Indian Automotive Sector

RISING SUN

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Transport Corporation of India: More tailwinds at a reasonable valuation
Transport Corporation of India (TCI), India’s leading integrated multimodal logistics service provider, reported a strong set of numbers in the last quarter of FY18. The growth in revenue and profitability was driven by strong performance of the Seaways and Supply Chain Solutions business segments. Transport Corporation of India continues to perform well on the operational front and the current valuations makes the stock noteworthy at current levels.


The sales for the quarter increased by 26 percent to Rs 605 crore. EBITDA grew 54 percent at Rs 61 crore while profit after tax nearly doubled to Rs 33 crore. The company ended the fiscal year on a solid note and reported a topline growth of 21 percent and bottomline growth of 54 percent.

TCI operates through three business segments and provides multimodal logistics solutions to its customers. TCI Freight division enables surface transportation, TCI Supply Chain Solutions designs and develops integrated supply chain solutions for corporates and TCI Seaways caters to coastal cargo requirements for container and cargo movements. The company is witnessing demand across all its business segments post-rollout of the Goods and Services Tax (GST) in July last year.


Freight division reported a topline of Rs 1,029 crore for FY19, implying a segmental revenue growth of 12 percent. Margins came in better compared to last year as the management focused on large clients and key account management with value-added services. This segment continues to grow at a steady pace as organised players like TCI are witnessing uptick in demand for Full Truck Load and Less Than Truck Load services post-rollout of GST and E-way bill.

Supply Chain Solutions (SCS) business segment continues to witness good industry demand across sectors, especially automobiles which contribute to the largest revenue share in this segment. The revenue growth in this segment was driven by large contract sizes from existing clients as well as addition of new clients. TCI plans to increase the share of SCS business from current levels by rendering post-GST supply chain restructuring services and increasing focus on third-party logistics services.

Seaways division reported the strongest revenue growth across its three business verticals and reported a jump of 62 percent in FY18. Strong performance of the Seaways boosted the profitability of the company at consolidated level as it has considerably higher margins compared to the other verticals. In March 2018, TCI has added another ship to its existing fleet of five ships which operate on the east and west coast. The new ship will be deployed on the west coast and will start contributing to the topline and bottomline once it starts commercial operations in June-July. The management expects the Seaways business to grow at a healthy rate and contribute 12-15 percent to the total group revenues. Going forward, the company plans to add one ship every 12-18 months.

The company has planned a capital expenditure of Rs 250 crore for FY19. This capital will be used for setting up new warehouses and acquiring a new fleet of trucks and ships. The investment will be funded through a combination of debt and internal accruals. The balance sheet remains healthy and the debt-equity ratio is expected to increase moderately from the current levels of 0.6x.
Oil forms around 40-50 percent of the total cost basket for TCI. Accordingly, it has signed price escalation contracts with its clients to mitigate the commodity price risk. However, the inability to transfer the price hikes to customers could impact profitability of the company.

Aided by industry tailwinds and increased economic activity, the managements expects the momentum to continue in FY19 and expects a topline growth of 15 percent. The growth will be supported by recent government initiatives such as Dedicated Freight Corridors (DFC), Sagarmala and BharatMala as well as growing industry demand.



Considering the growth prospects, TCI (CMP: 285; Market Cap: 2,187 crore) currently trades at an attractive forward price-earnings multiple of 18x and provides significant scope for re-rating as the majority of industry peers trade in the range of 22-25x.

In the medium term, there could be potential upside in the stock through demerger of SCS business. This could lead to significant value unlocking for shareholders as the listed third-party logistics peers — Future Supply Chain Solutions and Mahindra Logistics — trade at more than 30 times forward price-earnings multiple. TCI has previously demerged its express logistic business (TCI Express) in 2016 and expect it to follow suit once the SCS business reaches a scale of 1.5-2x of the current size.
Transport Corporation of India: More tailwinds at a reasonable valuation
 

RISING SUN

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India gets first automated vehicle scrapping and recycling facility
If you are looking to get your old car scrapped with convenience, here is some good news. The country’s first automated and organised vehicle scrapping and recycling facility is up and running in Greater Noida, a satellite town outside the capital.

The five-acre facility, set up by M&M through a joint venture with government owned company MSTC, went on stream in April this year. Construction of five more facilities at different locations of the country is underway and expected to become operational by March next year.

The company claims it has got a better than expected response to this new unit. “We have mostly recycled cars that are 15-20 years old. The facility can also recycle old trucks, buses and consumer durables. We chose the national capital region to start our first facility since the region is estimated to have a large ageing population of vehicles,” Sumit Issar, managing director at Mahindra Accelo, told Business Standard. Mahindra Accelo and MSTC have an equal partnership to set up these recycling centres under a company called CERO.

