It's not been an easy year for the Indian automobile industry, but customer sentiments are improving and so are the sales figures. We take recall the top eight ups and downs of the year 2014 for the automobile sector if India. The bitter pill first, and then the good stuff...
Four Downs of 2014
Ambassador of fond memories bids adieu:
It ruled the Indian landscape for over half a century, but this year the iconic Hindustan Ambassador bid its final farewell. Hindustan Motors (HM), India's oldest surviving car manufacturer shut its manufacturing facility situated at Uttarpara (West Bengal) in May this year due to low demand for its cars and critical shortage of funds.
Originally based in United Kingdom's popular Morris Oxford, the Hindustan Motors Ambassador has been in production since 1957. Most of us have fond memories either from the driver's seat or the very roomy and comfortable (ahem) rear bench. The Ambassador was a common sight on Indian roads and till recently was considered the symbol of power, since it was the preferred mode of transport for most influential politicians and top bureaucrats of the country.
However, this is not the end as many proud owners, collectors and cab drivers will continue to give the Amby the TLC, it need to continue chugging along side it's more modern and efficient competition.
Easy to buy and run new cars, but where's the space?
This brings us to the other problem on Indian roads - space crunch. Being handed down from one generation to another, Indians are quite emotionally attached to their cars. Though most prefer junking old cars to make way for newer ones is a good idea, not many of us are ready to scrap vehicles that have been used for years.
With the rise in disposable income and ease of ownership, there's constant increase in the number of vehicles on the road; however space remains a constraint. But if these used and abused vehicles aren't removed, our roads will get more congested and would adversely affect our environment, as most vehicles of yesteryears don't meet the stringent emission norms of today.
Since we don't have well defined end-of-life policy for vehicles, they continue to be sold in the thriving used car market, and when the cost of repairing and operating cost becomes very high they are left unattended to corrode.
And this isn't all. Statistics from developing cities show that there is threefold increase in people violating parking rules on the road, compared as recently as 2012. In cities like Pune, the police has collected fines of over Rs 1 crore and recorded an average of 10,000 parking violation cases per month this year. If a system can come in place, then these old vehicles can be dismantled and several parts can be recycled too.
Earlier this year, the Ministry of Heavy Industries has conducted a study and recommended monetary incentives of Rs 25,000 for a car and Rs 10,000 for two-wheeler, in a bid to encourage people to let go of their old vehicles for scrapping, but the move wasn't well accepted. Many nations also offer up to 50 per cent rebate on excise duty, VAT and road tax on new cars, if one is willing to scrap the older one. Hope in the New Year, the current government can come up with a better defined law to pave a way for clutter free roads and a cleaner environment.
Want more car safety features? Yes Willing to pay extra for them? No
We all love the experience of buying a brand new car. It is the car you wanted, in the colour you like, with an engine that's peppy, clean and efficient. But according to a survey, car buyers in our country would love to have all the safety features offered by the manufacturer, but most Indians are not ready to pay extra for them. And the excuse most sight is - maybe in the next car.
The J.D. Power Asia Pacific 2014 India Automotive Performance, Execution and Layout (APEAL) Study has reported that visibility and safety is the most influential performance category on new-vehicle customer satisfaction in the small car market, contributing 16 per cent to the overall APEAL score, and is the third-most impactful category in the midsize segment, where it contributes 13 per cent to overall satisfaction.
The study suggests that about 94 per cent of small car owners would "want" Anti-lock Braking System in cars but only 24 per cent have opted for the safety feature in their existing vehicle. Similarly, 92 per cent of new car buyers desire airbags in the vehicle, only a meagre 12 per cent bought the higher spec car with airbags. The lowest feature in the table is the hands-free communication system in cars, which about 93 per cent of new car buyers desire, but about 10 per cent actually opted for.
Shouldn't our New Year resolution be to take car safety more seriously?
