Here Are the Key Highlights of the Automobile Industry

It’s been, probably, the most eventful year for the automotive industry in India. We’ve always witnessed ups and downs in the market and this year too had a few of them but the beneficiary of everything – the rivalry, government plans or even recalls – has been the customer. We are, gradually, understand the rules of the road, which is why we are seeing a rise in participation from both the consumers and the government of the country.

Besides launching new vehicles in the country, there is a lot more that car manufacturers have contributed to and that is bringing products that will be sold globally but made in India, which shows the country’s potential to boom as a manufacturing hub. The year wasn’t a blur for us at all and so we give you a glimpse of the top 9 events that could summarise the year for the automotive industry in India.

1) Renault Kwid:

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Renault first showcased the Kwid concept at the 2014 Delhi Auto Expo and then announced plans to bring a small car to India. It was a bold move, considering that they were fairly new to the market and the competition in the segment was a huge one. Renault India, with the Kwid, decided to go up against the top two manufacturers in the country – Maruti Suzuki and Hyundai and to beat them wasn’t an easy task. Renault came out with a product which had more of features, power, space but less on price. The price tag during the launch of the car was 2.56 lakh (ex-showroom Delhi) and that stunned its competitors too. The Renault Kwid deserves an applause and just shows that a good product is always a hit with the customers.

2) Volkswagen India Recall/Scandal:

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It was probably the biggest news to hit the automotive industry and Volkswagen admission of using a cheat device to pass emission norms made things worse. The news hit the company’s operations in Europe in a big way and India too bore the brunt of this. Volkswagen India recalled 3.23 lakh vehicles after a government-ordered probe found the company guilty of fitting a cheat-device on many of its diesel engine variants. Speaking with regards to the mass recall, a senior government official stated,” The company will voluntarily recall 3.23 lakh vehicles which have been fitted with the E189 engines that are equipped with defeat device.” The Indian recall took place a few months after VW admitted to have fitted the ‘cheat device’ in 11 million of its diesel cars worldwide.

3) Maruti Suzuki Nexa Showrooms:

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Maruti Suzuki has always been at the forefront of innovation and this year was no different. The company could never crack the premium car segment in India, wished to leave no stones unturned this time. And to make it happen, the company inaugurated a new dealership range – Nexa – where only premium Maruti Suzuki cars will be sold. The first product sold through these dealerships was the S-Cross followed by the Baleno.

Designed on a ‘monochromatic’ theme, Nexa dealerships are developed to lure customers looking to buy premium cars, as they would offer them a plush buying experience. The Nexa outlet has a black & white monochrome colour scheme so that the spotlight is on the displayed products. The mission of NEXA is to offer innovative value and direction so that we can adequately respond to the new segments of Indian customers and offer them the experience which they value.

4) FAME – Govt offers incentives on hybrid vehicles:

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In a bid to promote green vehicles in India, the government launched the FAME India scheme- ‘Faster Adoption and Manufacturing of Hybrid and Electric vehicles in India’ – as a part of the National Electric Mobility Mission Plan. Under the scheme, the government will offer incentives on hybrid and electric vehicles; of up to 29,000 for two-wheelers and 1.38 lakh for cars. The government will spend 795 crore in the first 2 fiscal years under this scheme.

Starting with metropolitan cities, the scheme will be launched in all major and smart cities across the country. Under the scheme’s purview, battery-run motorcycles and scooters will be eligible for incentives in the price range of 1,800 to 29,000. Similarly, one can demand incentive in the range of 13,000 to 1.38 lakh if he/she buys an electric or hybrid car. For three-wheelers and light commercial vehicles, the incentives are in the range of 3,000 to 61,000 and 17,000 to 1.87 lakh, respectively. Whereas, for buses it ranges from 34 Lakh to 66 lakh. The launch of this scheme gives an impetus to the companies to introduce more hybrid and electric cars in India.