CERO is buying vehicles directly from owners and at auctions. The facility evaluates the vehicle and recycles steel, batteries, electronics, engine parts and other metals, etc. Issar said the company has managed to sell the recycled steel to domestic industry for re-rolling. He, however, declined to share the number of vehicles recycled so far but said the response has been good. He expects the facility to achieve a full capacity utilisation by March next year. The unit can scrap and recycle around 500 units a month.

CERO promises to take care of the entire process from towing a vehicle to dismantling, deregistration and recycling. The owner of vehicle gets a certificate of destruction with details of the vehicle and the date of recycling.
CERO pays the owner a price for the scrap. This price varies with the vehicle type, age and condition. An owner can also donate the vehicle to CERO, which has a tie-up with a Mahindra NGO dedicated to education of underprivileged girl child. The NGO will provide the owner 80G certificate for tax exemption. The facility uses world class equipment and processes to recycle vehicles so that there is zero damage to the environment. The aim is to minimise pollution in the country by taking such old polluting vehicles off the road. CERO promises a safe and efficient recycling.

Issar said the company has imported equipment from the US and Europe for this plant.
CERO is doing digital marketing of the facility for now and is promoting the concept at vehicle dealerships, garages and among the insurance companies. “Going forward we expect a high traffic at our recycling facilities,” said Issar. India, the fifth biggest market for cars, does not have vehicle scrappage policy as of now. The government is working on a policy that will offer owners some incentives for getting the old vehicles scrapped when they purchase a new one. Initially, the policy is expected to cover only old commercial vehicles.

At Greater Noida

  • The five-acre facility, set up by M&M through a joint venture with government owned company MSTC
  • Mahindra Accelo and MSTC have an equal partnership to set up these recycling centres under a company called CERO
  • CERO is buying vehicles directly from owners and at auctions
  • The facility evaluates the vehicle and recycles steel, batteries, electronics, engine parts and other metals, etc
  • CERO pays the owner a price for the scrap. This price varies with the vehicle type, age and condition.
India gets first automated vehicle scrapping and recycling facility
 
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How India fares in the electric vehicle race
India is aiming to reduce its overall oil import bill and pollution levels across cities in the coming years. Electric vehicles will play a significant role in achieving this target. Mint takes a look at where India has reached and what remains to be done.

What is India’s policy on electric vehicles?

The National Electric Mobility Mission Plan (NEMMP) was launched in 2013 by then prime minister Manmohan Singh. The United Progressive Alliance had envisaged electric and hybrid cars reaching 6-7 million units by 2020. However, under the next phase of the Faster Adoption and Manufacturing of Hybrid and Electric vehicles scheme, or FAME, the National Democratic Alliance has set a target of increasing the number of electric vehicles to 4% of overall new vehicle sales over five years starting 2018-19. The department of heavy industries plans to spend Rs9,381 crore in this phase.

What has happened over the past 2 years?

The government had initially decided to promote only electric vehicles to reduce pollution levels. It had also proposed to shift all public transport and 30% of private vehicles to electric by 2030. Later, it shelved its plan to form an India EV policy and decided to promote zero-emission technologies. Through Energy Efficiency Services Ltd (EESL), the government put out a tender to procure 10,000 electric cars, which was won by Tata Motors Ltd and Mahindra and Mahindra. Procurement has been delayed due to lack of car charging points.

Are Chinese companies part of this story?

Firms such as BYD Auto Co. Ltd have launched products such as electric buses in India. BYD will also supply electric buses to some state transport firms.

How are Indian firms placed in the game?

Mahindra has a first-mover advantage in electric mobility. The company plans to make 60,000 electric vehicles annually from 2020. The Indian unit of South Korea’s Hyundai Motor Co. Ltd is expected to launch its electric vehicle in 2019, while Maruti Suzuki will enter the market by 2020. Tata Motors has developed the requisite technology. Many two-wheeler firms have also invested in developing products in the electric space.

What is the size of the EV market in India?

The EV market in India was about 25,000 units at the end of 2016-17. Of the total EVs sold, nearly 92% were two-wheelers, while electric cars and four-wheelers accounted for less than 8% of total sales, according to Society of Manufacturers of the Electric Vehicles. A study conducted by the group showed that 4,330 EVs were sold in Gujarat, 2,846 in West Bengal, 2,467 in Uttar Pradesh and 2,388 in Rajasthan during the fiscal year.
How India fares in the electric vehicle race
 

RISING SUN

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Hyundai chooses India for regional headquarters, new model launches return after a brief lull
New model launches – both in two and four wheeler – returned after a two- week lull. As many as four new launches dotted the week even as other manufacturers got busy formulating marketing plans for their launches post the monsoon season.

