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Last Updated : Aug 24, 2019 10:47 AM IST | Source:

This week in Auto: FM’s measures to give auto a fillip; new launches hit headlines

Here’s a look at all the important news that made headlines during the week

Swaraj Baggonkar @swarajsb


No fewer than five new model launches were done this week by car and bike makers across segments. The mood at each of the launches, barring one (Kia Seltos launch), was that of hope riding on a wing and a prayer, the hope of a government-sponsored stimulus package to bring noncommittal buyer back to the showrooms. The government responded late in the week. But, is that enough to put demand back on track? Our auto news wrap today tries to find what exactly the package means to the end vehicle buyer. Before that, here’s a look at all the important news that made headlines during the week.



Kia launches Seltos at Rs 9.69 lakh

Hyundai Group company Kia Motors debuted its maiden product, the Seltos, in the India market — a mid-size sports utility vehicle that will compete against the likes of Hyundai Creta, Tata Harrier and MG Hector.

In five weeks the Seltos has garnered 32,035 bookings. Deliveries will begin immediately.  One out of every five units was booked online. The top-end version of the car is priced at Rs 15.99 lakh. The base version is priced at Rs 9.69 lakh.



BMW launches 3 Series at Rs 41.4 lakh

German luxury carmaker BMW on August 21 launched the new version of its 3 series sedan priced between Rs 41.4 lakh and Rs 47.9 lakh (ex-showroom). The new offering is longer and wider than the previous versions but weighs 55 kgs lighter.

The new 3 series will be available in two diesel variants powered by a two-litre engine and one petrol variant, also with a two-litre engine, along with eight speed automatic transmission. While the two diesel options are available at Rs 41.4 lakh and Rs 46.9 lakh, the petrol version is tagged at Rs 47.9 lakh.


Hyundai Grand i10 Nios launched at Rs 4.99 lakh

Hyundai Motors India, the country's second largest carmaker, has launched the Grand i10 Nios, a mid-premium hatchback, at Rs 4.99 lakh (manual transmission petrol, ex-showroom).

The starting price of the petrol automatic manual transmission (AMT) is Rs 6.37 lakh. The diesel MT starts at Rs 6.70 lakh while the diesel AMT is priced at Rs 7.85 lakh.


Maruti launches XL6 at Rs 9.79 lakh

Maruti Suzuki, the country’s largest carmaker, has launched a six-seater stylish version of its people-mover Ertiga christened XL6.

The base version (Zeta MT) comes at Rs 9,79,689 while Alpha MT comes at Rs 10,36,189. Zeta AT is priced at Rs 10,89,689 and Alpha AT at Rs 11,46,189. It is positioned as a premium offering and to be retailed through the Nexa dealerships



Maruti Suzuki recalls Wagon R to fix fuel hose

Maruti Suzuki India Ltd said on August 23 that it would recall 40,618 of budget four-wheeler WagonR manufactured between Nov. 15, 2018 and Aug. 12, 2019. Maruti said the recall was voluntary and triggered by "a possible issue of fuel hose fouling with metal clamp".

Owners of the suspected vehicles will be contacted by the company's dealers for inspection and replacement of the faulty parts starting August 24.



Finance Minister intervenes to boost auto sector

On August 23 evening, Finance Minister Nirmala Sitharaman said that increased registration fees for vehicles would be deferred and ban on purchase of new vehicles by government departments would be lifted to spur growth.

In addition, allowing higher depreciation on vehicles bought before end of this financial year and boosting liquidity for purchase of vehicles were some of the measures announced by the Finance Minister as part of a three-part reform process out to be laid out over the next two weeks.


In less than an hour after the finance minister announced the above-mentioned measures to boost consumption, heads of more than half a dozen auto companies and lobby bodies welcomed the steps taken by Sitharaman. This is despite the fact that almost no demands of the automakers were met by the package.

Automakers in unison sought an immediate 10 percent cut in GST besides a rethink on the mandatory multi-year insurance premium buy, push back of BS-VI implementation deadline and introduction of a scrappage policy. But, what the sector received, however, fell way short of expectations.

An increase in depreciation costs (from 15 percent to 30 percent) will benefit the corporate and fleet buyers of passenger and commercial vehicles and to a much lesser extent the buyer of two and three-wheeler.

The minister also said that Bharat Stage IV (BS-IV) vehicles would not be banned from plying on the roads after April 1, 2020. But, there was never a proposal to ban them in the first place. There are more than 250 million registered vehicles of all kinds running on Indian roads, a majority of them being BS-IV type. Banning them in one strike will be catastrophic.

The registration cost of vehicle which was to go up 10-20 times as laid out by the Ministry of Road Transport and Highways (MoRTH) had been deferred by the government. MoRTH only proposed the hike and never actually implemented it. This will have little bearing on boosting vehicle demand since there is no roll back of any hike as the notification was yet to be brought into effect.

The Finance Ministry further said that the government would lift the ban on purchase of new vehicles by its own departments including companies and institutions and allow it to replace its ageing fleets.

While this will ensure the replacement of more polluting, older generation vehicles with cleaner emission new generation cars no data was shared of such vehicles that needs replacement.

Further, the earlier stance of the government was to replace existing diesel/petrol vehicles (ICV) with electric vehicles. The “lifting of the ban” means government departments will now be able to buy ICV instead of electric vehicles.

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First Published on Aug 24, 2019 10:47 am
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