might change in the near future. The government has been asked to increase the prices of luxury diesel cars and SUVs and sedans by imposing an additional tax of Rs. 1.62 lakh per vehicle. This raise in pricing has been communicated in letter to the Finance Minister by Centre for Science and Environment (CSE) keeping in mind the upcoming Union Budget. Led by Ms. Sunita Narain, the environmental agency has asked for an additional duty of Rs. 1.62 lakh on private diesel cars above 1400cc category and Rs. 81,000 for the cars below this category.

According to CSE, levying this additional tax will help the government in offsetting the gap between petrol and diesel fuel prices in India, a thing every consumer has been complaining about. CSE apart from talking about levying extra tax on diesel cars has also challenged the SIAM report’s claim that diesel consumption by private cars was a meagre 0.6% of the total diesel consumption. The SIAM report also contradicts the Kirit Parikh Committee report that puts private diesel consumption at 15% as of February 2010. CSE has also mentioned in the letter that diesel cars are 40% of the new car sales already and about 40% of the total diesel powered cars are sold of above 1500cc range.

SIAM retorted back the CSE’s challenge claiming that their report was based on primary data from Planning Commission while CSE wasn’t so. SIAM also clarified about the “others” segment who are using diesels telling that the “others” include Railways and power generators, gensets used in residential blocks, building sector and many other industries. If we talk about emissions, diesel emits higher quantities of NOx and particulate matter which is totally absent in petrol vehicles. However, petrol cars have higher percentage of carbon-dioxide. SIAM has also stated that the with the introduction of BSIV norms, the particulate matter quantity has come down drastically.

Source – TheHinduBusinessLine

The year 2011 has seen a lot of action in the game of pricing of petrol and diesel in the Indian market. The government had increased the prices for countless times last year and also decreased it sometimes by a small marginal value. Petrol faced the whole brunt of the fuel hike after it was deregulated by the Government. The oil companies relentlessly increased the petrol prices to gain from this special move by the government. The difference between petrol and diesel prices became so high that the consumers ditched petrol and turned towards buying of diesel vehicles. Diesel, being a sensitive fuel as it is used widely by the entire transportation network of the country was not messed with from the Govt side in regard to its pricing. Diesel cars went on to become so popular that the OEMs drew up new plans to launch only diesel vehicles and set-up diesel engine manufacturing units to meet up the demand.

However, the year 2012 is likely to bring in some change to this scenario. Though the Govt is still not able to come up with a suitable market linked pricing regime for diesel fuel, it has come out with a simple, textbook strategy; levy more excise duty on diesel cars. The petroleum ministry has sent a proposal to the finance ministry to raise the excise duty on the diesel cars to part fund the losses of state-owned oil companies on selling diesel at below-market price. Currently the oil companies suffer under-recoveries of Rs 11.51 per litre of diesel, which amounts to an estimated Rs. 74,317 crore in 2011-12 alone. The Parikh Committee, headed by Kirit S Parikh has recommended an additional excise duty of Rs. 80,000/- on diesel cars when the upcoming Budget 2012-13 is announced.

The German technology major, Bosch is planning to invest close to Rs. 2200 crores in the Indian market in the current fiscal year 2012-13. Announcing this at a press conference held in Delhi today, Dr. Bernd Bohr, Chairman of the Automotive Group and Member, Board of Management Robert Bosch GmBH said that the aforementioned investment would take place for capacity augmentation, diversification and new technology development. The sum would be spent over a span of 2 years to carry out these activities with a major chunk of the money going into the expansion of the company’s local activities. Some of them highlighted were a new electrical drives plant coming up in Chennai that will be going into operation by 2012, expansion at Bosch Nasik, Jaipur and Ahmadabad facilities.

On the technology front, Bosch India is going to play a bigger role in the field of software engineering support for electronic control units (ECUs) with complete global responsibility. Bosch is also working harder in the field of safety systems with the company predicting that by 2015, more than 90% of the vehicles will be fitted with ABS as compared to only 13% in the current scenario. Also in the coming years, Bosch visualizes that radar and video sensors based complex driver assistance systems will get started to be implemented in cars to make them accident free. Robert Bosch Engineering Services and Business Solutions, the division that is develops these provides a full range of software for automotive electronics applications, and has customers in all of the world’s major economic regions.

“Despite uncertainties due to global political and economic developments the Indian economy has continued to develop strongly and is expected to see steady growth. In the automotive sector in particular, Bosch expects the number of cars per 1,000 inhabitants in India to rise to 35 by 2025, up from 12 this year. In the backdrop of such developments, Bosch would like to contribute and be part of the India growth story. This investment along with plans for expansion and development of new technologies are testimony to our commitment to the Indian market.” Dr. Bernd Bohr said.