Japanese automaker Mitsubishi quietly relaunched the Outlander in India at a price of Rs 31.54 lakh, making it the company’s first car launch in six years.

In new bikes, Italian super bike maker Ducati launched the Multistrada 1260 at Rs 15.99 lakh whereas Japanese two-wheeler giant Kawasaki introduced the model year 2019 Ninja 1000 at Rs 9.99 lakh.

Showcased at the Auto Expo this year utility vehicle specialist Mahindra & Mahindra launched the nine-seater version of the TUV300 having the additional moniker of Plus. The vehicle will be available in three trims with prices starting at Rs 9.47 lakh.

Skoda Auto confirmed that it will use one of Volkswagen’s platforms for a revival plan in India that will see the Czech automaker launch new products starting 2020.

Regulatory norms

New regulatory norms and onset of Bharat Stage VI could make smaller commuter bikes with engines of 150cc-180cc cost as much as a 350cc bike, a senior official said.

Meanwhile, Korean car brand Hyundai made a very important decision for the Indian market. The maker of vehicles like Elite i20 and Creta said it had chosen India as its base for a regional headquarters – one of only three globally.
India’s growing importance in the global automotive market where Hyundai has steadfastly held on to the rank of being the country’s second largest for many years has also helped the company prefer India over China for its new headquarters.

The other two such headquarters are based in North America and Europe. Hyundai’s affiliate brand Kia, which will start building and selling cars in India from the second half of 2019, will also report to the India headquarters.

This is part of a global business reorganization plan, which will be effective from July 2 and will be complete by 2019. The move also marks Hyundai’s 20 years anniversary of first stepping foot on Indian soil.

"As the business environments for carmakers are rapidly changing and automakers now face fiercer competition, Hyundai and Kia have decided to allow the regional operations centers to make quick changes to reflect vehicle demand and make timely sales-related decisions in the major markets," Hyundai said in the statement.

What led Hyundai to this?

Maruti Suzuki dominates the Indian car market with a share of 50 percent. More than half of Suzuki’s global revenues come from India. The India subsidiary of Suzuki has established a far greater autonomy and independence in the decision-making process over the years helping it to tune itself to changing market needs faster than any other automotive company in India.

Though Hyundai Motor India has a full-fledged product development center in the country the company relies on its headquarters in Seoul for formulating its strategies which often costs time. For instance, it took Hyundai two years to figure out if it needs a new facility in India and whether and also an equal time to know if it needs to bring back the Santro brand, a very popular model in India that it phased out some years ago.

Other decisions such as production capacity, formulating sales and marketing plans, product positioning in the segment, sourcing of components have to be taken in joint consultation with the Seoul headquarters.

“Under the regional headquarters arrangement, the companies will establish supplementary divisions in charge of planning, finance, products and customer services”, said the company in a statement.

With the establishment of its India headquarters, senior managers of the Korean brands will be able to take decisions faster and efficiently to meet local demands. This means the India outfit won’t have to go back to Korea to seek plan approvals.

This will perhaps help the company improve market share in India which has been largely stagnant at around 15 percent. After the roaring success of Santro and i10 Hyundai declared that it will aim to dethrone Maruti Suzuki to become the largest car maker in the country.

With sales of just 5.2 percent last financial year, Hyundai notched up sales of 5.36 lakh as against 5.09 lakh sold in 2016-17, as per data shared by the Society of Indian Automobile Manufacturers. Much of that growth came from just three models, Creta, Grand i10 and Elite i20.

Hyundai’s growth was lower compared to the industry which grew by 8 percent. This led to a small correction in its market share which fell to 16.3 percent from 16.7 in 2016-17. Maruti Suzuki’s sales grew by 14 percent to 1.65 million units last year closing the year with a market share of 50 percent.
This week in Auto: Hyundai chooses India for regional headquarters, new model launches return after a brief lull
 
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RISING SUN

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India’s taxi-app war mimics China slugfest
India is the new big-money problem in ride-hailing. The parent company of homegrown operator Ola has disclosed that it lost more than $700 million in the year to March 2017. That makes the country almost as expensive a place as China was for Uber to burnish global credentials before it sold out to a local rival. With the U.S.-based company committed to India, losses will probably keep piling up.