Most popular Indian small cars fail crash test:
We might prefer to have a better music system in our cars than spend on safety features like airbags. But will this mindset change if we told you that the car you are driving is probably not safe for you? This year for the first time Global NCAP, an independent UK-based charity that carries out consumer orientated vehicle safety initiatives, carried out crash test on Indian vehicles. And like you have guessed, most of the small cars proved to be unsafe and could cause life threatening injuries in a road crash.
These tests were conducted on the base variant like the top-selling Maruti Suzuki Alto 800, Maruti Suzuki Swift, Tata Nano, Hyundai i10, Ford Figo, Datsun Go and Volkswagen Polo, which do not offer airbags as standard. And here's what the report states, "All the cars selected by Global NCAP for testing in a frontal impact at 64kmph received zero-star adult protection ratings."
The silver lining of this crash test result was that Volkswagen India, made twin front airbags standard across its entire range of the Volkswagen Polo. When it was tested again with the twin-front airbags, it passed with a four-star rating. But according to the report, Maruti Suzuki Alto 800, Tata Nano and Hyundai i10 have extremely weak structure and even with airbags the cars would not curtail the risk of serious injury during impact.
As a counter argument, most auto manufacturers claimed that the cars sold here fully conform to all safety standards currently applicable in India. And it's the same with cars that are manufactured and exported from here.
Thankfully, under a recently proposed legislation on road safety, Road Transport and Safety Bill, the ministry of road transport and highways has called for setting up of an all-India NCAP and adoption of safety standards to make cars safer and pave the way for adopting global crash safety norms.
Now the good stuff, as promised...
Four UPS of 2014:
Fuel prices cut due to global price plunge:
As international oil prices slumped to a five-year low, slash went the price for petrol and diesel in India. Just in the last three months crude oil prices fell from over USD 95 to under $60 per barrel, with current price hovering around the USD 57 mark as we report.
For the first time in more than five years diesel price was brought down by Rs 3.37 a litre in October 2014, when the government decided to deregulate the fuel. This was followed by another Rs 2.25 a litre reduction on November and was further reduced by 84 paise per litre in December. Cumulatively, diesel prices have been cut by Rs 8.46 a litre in four reductions.
Petrol prices have also witnessed a steady drop in India and seen about eighth straight reduction in prices since August. In 2013, petrol prices in Delhi had touched the Rs 75 per litre mark but the price cuts have brought the precious fuel to about Rs 63 currently in the Capital. There would have been yet another reduction in November, but the government took the opportunity to increase excise duty on petrol and diesel by Rs 1.50 a litre each. Just in these two excise duty hikes, the government has raised its revenue by Rs 10,600 crore this fiscal year.
Overall, oil prices have plunged 50 per cent from their 2014 peak set in June this year. One of the main reasons for this is that OPEC (Organisation of Petroleum Exporting Countries) an organisation consisting of the world's major oil-exporting nations has decided not to cut production, despite a huge oversupply in world markets. And as long as the US Dollar exchange rate remains between Rs 58-62, India will continue to reap from this price drop.
Excise duty cuts propel car sales in 2014:
Car sales have been on a steady rise, thanks to the drop in fuel price and benefits of reduced excise duty. Domestic passenger car sales registered a 9.52 per cent growth at 1.56 lakh units in November, according to data released by the Society of Indian Automobile Manufacturers (SIAM).
The industry hopes that this is a recovery path and if the interest rate could be reduced then this growth will continue in to the New Year. However, the government may not to extend the excise duty relief till the budget and cars could be become dearer in 2015.
This year saw steady growth from April onwards as sales grew 3.82 per cent at 1.21 million units in April-November 2014 against 1.16 million units a year-ago in the same period. Maruti Suzuki India reported a growth of 14.87 per cent at 82,306 units, while Hyundai Motor India sales grew 6.04 per cent at 35,448 units. Big gainers were Honda Cars India which saw 24.72 per cent growth at 11,612 units and Tata Motors which grew by 30.03 per cent to 10,286 units, thanks to the introduction of new models like the Honda Mobilio and Tata Zest.
