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Last Updated : Apr 13, 2019 09:30 AM IST | Source:

This week in Auto: PV sales slowest in 4 years; Can Ford give up India ops?

Here’s a rundown of all the major developments in the auto space this week

Swaraj Baggonkar @swarajsb
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Todays L/H

It is the age of collaboration at the world stage, and India should not be an exception. Extremely competitive market scenarios, challenging regulations, changing buying habits of consumers are leading to a surge in partnerships even from the unlikeliest of pairs. Peugeot Group and Fiat are looking for partners even as arch rivals Mercedes and BMW have joined hands.

Closer home a new chapter could be opening for two long-time partners that had got separated from each other only to reunite again. Today's wrap is based on this partnership but here's a rundown of all the major developments in the auto space this week.

Porsche launches 911 Carrera S

A few days after revealing its plans to launch the new 911, Porsche officially put the supercar on sale in India. Although it retains its iconic aesthetics, it has undergone serious mechanical upgrades.

The 911 Carrera S features an extensively re-engineered platform which has been grafted with aluminium in its rear for improved weight distribution. It also carries a heavily revised 3-litre, flat-six, turbocharged petrol engine which makes 444BHP of maximum power. That is a 30BHP increase over the previous generation.

SIAM urges govt to reduce GST on automobiles

Auto industry has approached the government to cut GST on passenger vehicles and two-wheelers from 28 percent to 18 percent to compensate the sector, which is expected to see a price hike in range of 10-15 percent with the coming of new emission and safety regulations.

The industry fears that with the increase in prices, the demand for their products would be impacted. Currently, automobiles attract peak GST rate of 28 percent with additional cess ranging from 1 percent to 15 percent, depending on the length, engine size and type.

Passenger vehicle sales grow only 2.7 percent in FY19

Passenger vehicle sales in India rose just 2.7 percent in 2018-19 as weak customer sentiment led by liquidity crunch, high vehicle prices and uncertainty revolving forthcoming elections put brakes on the sales growth in the segment.

According to data released by the Society of Indian Automobile Manufacturers (SIAM) Monday, domestic passenger vehicles (PV) sales were at 33,77,436 units in 2018-19 beating the previous record of 32,88,581 units in 2017-18.

BMW launches new Z4 at Rs 64.9 lakh

BMW has launched the Z4 Roadster in India and is offering it in two variants here - the sDrive20i priced at Rs 64.90 lakh and the M40i priced at Rs 78.90 lakh. The sDrive20i gets a 2-litre inline four turbo engine that produces 200 PS of power and 320 Nm of torque with a top speed of 240 km/h hitting 100 km from a standstill in 6.6 seconds.

The top spec M40i, on the other hand, gets an inline-six twin turbo motor capable of churning out 345 PS and 500 Nm. BMW claims a top speed of 250 km/h with a 0-100 km/h time of 4.5 seconds. Both engines are mated to an 8-speed Steptronic Sport Transmission.

FAME-II overlooks critical issues: Rajiv Bajaj

Voices of disagreement over government's incentive plan for electric vehicles have started to surface from the automotive industry.

Rajiv Bajaj, Managing Director, Bajaj Auto, said FAME-II (Faster Adoption and Manufacturing of Electric and Hybrid Vehicles) scheme overlooks the issue of lack of demand for such green vehicles.

Can Ford shut India ops?

The news about Ford and Mahindra (M&M) deepening their alliance in India became the highlight of the week in the automotive space. Where the two companies have been jointly involved in several new projects with regards to vehicle, engine and technology, a Reuters story claimed that Ford might as well shut down its independent operations to shift focus to a new joint venture company with M&M.

The 115-year-old company which was the flag bearer of American engineering for several decades is slowly but surely falling into the oblivion in several markets including India.

In February, Ford Motors Company announced that it will pull down the shutters on a Brazilian plant. Last month, news emerged that two of its plants in Russia could also follow suit.

Its money-losing operations in Europe are forced to undergo a restructuring which may involve production cuts and job losses.

Ford's China joint venture saw its sales fall to the lowest level since 2012 after recording a massive 54 percent decline in sales during 2018.

Several months ago it halted development activities of a new family of cars destined for India following lack of any substantial guarantee of its success.

The Ecosport, a compact SUV, remains the flag bearer for Ford in India, despite being into its seventh year. None of its other models such the Figo, Aspire and Freestyle do not feature in the top three in its respective segments.

The only bright spot for the struggling company which entered India in the mid-1990s has been the switch to profits during 2017-18. This was the first time that Ford recorded profits in India. However, the turnaround was largely due to export operations that dwarfed India sales.

Ford perhaps now has understood the risk of not taking India too seriously even when all manufacturers were pumping in investments in China, the world's biggest car market. Presently, Ford has to arrest erosion in market share in the US and Europe, whether the Chinese slowdown as well as play as an aggressor in India where the odds are stacked up heavily against it.

M&M with its multi-year understanding of the Indian market could be the right partner for Ford. Both companies can work on common platforms, reduce development costs and enjoy economies of scale. The two are working on a mid-size utility vehicle as the Ecosport is set to get an M&M-made engine.

Work on future mobility areas such as electric cars and shared mobility are also on the table. Collaboration in each of these areas will reduce costs significantly and boost margin probability higher for both companies.

M&M can make the most of Ford's next-gen mobility solutions like electric and hybrid tech, and also shared mobility. Plus Mahindra can tap into Ford's global retail reach (dealerships).

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First Published on Apr 13, 2019 09:30 am
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