The latest filings show losses widened significantly, from about $460 million a year earlier, even as revenue increased 70%. If the pain continued at the same pace in the 12 months since, Ola could now be haemorrhaging more than $1 billion. It raised $2 billion of new funding late last year at a $7-billion valuation, according to media reports.

When Uber was being run by founder Travis Kalanick, it was burning through a similar sum in the People’s Republic before handing over its operations to Didi Chuxing in 2016 in exchange for a minority stake in the combined company.

In India, Uber is only 10 percentage points behind Ola in terms of market share, according to Counterpoint Research. That’s a narrower gap than Uber faced in China. This helps explain why under new boss Dara Khosrowshahi, Uber is doubling down on investments in its core markets, including India where it says it has no interest in entering a minority deal with its larger local rival.

That is despite both companies sharing a large common shareholder in Masayoshi Son’s SoftBank.

It also underscores the urgency of the first push overseas, into the Australian market, by Ola boss Bhavish Aggarwal. The move represents an intrusion into one of Uber’s strongholds, which suggests that Mr. Son has limited clout when it comes to preventing costly competition among his many investments across the ride-hailing industry.

‘Aussie profits can help’

Generating profit Down Under would help Ola with its fight back home against Uber, which can use cash from more developed markets to subsidise operations in developing ones.

Yet Didi also announced on Friday it was heading to Australia, so the market may not long be a lucrative one. For now, however, India is the battleground draining resources apace.
India’s taxi-app war mimics China slugfest
 

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India-bred Vazirani Shul Concept officially revealed at Goodwood



- The Vazirani Automotive Shul claims to be India’s first hypercar.
- It is powered by a turbine-electric powertrain.
- The development of the concept was helped by Michelin and Force India Formula 1 team.
Vazirani Automotive has finally taken the wraps off the Shul Concept at the 2018 Goodwood Festival of Speed. The Shul Concept looks futuristic, to say the least, and the new-found carmaker promises to put the prototype for testing later this year.

The highlight of the Shul Concept is its unconventional powertrain. It has an eco-friendly, jet turbine powerplant feeding a four electric motor set-up. The rapid, torque-heavy performance promises instant acceleration without compromising on the range. Vazirani has worked with a company in the UK for the development of the turbines. There is also a single ratio gearbox.



The Shul has a carbon-fibre tub chassis similar to the one in BMW i8. In fact, carbon fibre has been extensively used, which helps in reducing the overall weight of the car. The exterior shape is specifically designed to keep the car as aerodynamic as possible. There are smooth body panels with no over-the-top design. Most of the styling is reminiscent of the Pininfarina H2 Speed Concept. The headlight design is sharp and it is complemented by a sleek profile. A fin-type spoiler sticks out at the back with boomerang-shaped tail lights. The styling is minimalistic with no flamboyant elements.

The futuristic wheels hide Brembo brakes and the car sits on Michelin tyres. There have been some inputs from the Force India Formula 1 team during the development, and the support will continue when the prototype commences testing later this year. No other technical details are available at the moment.

Chunky Vazirani, founder and chief designer of Vazirani Automotive, insist that the Shul is India’s first hypercar, however, the development will be carried out in California. When it does go into production, however, it will be toned down a bit. But we hope it carries over the styling. The limited production run will keep the price tag exorbitant.

All the same, the Shul Concept delivers its promise of bringing an Indian-bred hypercar to the global platform. Now all we need to do is twiddle our thumbs and wait until we can witness the Shul on Indian roads.

 
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India moves closer to electric-powered public transport; Fin Min approves Rs 3.5K cr for 10 cities
The union finance ministry has approved approximately Rs 3,500 crore for second phase of Faster Adoption & Manufacturing of Hybrid and Electric vehicles (FAME) policy to press on the sale of electric automobiles in India, Moneycontrol has learnt.

“The ministry of finance has approved a corpus of about Rs 3,500 crore to fund FAME II scheme over the next five years,” a source in the know said.
Department of Heavy Industries (DHI), who is spearheading the scheme, had sought close to Rs 12,256 crore from the government to fund the scheme which will provide subsidy to only public transport like buses and passenger fleet (cabs) in the second phase.

Moneycontrol first reported in June that finance ministry had returned the draft note circulated by DHI after it raised questions over the funding mechanism of the scheme.

An official had told Moneycontrol that the proposal sent by DHI was returned by finance ministry seeking a more comprehensive scheme framework.

FAME scheme was launched by union ministry for heavy industries in 2015 for two years to subsidise the purchase of electric vehicles. Under the scheme, the government provides subsidy up to Rs 22,000 on two-wheelers, Rs 61,000 on three-wheelers and Rs 1,87,000 on four-wheelers.