For those who don’t know much about the company here is some quick info about it. In India, Bosch is currently the leading supplier of technology and services in the field of automotive and industrial technology. Also, India has become the hub of the largest development center of Bosch outside Germany. In total, the Bosch group has six entities in India: Bosch Limited, Bosch Chassis Systems India Limited, Bosch Rexroth India Limited, Robert Bosch Engineering and Business Solutions Limited, Bosch Automotive Electronics India Pvt Ltd, Bosch Electrical Drives India Pvt Ltd with consolidated revenue of over Rs. 11,000 crores in 2011. It has 13 manufacturing facilities and 4 development centres in India with employees over 25,000.

Indian auto market, growing at a rapid pace has taken the country ahead of brazil to make it the 6th largest automobile manufacturing nation in the world, according to Organisation Internationale des Constructeurs d’Automobiles on the basis of the first six month data of the year. Leading the pack was China followed by Unites States of America, Japan, Germany and Korea. Currently China continues to top the chart with a total production figure of 9.16 million units till June this year. Following China is US whose production figure stands at 4.27 million units. Germany and India follow closely behind them with production figures of 2.93 million units and 2.73 million units respectively. This year all the countries showed a growth in their total auto production except Japan which showed a decline of 17% decline in production to 6.71 million units due the country getting hit by the tsunami and earthquakes. Domestic sales also declined by 20% to 3.47 million units till October.

“Though vehicle sales have slowed down this year, the fundamentals remain strong. By 2017, India is likely to emerge as the third-largest market in the world after China and the US, ” Abdul Majeed, partner and head of automotive practice in the global professional services firm, PricewaterhouseCoopers.

India is expected to beat Korea, Germany and Japan by 2017 to sell close to 7 million units. Earlier it was estimated that this would take place by the year 2020 but the J.D Power market research firm speculates that the Indian auto market is going to grow 3 fold by the year 2020, a time when India would be selling close to almost 11 million vehicles. PricewaterhouseCoopers projects that India would be producing about 7 million light vehicles of up to 5 tonnes by 2017. India has clearly taken over Brazil this year with a production figure of 2.04 million units till June this year while that Brazil stood at 1.71 million units. With this, the Indian auto market has witnessed an increased market share and currently stands at 5% as compared to the earlier 4.5% of the global vehicle production. With the rapidly growing auto market in India and all the major OEMs targeting India as their manufacturing hub, the country is surely all set to take on China and US in the near future to become the largest automotive producer in the world.

The diesel cars have long been criticized by the environmentalists as being the polluters of the nature. But a recent study by the Internal Planning Commission states something else. The note states that only 0.6% of the total diesel consumed in the country is used by the diesel passenger car population. Goods vehicles consume the maximum at 37.9%, agriculture at 18.8% and buses consumer only 6% of the total amount of diesel, the note stated. The Planning Commission note pegs the usage by taxis at 2.1% and jeeps/MUVs at 2.5%. Three-wheelers account for 3.6%, power 6.8%, railways 3.7%, industry 5.6% and others 12.5%.

The note drafted by the Internal Planning Commission is yet to be made available to the public but has been shared with the Society of Automotive Manufacturers (SIAM). The findings of the note however conflict with the Kirit Parikh Committee report that states 15% of the total diesel share is lapped up by the passenger car market. According to the Planning Commission note, transport sector (public and private) has reduced its consumption of diesel from 59% in the previous 2 years to 56% in 2010-11. This is attributed to the increase in efficiency of diesel engines. All this leads us to one main question that the government is facing now; should govt increase the tax on diesel cars?

“When the overall usage of diesel by personal cars is so low, at less than 1%, where is the argument to tax them higher. The fact is that personal diesel cars are not the major beneficiaries of the government subsidy, as is made out to be,” says Vishnu Mathur, director general of Siam.

The OEMs have already raised their voice against this hike stating that it would lead to a higher slowdown of the auto industry. The Delhi govt already imposes higher registration tax on diesel vehicles and attribute it to concerns on environmental pollution caused by diesel cars.

Source – ET

In a very interesting revelation today, a bunch if Harley Davidson owners today appealed to the Mumbai traffic police to recognize helmets that have been Department of Transportation (DOT), America approved. The DOT rating, similar to our ISI rating in India is provided by the Department of Transportation based on a test in which the helmets are dropped from a height of 10 feet. A simulated head which can withstand more than 400 G of impact force is placed inside the head to measure the force of impact. The DOT rated helmets are considered as the best and one of the safest helmets to be worn by a rider.

The reason behind the plea was very simple. Last month, Mr. Arup Patnaik, the Mumbai Police Commissioner had directed the traffic department to fine all the bikers who ride without the ISI marked helmets. As a result, the traffic police personnel booked hundreds and this included owners of foreign bikes too who were wearing helmets certified by Australian, Italian and US authorities.

