The past week saw two new SUV launches but they almost went unnoticed. Hyundai and Volkswagen launched the new Creta and T-Roc respectively but they were overshadowed by news emerging due to coronavirus. That aside, Hero Motocorp quietly appealed to the SC for relaxation in the deadline of exhaustion of BS-IV stock.
In today’s automotive wrap find out why the company became the only one to do so even as its rivals appear to have managed their own BS-IV inventory better. But first here are the top headlines from the world of auto this week:-
Hyundai launches new Creta at Rs 9.99 lakh
Hyundai Motor India Ltd (HMIL) launched the new Creta on March 16 at an introductory price of Rs 9.99 lakh (ex-showroom, all-India).
HMIL offered the new SUV with three BS-VI compliant engine options – 1.5 litre petrol, 1.4 litre petrol and 1.5 litre diesel with price starting at Rs 9.99 lakh, Rs 16.16 lakh and Rs 9.99 lakh respectively.
Volkswagen launches T-Roc SUV at Rs 19.99 lakh
Volkswagen first debuted the T-Roc at the 2020 Auto Expo and has now launched the SUV in India. The T-Roc will be Volkswagen’s second SUV in India after the recent launch of the Tiguan Allspace.
The T-Roc, just like the Allspace, will come to India via the completely built-up (CBU) route under the 2,500 car per year import rule. The company is however just offering a single, fully-loaded variant of the T-Roc in India.
Apollo Tyres management takes a pay cut
The top management of Apollo Tyres has taken voluntary pay cut taking into account the impact of the coronavirus (COVID-19) pandemic on the automotive industry, the company informed the exchanges on March 20.
Chairman and Managing Director Onkar S Kanwar and Vice CMD Neeraj Kanwar have taken a pay cut of 25 percent each while the senior management will be taking a 15 percent hit in their salaries.
Ashok Leyland to acquire 19 percent in the group finance company
Ashok Leyland touched a fresh 52-week low of Rs 50.15, falling 22 percent intraday on March 19 after the company approved the acquisition of up to 19 percent additional equity shares in Hinduja Leyland Finance from the existing shareholders in tranches.
The company is to acquire a stake in Hinduja Leyland Finance for a consideration not exceeding Rs 1,200 crore subject to approvals, consents, sanctions and permissions of the appropriate authorities.
Tata Motors shuts down UK plant
Tata Motors-owned Jaguar Land Rover (JLR) on March 20 announced a temporary production suspension at its UK plants in light of the social distancing underway to combat the coronavirus pandemic, which has led to 144 deaths in Britain.
The UK's largest carmaker said the suspension would come in place from next week and last at least until April 20, when it will be subject to a review of the “rapidly-changing circumstances”.
Tata Motors may shut down Pune plants due to virus scare
Tata Motors is the biggest automotive sector employer in Maharashtra with two manufacturing plants, a research centre and multiple offices in Mumbai and Pune.
Hero appeals to SC for 3 months time after failing to cut down production
This week India’s largest two-wheeler maker Hero Motocorp became the first and only automotive company to approach the apex court seeking an extension of the deadline set for sale and registration of Bharat Stage IV (BS 4) models.
The company has sought three months for exhausting the soon to be obsolete BS-IV stock. In other words, the maker of Splendor and Maestro seeks time till June to sell the last of the BS-IV model it has in its inventory including those which are lying with its dealers.
“The company has filed an interlocutory application before the Hon’ble Supreme Court of India seeking relaxation of the deadline set for sale or registration of BS-IV vehicles i.e. 31.03.2020. In view of the completely unforeseen developments that have arisen out of the prevailing force majeure situation on account of COVID-19, we have prayed for an extension of time for a period of three months, as this has hampered all aspects of our industry”, Hero said in a statement released to BSE.
Despite the known sluggishness in demand Hero kept producing and pushing BS-IV grade models into the market right till the middle of February even though the industry was going the other way.
As per data shared by the Society of Indian Automobile Manufacturers (SIAM) Hero Motocorp’s supplies to its dealers came down by just 5.6 percent in December and 14 percent in January as against 17 percent and 16 percent recorded by the industry during the same two months, respectively.
This means that even as the industry cut down production of BS-IV grade models Hero continued to produce more than the industry standard. The company ignored the telltale signs, which is evident from the statement made by one of its senior executives during an analyst conference call.
“As far as inventory is concerned we were down to close to six weeks at the end of December. And by January-end we are down to five 5 weeks of our retail. So effectively, inventory is a non-issue. And pretty much we're geared for a transition”, said a Niranjan Kumar Gupta, CFO, Hero MotoCorp.
The executive also admitted that much of this inventory was BS 4 grade although no precise split between the two technologies was shared by the company. Only in February did Hero cut down on its supplies to dealers with sales dropping 20 percent compared to 17 percent of the industry during the same month.
While Hero said it had planned to start retails of BS 6 models only in March its rivals such as TVS Motor Company and Honda started selling BS 6 models months ago. TVS stopped production of BS 4 in January itself while Honda moved to 100 percent BS 6 in the last week on February.By February Bajaj Auto, the Pune-based maker of Pulsar motorcycles, continued to produce BS-IV grade models though much of its inventory was replaced by BS 6 upgrades. The company said that by first week of March all of its BS 4 stock will be liquidated.
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