The first phase of the scheme, which was to end in March 2017, was extended till March 2018. As the draft for the second phase failed to get the government’s nod till then, it has been extended till at least September this year.

In a meeting held on Wednesday, the finance ministry met various stakeholders including officials from road ministry, department of heavy industries and ministry of electronics and information technology among others to discuss the scheme.

“FAME II scheme has been accepted by the finance ministry… This time a flat rate of Rs 10,000 per kWh for two-wheelers and Rs 20,000 per kWh for buses has been set as subsidy,” another person privy to the development said.
According to the note prepared by executive finance committee (EFC), and reviewed by Moneycontrol, about Rs 450 crore have been kept aside for high speed two-wheelers, Rs 300 crore have been kept for low speed two-wheelers, Rs 100 crore for light commercial vehicles and Rs 2,500 crore for buses.

“Although all Electric Vehicle Initiative countries do apply purchase and demand subsidies, a comparison of the purchase cost and the total cost of ownership (TCO) for EVs and internal combustion engine (ICE) vehicles across European markets suggests that financial incentives are most effective when they minimise the EV purchase premium and come with a TCO advantage compared with ICEs,” the note said.

The note further added that in order to hand-hold the EV industry, Centre should consider including “200 percent weighted deduction on investment made under R&D, for Income Tax calculation purposes, beyond 2020”.

Sources said that the department of expenditure has accepted the note in entirety barring a clause related to set up a fund to provide subsidies to startups.

“The finance ministry has approved most of the things mentioned in the note except for a start-up fund,” the second source added.

The proposed fund of about Rs 500 crore was for startups interested in manufacturing electric vehicles.

“DHI had proposed a fund for startups interested in starting EV manufacturing. The Finance ministry, however, has concerns about it since the mechanism to provide that subsidy was not clearly mentioned in the note circulated by the EFC,” the source added.

The fund would have been similar to M-SIPs or modified special incentive package scheme. Such schemes provide the capital subsidy to firms setting up their manufacturing units in special economic zones and/or reimbursement of central taxes and duties.

Sources added that the government is focusing on providing ‘non-fiscal’ incentives to the electric automobile industry.

Moneycontrol reported in June that Centre was planning non-financial incentives to promote electric mobility in the country.

These included tightening of fuel efficiency norms, green number plates for electric cars, standardisation of charging standards and shoving cab aggregators to include a certain percent of electric cars in their fleet.
Sources also said that government will strongly push for CAFÉ norms to promote electric fleet in India.

Corporate average fuel efficiency (CAFÉ) norms require cars to be 30 percent or more fuel efficient from 2022 and 10 percent or more between 2017 and 2021. The efficiency will be judged on the basis of fuel consumed per 100 kilometers.

“So automakers will have to convert certain percent of their fleet into electric… ,” the source said.

The centre is now planning other non-fiscal incentives like exemption of toll taxes for electric vehicles during initial few years and providing permits to run electric three-wheelers across the country.

“There are several other ministries working on EVs… Consider ministry of road transport, they have brought green number plate for EVs for easy identification,” said one of the sources.

“Finance ministry has decided to reduce import duty on motor and charging parts of automobiles. While motor was exempted, parts were taxed at 7.5 percent custom duty which touched 10 percent with cess,” the person said adding that the part now is exempted from such tax.

FAME II scheme is expected to be implemented across 10 cities selected by Niti Aayog, government’s policy thinktank, on a pilot basis.

As far as charging stations are concerned, media reports have suggested that the government is planning to set up 30,000 slow charging stations and 15,000 fast charging stations over the next 3-5 years to improve electric infrastructure.

The process, however, is yet to be finalised as India hasn’t decided on standard charging protocol.

“There are five kinds of protocols worldwide for charging. So India has to choose one of them… DHI has a budget of Rs 50 crore for charging infrastructure but the ministry of power is yet to give the green signal,” sources said.

Among the protocols available, including combined charging system (CCS- European), CHAdeMO (Japanese), GB/T (Chinese) and Tesla Superpower, European and Japanese automakers have been nudging New Delhi for their standards due to huge market reach.

New Delhi intends to increase the penetration of electric vehicles from current one percent to at least 40 percent by 2030; specifically under the new models segment being sold after 2030. This target translates to 4 million electric cars considering India becomes 10 million cars a year market by 2030.