“The purpose of the police commissioner’s directive was to send a strong message to those using cheap plastic helmets. But the cops carrying out the order have failed to understand that helmets certified by the DOT are among the safest in the world,” said Debashish Ghosh, owner of a Harley Davidson bike.

Many people have managed to hoodwink the traffic cops though to escape away from getting booked by painting or sticking ISI logos on their helmets. This has infuriated the owners of foreign bikes especially those of Harley Davidsons. Mr. Brijesh Singh, DCP of Mumbai Traffic said that they had received an application from the Harley Davidson Owners’ Association for recognition of foreign helmets and it has been duly forwarded to the transport department which is the competent authority to take the appropriate action.

Source – ET

If you are one of those customers who is planning to buy a car but is willing to postpone it to the next month to get a new vehicle in a new year, then think again! Due to the heavy rise in demand of diesel cars and apocalyptic fall in sales of petrol vehicles and coupled with the months of November and December remaining sluggish in terms of sales, Indian auto OEMs are facing huge inventory levels at their stockyards. This has prompted them to offer aggressive discounts in their models to push sales. Thus, the month of December is turning out to be just the month to get the best bargain in the industry. However, there are no discounts being offered in their respective diesel models to take advantage of the demand for such cars.

“The discounts are quite high – our tacticals and other benefits are 22% higher than in November this year. But the discounts are only on petrol models. Our diesel vehicles are still on wait-list – the Swift diesel in fact has a 9 month waiting list. Last year, diesel’s share in the overall passenger vehicle industry was around 34% which has now climbed to 50%,” Mayank Pareek , managing executive officer (marketing and sales), Maruti Suzuki, said.

Maruti for example is offering discounts or benefits in the range of Rs. 25,000/- on its second highest selling car, the Wagon R while Chevrolet is offering discounts upto Rs. 64,000 on its Spark model that includes Rs. 53,000/- of discount and Rs. 11,000/- worth free insurance. The Aveo U-VA is being offered for a discount of Rs. 54,000/- while it is Rs. 62,000/- on the Aveo and Rs. 56,000/- on the Optra. You can own the Beat petrol for an attractive discount worth upto Rs. 21,000 plus free insurance worth Rs. 12,000/-. However, the company is not offering any sort of discounts on its diesel models like the Beat, Cruze, Tavera and the Captiva. Other OEMs like Volkswagen have continued to keep their festival offers like free insurance worth Rs. 40,000. Volkswagen is also holding the price line of its Polo and Vento Breeze versions, launched in September as part of VW’s action model strategy. These aggressive steps by the auto companies will definitely help clear some stocks from their inventories but they are not expecting any enormous sales volumes and is likely to continue like the month of November.

Project Kahn is a famous British automobile design company which does aftermarket modifications to many high end cars. Famous for its uniqueness and quality finishing, the company has now decided to set shop in India. The first Project Kahn branch will be opened at Malabar Hills in Mumbai and is later expected to expand to other parts of the country. Afzal Kahn, the founder of the company has 18 years experience in the automobile industry and has done some awesome designs on Range Rovers, Audis, Bentleys, Ferraris, Jaguars, Porsche, Rolls-Royce, etc. Some of his work can be seen below. Meanwhile you can checkout the official Project Kahn website here.

The advent of Formula 1 on the Indian soil has really brought along with it more passion for motorsport and sports cars in the minds of Indian consumers. Few niche car makers located at remote places from the din and bustle of fast running assembly lines of big auto companies are taking interest to cater to these demands and cash in on the rising interest of the people. One such company, Jayem Automotive which is based out of Coimbatore is currently a leader in the business of motorsport in India. The company is actively involved in conducting running car and rallying programmes for companies like MRF. Also, the company is known to tweak the Tata Indigo engine and bump up its power and torque figures and then supply them for rally purposes.

San Motors based in Goa, is another such company which is into the business of niche car manufacturing. The company has been selling a 2 seater convertible since 2000 in the Indian market. The 2 seater convertible employs a imported 1.2 litre Renault engine while the entire body work is done locally at its factory in Bangalore. The company is also working on a more powerful 2 seater convertible model and planning to increase its dealership base to promote sales. Premier, the car maker known for its Padmini is also planning to venture into making coupes and sport roadsters. The company had come out with its indigenous SUV, the Rio sometime back. The company has sold about 2000 Rios till date. Chinkara Motors based out of Mumbai currently sells custom made 2 seater roadsters for about Rs. 26 lakhs. With such endeavours from these companies, soon we can own coupes and roadsters for a really exciting price offering of about Rs. 6 to 8 lakhs!

Source – EconomicTimes