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Impact of court ruling on diesel cars moderate, but wide: Analysts

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New Delhi, Dec 16 : The Supreme Court order banning the sale of diesel vehicles above 2,000 cc in the national capital will impact only some auto-makers strongly, but will also potentially trigger a cascading effect on the dependent ancillary industry, analysts maintain.

Spelling out the figures on domestic sale of passenger vehicles, analysts said out of some 3 million sold in India annually, only around 7 percent is accounted for by the national capital — which makes it a market of 210,000 units.

Out of that, diesel vehicles account for 25 percent, or a market of 52,500 units. That is 1.75 percent of passenger vehicles sold in India are accounted for by the diesel versions in Delhi region.

“In the short term, there will be disruption. From showroom inventory to pipeline stocks — changes, cancellation of bookings, workshop and parts planning are the areas of impact at the vendor end,” said Kumar Kandaswami, senior director with Deloitte Touche Tohmatsu.

“It remains to be seen as to the long-term view. If this restriction of not registering diesel cars with engines of 2000 cc or more continues longer, or on a permanent basis, companies will have to deal with investment decisions that are significant,” Kandaswami told.

“Inventories will have to be shifted,” he said, referring to the impact down the line. “The problems may not be as acute in some interior parts and accessories. Most component suppliers will be faced with schedule changes in the near term.”

But some companies, analysts maintain, can take a larger hit.

“We believe the news (of the Supreme Court order) is likely to have negative impact on Mahindra and Mahindra, as about 95 percent its passenger vehicle portfolio is above the 2,000 cc range,” said Bharat Gianani, automobile analysts with Angel Broking.

In fact on a day when the sensitive index of the Bombay Stock Exchange rose 0.69 percent, Mahindra and Mahindra shares declined by 5.44 percent, even as the bourse’s automobile index, as a whole, was down just 0.51 percent.

Mahindra and Mahindra hoped for a holistic view. “The vehicles affected represent about 2 percent of the company’s monthly sales. The company is in the process of evaluating various options to work within the framework provided by the honourable Supreme Court,” the company statement said.

“The news will not have much impact on Maruti Suzuki — it hardly has any product above the 2,000 cc segment — nor on Tata Motors as its earnings are driven largely by JLR, which is a global player,” Gianani added.

At then same time, they said the ruling could change customer perception nation-wide.

“This decision will surely impact some makers in the luxury segment and as well as SUV segment. In addition, from customer prospective they will think twice now buying diesel vehicles because of the uncertainty with regard to diesel regulation,” said Abdul Majeed of PriceWaterhouse.

Similarly, they said, much was being made out on the pile-up of inventories. They said the norm was to maintain an inventory of around one week. But they felt government revenues may get effected slightly, as as utility vehicles were taxed at higher rate at 24-30 percent.

“There is an interim period of 15 days till December 31 for OEMs to clear the inventory in the NCR region, if they are not able to clear the inventory by 31st Dec they need to look at other location within the country including if possible exports to nearby countries,” Majeed said.

Analysts believe the auto industry will hold negotiations with the government to sort out the issue, suggesting measures such as banning older vehicles, further improving the emission levels so that the ban does not exceed March 31 next year.

“While the temporary ban on diesel vehicles for three months may impact sales in the short term, the long term changes to policy, including emission norms, will be the key in determining the future road map of the industry,” said R. Muralidharan of Fitch Ratings.

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Audi Q7 launches in India for Rs 67.77 lakh

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New Delhi, Sep 4: The 2017 Audi Q7 petrol engine is now available in India. The new variant has been dubbed the 2017 Audi Q7 40 TFSI. Earlier, the car was only available with a diesel engine in India.

Propelling the car is the 2.0-litre TFSI engine that powers multiple models from the fleet of the German carmaker – including the TT Coupe with 252 horsepower and 370 Nm of torque making the SUV capable of going from 0 to 100 km/h in just 6.9 seconds. The engine comes mated to an 8-speed Tiptronic transmission.

“Our flagship SUV Audi Q7 had been the only product in its segment in India when it was launched. A popular choice of Bollywood celebrities and big industrialists, the Audi Q7 lead the way for the luxury SUV segment in India. With the introduction of the Audi Q7 40 TFSI quattro, we are now offering customers an exciting line up of their preferred SUV to choose from and own their favorite Audi. This marks the debut of the first-ever luxury SUV in its segment in India and reigning segment leader with a petrol engine,” said Rahil Ansari, Head, Audi India.

Audi is already having features like virtual cockpit, self-park technology and the adaptive suspension set up which is same in diesel-powered sibling.

“This is the year of ‘Audi Reloaded’ for us. ‘Audi Reloaded’ just doesn’t mean new products or new touch points but it signifies a nimbleness to tweak the strategy as per the market demand. We have taken a strategic decision to increase our petrol mix and started off the process with the launch of the Audi Q3 1.4 TFSI in March this year. We do have some other surprises planned for this year,” added Ansari.

Wefornews Bureau

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Hike in GST cess makes cars expensive

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NEW DELHI, Aug 30: The Cabinet today increase the cess on mid-size, large cars and SUVs from 15 per cent to 25 per cent under the new GST regime.