Of the one percent EVs in India, 95 percent are low-speed scooters. Furthermore, against three million fuel based cars in India, there were merely 2,000 electric cars in 2016-17. The number stands at 23,000 for e-scooters against more than 16 million fuel based two-wheelers.
Exclusive | India moves closer to electric-powered public transport; Fin Min approves Rs 3.5K cr for 10 cities
 
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RISING SUN

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Auto companies have a new export market: India
India’s leading automobile companies are facing a piquant problem. Their factories are running at peak capacities, but the companies are unable to meet surging domestic demand for vehicles in the run-up to the festival season.

Caught in a bind, automakers such as Maruti SuzukiNSE -0.65 %, Hyundai Motor India, Bajaj AutoNSE -0.12 %, Honda Motorcycle & Scooter and parts suppliers like Apollo Tyres are diverting production meant for exports to meet local demand.

Hyundai that until a few years ago was India’s top exporter of cars, is gradually shifting export production out of the country and is also resorting to shipping vehicle kits instead of fully built vehicles to free up capacities to meet increasing local demand. Market leader Maruti Suzuki has kept exports stagnant, as the maker of the Alto and Swift chases fresh capacity to satiate requirements here.

THREE-WHEELER DEMAND
“We are operating at 98% capacity utilisation and with the new product launches, we are expecting higher demand in the domestic market,” YK Koo, managing director of Hyundai Motor India, told ET.

“Diverting exports to other bases and converting completely built units export to completely knocked down form will help us generate an additional capacity of 1lakh units.”

This capacity will help Hyundai cater to the expected high demand for its new entry hatchback, the new Santro, which will call for higher domestic outlay.

At Maruti Suzuki, which too has been operating at almost 100% capacity, exports have remained 1.2-1.25 lakh units a year.

Its exports grew 1.3% annually to 1.29 lakh units between FY15 and FY18, when domestic volume increased 11.9%.

A senior executive told ET that the company could have deployed more capacity to the domestic market, but it maintained exports at around 1.25 lakh units to hedge against raw material imports — it imports nearly 16% of raw material.

Apollo Tyres, India’s largest manufacturer of tyres for commercial vehicles, now serves European and Middle East markets from its Hungarian facility, which allowed it to increase local supplies by 10-12%. The company also plans to set up a factory in Andhra Pradesh.

MD Neeraj Kanwar said the demand was very strong and some of his key customers were forecasting strong double-digit growth in sales. “For me, the issue is how fast can I put up the factory so that I don’t lose sale.

We are losing volumes due to lower capacity,” he said. Expansion in Hungary, and moving of export production to the European facility, will help address demand in the home market for the time being, he said. Bajaj Auto, too, has ensured the growing local three-wheeler segment got priority over exports in the recent quarters.

Rival Honda Motorcycle & Scooter, meanwhile, will be allocating more capacity for the home market even as exports are rising for the India unit of Japanese manufacturer.

YS Guleria, senior vice-president of sales and marketing at Honda Motorcycle & Scooter, said production and export plans were made keeping in mind the seasonality factors.

“Naturally, there is high demand during festivities and we don’t want to miss out on it for the lack of capacity,” he said. For Bajaj Auto, three-wheeler demand picked up in several states with the opening up of new permits and removal of the permit system in Maharashtra.

The company management in the June-quarter earnings call said domestic three-wheeler volumes should sustain around 30,000 units a month and that the company had been gaining share in the diesel and cargo segments in the local market.

Balkrishna Industries, a manufacturer of off-highway tyres which gets more than 80% of revenue from exports, is witnessing higher growth in the domestic market. In the past three quarters, its sales volume in India grew 0.9%, 25% and 3.9% on year, respectively. These were faster than its total volume growth.
Auto companies have a new export market: India
 
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RISING SUN

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All cars in India could have driver assistance systems soon
All cars in India could have driver assistance systems soon

Historically car safety hasn't been a strong point for the Indian automotive market place. However, massive strides have been made recently towards improving safety on the roads. Airbags and ABS have been rapidly proliferating throughout segments at the moment as all new cars introduced to our market must meet more stringent crash test norms. By the following year, all existing cars will also be required to meet these norms. Other safety features, like reverse parking sensors and speed reminders, are set to become standard as well.

In an interesting announcement at the ongoing SIAM annual conference, Nitin Gadkari Minister for Road and Highway Transport said, “By 2022, we will work on a mandate on bringing Advanced Driver Assist Systems (ADAS) in all cars.”

