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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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Mahindra Electric, Zoomcar partner to offer 100 EVs in Delhi

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New Delhi, April 10 (IANS) Mahindra Electric on Tuesday announced its partnership with self-drive rental platform Zoomcar, as part of which the electric vehicles (EV) maker will offer 100 of its e20 plus EVs on the latter’s platform in the capital.

The electric mobility arm of automobile major Mahindra & Mahindra said the agreement is aimed at promoting shared and cleaner mobility.

“Mahindra’s commitment towards electric mobility continues. Our aim is to make EVs more mass adaptable in India in public transport, shared mobility and personal vehicles,” Mahindra Electric Chief Executive Mahesh Babu told reporters here.

The EVs under the deal are financed as part of an agreement between Zoomcar and Mahindra Finance. Apart the e2o plus, Mahindra also makes the e-Verito and e-Supro model EVs. Zoomcar operates in 30 cities across India, allowing users to rent cars by the hour, day, week or month.

At the event to announce the tie-up, Niti Aayog Chief Exexcutive Amitabh Kant said a massive revolution is required to usher in shared, connected and zero waste mobility, while tackling Delhi’s air pollution is not possible without private sector collaboration.

“In Niti Aayog, we have provided charging stations as the need for the government is to ensure that there are vast number of charging stations all over and we are, in fact, moving towards having all-electric vehicles,” he said.

While launching the National E-Mobility Programme here last month, Power Minister R.K. Singh said the government will soon unveil a policy on EVs. According to officials, the policy will provide that charging EVs would be a service and not sale of electricity — which requires a licence.

The policy on electric vehicle charging stations on points along identified corridors, draft of which has been finalised by the Central Electricity Authority, would provide that the price of power for charging electric vehicles be capped at the average cost of supply in the state, excluding discom transmission and distribution losses, plus 15 percent, officials said.

This would help the tariff for charging at an economical level of below Rs 6 per unit, they added. The governments’ National Electric Mobility Mission Plan launched in 2013 aims at gradually ensuring a vehicle population of about 6-7 million electric and hybrid vehicles in India by 2020.

The vision enunciated two years ago is for India to have 100 percent EVs by 2030.

IANS

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Audi India to hike vehicle prices

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Mumbai, March 16: Luxury car manufacturer Audi India on Friday announced a price hike of up to 4 per cent across its entire model range, effective from April 1.

According to the luxury car manufacturer, prices will be increased due to a hike in customs duty announced in the Union Budget 2018-19 and will range from Rs 100,000 to Rs 900,000.

“The increase in custom duty and introduction of Social Welfare Surcharge in lieu of an Education cess (which is higher than the erstwhile Cess) in the Union Budget made the increase in price inevitable,” said Rahil Ansari, Head, Audi India.

“We have tried to absorb the impact of the increase in Customs duty and have minimized the price hike for our customers.”

IANS

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Driving licence issuing process to become fully computerised: Gadkari

Skill Development Minister Dharmendra Pradhan said drivers’ training can save up to Rs 10,000 crore every year.

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Road Transport and Highways Minister Nitin Gadkari on Wednesday announced that the process of approving driving licences will soon be made fully computerised and there will be no human interface in granting such licences to heavy vehicle drivers in the country.

Launching the scheme for District Driving Training Centres, the minister said this will reduce the instances of bogus driving licences and will result in lesser number of accidents on the roads.

Gadkari added that at least one model driving training centre will be set up in each district with a financial assistance of up to Rs 1 crore from his ministry. The agency will invest equal amount of grant under the scheme.

“The scheme is designed with an objective of creating employment and meeting the requirement of heavy and light motor vehicle drivers in the country. It also aims at inculcating the habit of road safety, like behavioural and attitudinal changes among drivers,” a statement said.

It added that training courses will be conducted for drivers who carry dangerous and hazardous goods.

Skill Development Minister Dharmendra Pradhan said drivers’ training can save up to Rs 10,000 crore every year.

During the event, the ministers also launched a mobile app and a toll-free emergency number for highway users.

The key features of the app include provision for the user to enter road quality-related information or to report any accident or pothole on the highway. It also provides users with real-time data related to waiting time expected at toll plazas.

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