New launches, policy debate mark action packed week for auto
After lot of counter arguments on the difficulties in practical implementation and tough questioning from the Delhi High Court (HC) on the extent of actual benefit, the scheme successfully completed its first week in the capital city.
It was an action packed week for the automobile sector, even as the mixed set of sales numbers for December points to a patchy recovery.
Commercial vehicles and passenger vehicles sales grew at a healthy double digit year-on-year and two-wheeler sales remained sluggish.
Scepticism was rife on whether the Delhi government’s odd-even scheme, as a first step towards controlling pollution, would bear any fruit. After lot of counter arguments on the difficulties in practical implementation and tough questioning from the Delhi High Court (HC) on the extent of actual benefit, the scheme successfully completed its first week in the capital city.
The Delhi HC has now reserved its final hearing on whether the scheme can be continued further, for January 11, before which the state government is expected to produce evidence on the real impact on the particulate matter (PM) level, compared to the December range.
Another related directive, to ban the registration of diesel vehicles over engine capacity of 2000 cc, first issued by the National Green Tribunal and subsequently upheld by the Supreme Court, also saw retaliation from the auto industry association as well as manufacturers like Mahindra & Mahindra (M&M), Toyota and Mercedes. These companies have the maximum number of products in the 2000cc+ category. The Supreme Court, however, stayed put on its decision.
Meanwhile, as part of its contribution in reducing vehicular-led environmental hazards on a pan-India basis, the Indian government also announced its decision to skip Bharat Stage (BS)-V emission norms and leapfrog to BS-VI. Currently, BS-IV implementation is in progress in different parts of the country, with a deadline of April 1, 2017.
BS-VI emission norms will now be applicable from April 1, 2020 onwards, a year earlier than previous deadline. Oil refining companies have also been directed to invest Rs 30,000 crore, to ensure the auto manufacturers are supplied BS-VI compliant fuel.
According to a report by Edelweiss, ‘total price hike of direct transition from BS-IV to BS-VI would be 2-4 percent of the on road price for entry petrol and CNG vehicles,”. The report further points out that the industry typically sees a lot of pre-buying as the deadline approaches.
The week also saw some new product launches / announcements by Maruti Suzuki, M&M and Bajaj Auto. Maruti launched the new Swift DZire equipped with auto gear shift (AGS) technology and revealed the name of its much awaited compact SUV to be unveiled at the Auto Expo scheduled in February. The SUV will be called Vitara Brezza.
Bajaj Auto announced its plan to launch 3 new bikes in 2016, while also highlighting that it will focus on clocking 70,000 units per month in its executive segment from the current 20,000 units. The company also announced that its Austrian partner KTM is considering driving into the Indonesian market and is relying on Bajaj Auto to power its business in the country.
M&M also launched its new small commercial vehicle (SCV), Mahindra Imperio, as a replacement for aging model Genio, while the Renault-Nissan alliance rolled out its 1 millionth car in India from its Chennai plant.