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Last Updated : Dec 08, 2018 11:53 AM IST | Source:

This week in Auto: Carmakers to hike prices; Tata Harrier takes guard; the promise of reporting retail sales

Here is the list of all the major developments in the auto space

Swaraj Baggonkar @swarajsb
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Car manufacturers say they are no longer able to bear the cost pressures that they were trying to keep at bay since a few months. And so the list of number of companies declaring a hike in January is growing by the day. Here is the list of all the major developments in the auto space along with a brief write up on the need to switch to reporting retail numbers from wholesales.

Maruti to hike prices, VW by 3% from January

Maruti Suzuki India Wednesday said it will increase prices of its vehicles across various models from next month to offset adverse impact of increase in commodity prices and foreign exchange rates. The company, however, did not specify by how much the prices of its vehicles would increase

German auto major Volkswagen on December 7 said it will increase prices of its products in India by up to 3 per cent from January 2019 citing rising input costs. Following dynamic changes within the economy and rising input costs followed by a depreciating rupee, there has been a foreseen requirement to increase prices in the passenger vehicle segment, Volkswagen India said in a statement.

Kia Motors planning India-specific electric vehicle

Korean car maker Kia Motors, which is ready to roll out its first car in India before Diwali next year, is also contemplating an India-specific electric vehicle to be part of its line-up.

Consumer-related vehicle inputs such as body preference, battery range, price and other issues are being sent to Kia’s headquarters in South Korea from India to help design a product that is best suited for Indian buyer

Tata Motors unveils Harrier, launch in January

Tata Motors, India fourth biggest car maker, is all set to launch the all-new sports utility vehicle Harrier in January as part of its efforts to take the Tata Motors brand to a slightly premium than the value position it has currently. The model will compete against the Hyundai Creta, Mahindra XUV500 and Jeep Compass.

Tata Motors is in a pact to source Harrier’s 2.0 litre diesel engine from Fiat Chrysler. The SUV will start with a 5 seater type before moving to 7 seater in 2020. An automatic option will be given later next year.

Tata Nexon is first Indian car to secure 5-star safety rating

Tata Motors' compact sports utility vehicle Nexon has become the first car from India to secure a 5-star safety rating for adult occupation in the Global NCAP crash test. Following the Nexon's 4-star result earlier this year, Tata Motors has improved a number of safety features, including making the seat belt reminder for driver and passenger standard for all variants of the model.

Mahindra's recently-launched people mover Marazzo scored a 4-star rating in the same test for adult occupant protection. For child occupant protection, it was given a rating of 2 stars.

High time the car industry moves to retail sales reporting

In many major markets across the globe manufacturers report retail sales (dealer to customer) numbers which helps not just the auto fraternity to formulate short term business plans but it helps the government as well to gauge demand supply equation before deciding on levying additional tax burden.

But in India there is no tradition of reporting retail numbers. Almost every manufacturer sends press releases on the first day of every month of the sales clocked by it in the previous month. But these are wholesales dispatches (manufacturer to dealer) and do not necessarily paint a correct picture of the market.

The result is that the manufacturer keeps pushing stocks to the dealers and the dealer in turn is forced to offer higher discounts to get rid of old stocks. Some dealers even have stocks that are more than a year old. New stocks are also allotted to new dealerships as all companies try to maximize their reach but that does not certainly result in confirmed sales to the final customer.

Government authorities often check the sales data that is coming from the lobby body the Society of Indian Automobile Manufacturers and data from GST collection. Since vehicle registration is a state issue there certainly is a disconnect between the Centre and the states over data of the number of vehicles sold.

In the end even if wholesale sales appear healthy retail sales could be worse. The government thus does not get a clear picture of the demand trend and a levy of a new tax is often met with shock and awe. A classic case is that of sales of luxury cars. All the luxury car makers stopped publishing numbers several years ago due to disagreement over the type of sale.

German giant BMW says it is its company policy to report only retail sales and because only wholesale numbers get reported in India the company opted out of reporting its numbers. Other makers such as Mercedes, Audi, Jaguar Land Rover and Volvo followed suit and stopped providing numbers.

Another example is that of the stark difference in sales during the recently concluded festive period. While companies reported flat growth during the six week period an association of dealers said sales during the period was 14 percent lower.

While retail data reflects the real demand wholesale numbers do not factor in the dealer inventory. Then there is a common practice of inflating the numbers to meet sales targets.

“It is in the industry’s favour that India starts reporting retail numbers. Some companies do (wholesale) billing right into the first day of the new month and some go even to the second day,” said a senior executive of Tata Motors who assured that they are billing at the end of business hours on the last day of the month.

For retail numbers to be revealed the state regional transport offices (RTOs) need to go online and share the database with the center. The government’s portal called ‘Vahan’, which was launched several years ago has failed to get everybody on board.
First Published on Dec 8, 2018 10:11 am
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