5) Chennai Floods:

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Considered to be the Detroit of India, Chennai has been at the centre of attention as many car manufacturers have had to bear the brunt of mother nature in November this year. Chennai received close to 50mm of rainfall in just one hour but the city continued to be battered by rain even in December and the city received 374mm of rainfall in just 24 hours in that month. To put things into perspective, the average rainfall that the city receives over the entire month of December is just 191mm. Companies like BMW, Nissan, Renault, Apollo Tyres, Hyundai and its suppliers were badly hit by this and the automotive hub might rack up $2.2 billion in losses. Production for almost all the companies stood at a standstill but the auto sector seems to be on its way to recovery now.

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6) Crash Tests to be made mandatory by 2019:

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With the growing emphasis on vehicular safety in India, authorities have started to question the credibility of India-made cars. Their poor performances in various global crash tests with the growing number of accidents and the repercussions have led to a lot of talk about crash tests being made mandatory in the country. In order to make our Indian roads a little bit safer for people, the Indian government this year stringent safety norms under which all new cars will have to undergo mandatory crash tests from October 2017 and automakers will have to equip their cars by October 2018. In fact the Automotive Research Association of India (ARAI) has developed a comprehensive testing facility at Chakan, near Pune, to crash test the new vehicles. As per the new order, cars would be tested for frontal crash norms at 56 km/h, while for the side crash test it will be at 50 km/h.

7) Make in India – Audi, Mercedes-Benz, BMW and TVS-BMW:

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Towards the end of 2014 PM Narendra Modi initiated the Make in India campaign in the country that encouraged Indian manufacturer to locally produce their products in India. While this initiative had a positive impact on many industries, it was the automotive industry in particular that saw some greater effects, especially the luxury car segment. A lot of these leading luxury car makers like Audi, BMW andMercedes-Benz have started manufacturing or assembling cars in India, which not only brought down production costs, but also their retail price.

In fact this year, BMW India not only started manufacturing its cars in the country but is also the initiated the production of its upcoming bike under the TVS-BMW partnership – the G310R. On the other hand Mercedes-Ben India introduced its ultra-premium brand Mercedes-Maybach and initiated the local production of the new Maybach S500. In addition a lot of auto manufacturer have started exported Indian made cars to various global markets like Middle-East, Africa and Mexico.

8) Diesel Vehicle Ban in Delhi NCR:

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One of the most crucial occurrences of 2015 that largely impacted the Indian automotive Industry was the Supreme Court’s recent ban on registration diesel vehicles above 2000cc in Delhi NCR. The court passed the order after a series of arguments presented by the National Green Tribunal (NGT), to deter the growing pollution caused by diesel vehicles. Currently the court has passed the order for a trial period of three months, which will enforced from January 1st 2016 going up to 31st March 2016. Post that period the authorities will evaluate the effects of the trial period and decide on a more permanent solution. This ban on registration of diesel vehicles in Delhi NCR will majorly impact the sales of Indian SUV manufacturers like Mahindra and Mahindra, Toyota India and Tata Motors along with luxury carmakers like Mercedes-Benz, Audi and BMW among others.

9) Hyundai Creta – Record Bookings:

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Earlier this year Hyundai India launched its much awaited compact SUV, Creta in the Indian car market that turned out to receive the highest number of bookings. Before launching the Hyundai Creta, the carmaker had participated in some very effective promotional activities that gained Hyundai some really impressive number of pre-bookings that went up to 15,000 units. Post launch, these numbers only multiplied and within a couple of months Hyundai Motor India had received over 70,000 bookings and 3,40,000 enquiries in India making the top selling SUV in the country. Moreover, the carmaker has recorded over 15,770 orders in international markets for the new Hyundai Creta, which pushed its the waiting period to nearly 10 months and Hyundai had to nearly double its production to 10,000 units per month. It has been less 5 months since the launch of the new Hyundai Creta and the carmaker says that it hopes to clock in 100,000 orders for its latest SUV by the end of December 2015