Currently manufactures like Volvo and Mercedes do offer advanced assistance systems like adaptive cruise control, lane keeping assistance and automatic braking. However, their use on our roads remains very limited as these systems rely heavily on proper road signs and markings, as well as good surface conditions. It remains to be seen now how manufacturers will bring this technology to lower segments and the impact it will have on pricing. How the quickly will the government will be able to build necessary infrastructure required for these system to work effectively, also remains to be seen.
All cars in India could have driver assistance systems soon
 
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Talking to regulators in India to understand modalities, constraints for aerial taxi service: Uber
Ride-hailing app Uber, which is considering India among five global locations for its futuristic aerial taxi service, Thursday said it is in talks with regulators in the country to gauge the modalities and constraints of offering such a service. Last week, the Softbank-backed Uber had said it is considering India along with countries like Japan and France to be a part of Uber Elevate -- its aerial taxi service that could be launched in the next five years.

Uber has already named Dallas and Los Angeles as its first two launch cities in the US and has been on the prowl to select an international city as its third partner.

Uber head of Elevate, Eric Allison, said the company is looking at large Indian cities like Mumbai, Delhi and Bengaluru as potential candidates.

"...there are different challenges in each of these places and so we are talking to the regulators...officials... understanding what the tradeoffs are in terms of different geographic and regulatory constraints," he said.

The company is meeting representatives from various ministries like civil aviation, as well as local authorities and thought leaders to explore options.

Uber has shortlisted five countries -- India, Japan, Australia, Brazil and France -- and one of them will become the first Uber Air City outside of the US, Uber said in a statement recently.

Allison said while the service may be premium at the beginning, the attempt will be to bring the rates at par with its offering like Uber X.

Asked about India's chances of being selected finally, Allison said, "All of these countries (shortlisted nations) are very important to us and these are businesses where we are investing a lot in."

Uber has already said it hopes to start operating demonstrator flights in 2020 and begin commercial operations in 2023 in the three cities, depending on the regulatory clearances.

Allison said Uber Elevate would make a lot of sense for cities like Mumbai, Delhi and Bengaluru that are among the most congested cities in the world and where travelling even a few kilometers can take over an hour.

Minister of State for Civil Aviation Jayant Sinha said Thursday that the drone policy unveiled last month will make air taxi operations in India a reality soon.

Uber believes that its aerial service has tremendous potential to help create a transportation option that bypasses congestion, instead of adding to it.

The company had said its final decision, which will take about six months, will be based on factors like size of the market, and availability of enabling conditions. Uber Elevate will also take into account a third criteria of local commitment, where it will work with respective governments and communities to make the dream project a reality.
Talking to regulators in India to understand modalities, constraints for aerial taxi service: Uber
 
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nair

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Lot of change is gonna come in 2w.....ABS in 125 cc and above.....BS6.... Which will increase the price.....
 
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Milspec

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JLR needs to pitch a Jeep Wrangler competition in US markets asap, hopefully it will rework it's defender or a similar platform. Cutting through other SUV's for Harrier would be difficult especially in the IS markets unless positioned as a value buy, but even there Koreans have a big chunk of that market.

Areas I see a fair game in the US market is > Entry level pickup truck and a 4x4 budget vehicles.
 
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RISING SUN

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All Vehicles in India to Come Fitted With High Security Number Plates From April 1, 2019
All motor vehicles will come fitted with tamper-proof high-security registration plates (HSRPs) from April 1 to protect against counterfeiting, Parliament was informed earlier today. "The ministry has notified ... mandating that HSRP including the third registration mark, wherever required, shall be supplied by vehicle manufacturers along with the vehicle manufactured on or after April 1, 2019 to their dealers," Transport Minister Nitin Gadkari told Lok Sabha in a written reply. Gadkari said the proposal to amend the concerned rule in Central Motor Vehicles Rules, 1989 and revision of the HSRP Order, 2001 was placed in the public domain for soliciting objections/suggestions and was discussed in a meeting on June 5, 2018.

He said transport department officials of states, representatives from testing agencies like Automotive Research Association of India, Central Institute of Road Transport, Central Road Research Institute, and Society of Indian Automobile Manufacturers, attended the meet and supported the proposal.

"HSRPs have certain security features and are protected against counterfeiting. The plates are fastened with non-removable/non-reusable snap lock fitting system," Gadkari said. Manufacturers or suppliers of HSRPs, if so authorised by the state concerned, may also supply the HSRP for old vehicles after placing the registration mark, he said.

An HSRP is a chromium-based hologram applied by hot stamping on the number plates both at the front and back besides laser-branding of a permanent identification number, an official said. Third registration mark refers to a chromium-based hologram sticker affixed on the inner side of the vehicles' windshield which will have the details of registration, the official added.
All Vehicles in India to Come Fitted With High Security Number Plates From April 1, 2019
 

RISING SUN

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Jaguar Land Rover sold 4,596 units in India in 2018, up 16.23%
Tata Motors-owned Jaguar Land Rover Tuesday reported 16.23 per cent increase in its sales in India at 4,596 units in 2018.