The world's largest two-wheeler market back on full throttle:
India has over taken China, to become the world biggest motorcycle and scooter market, standing at an incredible 1.48 crore units annually. This has seen a growth of about 7 per cent from 1.37 crore units in financial year 2012-13. Some market analysts claim that the total value of the Indian two-wheeler industry along with its ancillary units is about Rs 1,00,000 million.
The lion's share of over 40 per cent remains with Hero MotoCorp which boasts of the world's largest two-wheeler manufacturer. The company plans to increase its production capacity from the current 76 lakh units per annum to 1.12 crore in the next couple of years with an investment of Rs 3,000 crore. The company is now focusing on international markets and aims to have presence in over 50 countries and more than 20 manufacturing and assembly facilities globally, in accordance to its Vision 2020.
After parting ways from Hero, Japanese auto major Honda is on a war's footing. In practically no time Honda Motorcycle and Scooter India (HMSI) became the second largest two-wheeler manufacturer of India churning out 16 lakh two-wheelers annually. Today, it has a capacity of 36 lakh units and plans to produce 45 lakh units by the year 2015-16.
On a completely different approach, Bajaj Auto has emerged as the biggest exporter of two-wheelers from India. With over 66 per cent market share, Bajaj two-wheelers are sold in about 60 countries and enjoys No. 1 or No. 2 spot in 17 of them. Did you know that the Bajaj Boxer is the most popular motorcycle brand in Africa? And once it acquired 48 per cent stake in Austrian motorcycle brand KTM, Bajaj has also made India a hub for low capacity performance bike production. Today KTM is the biggest and the fastest growing two-wheeler brand of Europe. Bajaj exports the KTM Duke and RC range produced at its plants in India to top international markets across the globe.
TVS has joined hands with the other big European two-wheeler company BMW Motorrad and is developing a new 250-500cc motorcycle. While, Royal Enfield is making more money than it ever did and has strong demand for its classic styled motorcycle models.
But, the other key player that brought India up there in the global two-wheeler hierarchy is Harley-Davidson. The legendary cruiser maker took the leap of faith and started its big bike assembly plant here in India. It went on to launch the Harley-Davidson Street 750, a bike designed for markets like India. Today, Harley-Davidson India sells the most number of over-500cc motorcycle in our country, and according to SIAM report 1,880 units out of the 3,700 units (locally produced and CBUs) sold in the segment FY2014 are Harley-Davidsons.
This could just be the beginning, as other key players such as Triumph, Benelli, Kawasaki has big plans for India in 2015.
Govt proposes new law to tame traffic offenders:
A welcome proposition from the new Government was a newly drafted law which aims to implement stricter penalties on traffic law violators. Negligent driving and poorly maintained vehicles are the main reason for most accidents, with over 1.5 lakh people losing their lives on Indian roads every year. In the over five lakh road accidents reported annually, lakh of people get injured on our roads, and we're not even considering the unreported ones.
According to the World Health Organisation (WHO), these huge number of deaths and injuries on Indian roads cost the country around three percentage points of GDP growth annually. The new bill hopes to save over two lakh lives in the next five years and improve economic development. The Road and Transport ministry posted the draft law online and invited users to comment and share their feedback.
The new law includes radical measures such as implementing points system which would terminate repeat offenders' driving licenses and fine of up to Rs 3 lakh in case of a casualty. The draft would also increase the fine drastically for speeding, drunk-driving and jumping a red light. Other interesting points include things such as treating off-duty police officials as a regular civilian and giving ambulances and fire engines priority and right of way over cars ferrying VIP and dignitaries.
But, the biggest obstacle for implementing these stringent laws will be the deep rooted corruption in our system which can practically get anyone a driving license. In fact, most traffic offenders when caught resort to greasing the palms of the officials to go scot free. We hope when the new draft law for traffic is passed, the authorities make sure to get it implemented.
from zigwheels http://www.zigwheels.com/news-features/news/indian-automobile-industry-top-8-ups-and-downs-of-2014/20666/
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