With GST prices of most SUVs were cut between Rs 1.1 lakh and Rs 3 lakh which will increase in cess, the cuts will be reversed.

The GST council, the apex tax rate setting body under the Goods and Services Tax (GST) regime raised the cess with the amedment to the Schedule of section 8 of the GST (Compensation to a State) Act, 2017.

It had approved on August 5 to raise cess on SUVs, mid-sized, large and luxury cars that had become cheaper post GST rollout on July 1.

Under GST, a cess was levied on demerit goods like cars, tobacco, and coal to compensate the loss of revenue.

Cars attract the top tax rate of 28 per cent. On top of this, a cess of 1 to 15 per cent is levied for the creation of the state compensation corpus.

The date for implementing the hike in the upper limit of the cess from 15% to 25% will be decided by the GST Council when it meets in Hyderabad on September 9.

Presently, large motor vehicles, SUVs, mid-segment cars, large cars, hybrid cars and hybrid motor vehicles attract a cess of 15 per cent over the 28 per cent GST rate.

Small petrol cars of less than 4 meters and 1,200 cc attract a cess of 1 per cent, while small diesel cars of less than 4 meters and 1,500 cc engine attract a cess of 3 percent.

GST Scenario 

GST present slab and upcoming slab rate on cars:-

Existing GST Rates Rate Classification
Petrol Cars with Engine < 1.2 Litre 28% + 1% Cess Petrol Cars for Mass Market
 Diesel Cars with Engine < 1.5 Litre 28% + 3% Cess Diesel Cars for Mass Market
 All other Cars 28% + 15% Cess All other Cars
GST Rates post New Development Rate Classification
Compact Petrol Cars with Engine < 1.2 Litre 28% + 1% Cess Compact Petrol Cars under 4 Meter
Compact Diesel Cars with Engine < 1.5 Litre 28% + 3% Cess Compact Diesel cars with Length < 4 Meter
Mid Segment Cars with Engine < 1.5 Litre 28% + 25% Cess Cars with Length > 4 Meter

Based on Existing Slabs, expected Category

 

GST Impact after increase in 10% Cess

Models Price Hike
Maruti Baleno, Honda Jazz, WRV, I20, Ford Ecosport, Maruti Brezza or Segment lower cars etc No Price Hike
Honda City, Hyundai Verna, Maruti Ciaz, Renault Duster, Nissan Terrano etc Rs 70K to Rs 1 Lakh
Mahindra XUV 500, Tata Hexa, Tata Safari Storme, Toyota Innova Crysta, Skoda Octavia, Toyota Corolla, Jeep Compass Rs 90K to Rs 1.5 Lakh
Toyota Fortuner, Ford Endevaour, Skoda Superb, VW Tiguan Rs 2 Lakh to Rs 2.5 Lakh
Audi Q3, A4, A6, BMW X1, 3 Series, GT,  Benz C, E, GLE, GLA Class Rs 2.5 Lakh to Rs 4 Lakh

 

Wefornews Bureau

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Choose the Best: Hyundai Verna, Honda City & Maruti Suzuki Ciaz

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New Delhi, Aug 24: Hyundai Verna introduced its new segment cars in the competition with mid-size sedan segment in Indian market – Honda City and Maruti Suzuki Ciaz. 

They are different from each other in various ways:

Design

The new Hyundai Verna follows the Fluidic 2.0 design philosophy with very simple appearance. The Honda City on the other hand has a bold design with funky look and Maruti Suzuki Ciaz  has a little old but manages to look sophisticated.

Engine

The Hyundai Verna, Honda City and Maruti Suzuki Ciaz are all offered with petrol and diesel engines.

Verna offered a set of 1.6-litre petrol and diesel engines. Both the engines are available with a six-speed manual and six-speed automatic gearbox. The diesel puts out 123bhp and 151Nm of torque while the diesel motor can dish out 128bhp and 260Nm of torque.

The Honda City is comes with 1.5-litre petrol and diesel engines. The 1.5-litre iVTEC (petrol) unit is capable of churning out 119bhp and 145Nm of torque while the 1.5-litre iDTEC (diesel) can dish out 100bhp and 200Nm of torque. The petrol engine can be opted for with a five-speed manual gearbox or a CVT while the diesel is only available with a six-speed manual.

The Maruti Suzuki Ciaz uses a 1.4-litre petrol and a 1.3-litre diesel engine that are tuned to produce 93bhp/130Nm and 90bhp/200Nm, respectively. The petrol can be had with a five-speed manual and a four-speed automatic gearbox. The diesel can only be had with a five-speed manual gearbox.

Price

The new 2017 Hyundai Verna ex-showroom, New Delhi price is between Rs 7.99 lakh and Rs 12.62 lakh.

The Honda City price starts from Rs.8.46 and goes all the way up to Rs 13.43 lakh.

The Maruti Suzuki Ciaz is the cheapest of the lot with the price starting at Rs 7.66 lakh and going all the way up to Rs 11.55 lakh.

Wefornews Bureau

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