The company had sold 3,954 units in 2017, Jaguar Land Rover India said in a statement.
The sales achieved in 2018 was the highest calendar year volume to date for the company. These were driven by models such as Land Rover Discovery Sport, Range Rover Evoque, Jaguar F-PACE, XE and XF, it added.

Commenting on the sales performance, Jaguar Land Rover India President and Managing Director Rohit Suri said, the auto industry faced strong headwinds in 2018, especially in the second half with tight liquidity conditions, increased upfront insurance costs and increased lending rates.

"Despite that, the growth of Jaguar Land Rover in India has been very encouraging for us and we continue to focus on strong product launches and an ever-improving customer experience in 2019 for the two iconic brands, Jaguar and Land Rover," he added.

In 2018, the company had introduced over 10 new products, including the Range Rover Velar, Range Rover Evoque Convertible, Model Year 2018 Range Rover and Range Rover Sport and Jaguar F-PACE in 2-litre petrol.
Jaguar Land Rover sold 4,596 units in India in 2018, up 16.23%
 

Ashwin

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Hyundai makes first move in India's electric car battle with Rs 7,000 cr cheque for Tamil Nadu

The Tamil Nadu Government's Cabinet of Ministers on Friday approved an investment of Rs 7000 crore by passenger carmaker Hyundai Motors that will allow the company to make its electric car foray into the country by manufacturing units from its Sriperumbudur facility near Chennai, according to two government officials aware of Cabinet developments on Friday.

"The investment is for an expansion of capacity at their plant near Chennai [Sriperumbudur]. Hyundai is one of your largest manufacturers and consistent investors in the state," said an official who wished to remain unidentified.

The official said that the Rs 7,000 crore investment also includes an exclusive electric vehicle incentive package for the company, and that a special incentive package has also been offered to Hyundai. Tamil Nadu had been rewriting incentive packages for its manufacturers after the implementation of GST, which took away the power of states to collect Value-Added Tax, an exemption of which was a large draw of early investors in Tamil Nadu such as Hyundai, Ford and other manufacturers.

The fresh investment and capacity expansion is expected to add 1500 jobs to the facility, according to the official.

A memorandum of understanding (MOU) is expected to be signed between the Tamil Nadu government and Hyundai at the Global Investors’ Meet to be held next week.

The company is also expected to increase its production by one lakh units with the fresh investment.
 

RISING SUN

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Two-wheeler exports from India rise 19.5 per cent in April-January
At a time when two-wheeler manufacturers are finding sales moving at a slow pace in the domestic market, their exports have risen by 19.49 per cent in the April-January period this fiscal, according to the latest data from auto industry body SIAM. Total two-wheeler exports during the period stood at 27,59,935 units as compared with 23,09,805 units a year ago, showed the Society of Indian Automobile Manufacturers (SIAM) data.

The growth in exports of two-wheelers from the country is driven mainly by motorcycles and scooters. Motorcycle shipments to foreign markets during the period stood at 24,12,800 units as against 20,34,250 units in the corresponding period last fiscal, up 18.61 per cent.

Likewise, scooter exports zoomed by 26.67 per cent to 3,32,197 units as compared to 2,62,253 units in the year-ago period, SIAM said.
Exports of mopeds grew by 12.3 per cent to 14,938 units, against 13,302 units a year ago. Recovery in markets such as Africa and Latin America has helped two-wheeler manufacturers crank up their exports from India, industry observers said.

Leading the two-wheeler export bandwagon is Bajaj Auto, which shipped a total of 14,50,766 units in the April-January period, a jump of 24.87 per cent. Chennai-based TVS Motor Co's exports also zoomed by 29.18 per cent to 5,04,799 units during the period, as per the SIAM data.

Honda Motorcycle and Scooter India also posted a 10.3 per cent increase in its two-wheeler exports to 3,25,759 units during the period. India Yamaha Motor posted a 2.39 per cent increase in its exports to 2,09,352 units, while Hero MotoCorp's shipments stood at 1,63,480 units, up 5.74 per cent.

The rise in exports comes at a time when two-wheeler sales in India have slowed down to single-digit growth. According to SIAM, two-wheeler sales in the domestic market stood at 1,81,25,656 units in the April-January period this fiscal as against 1,67,71,630 units in the corresponding period last fiscal, a growth of 8.07 per cent.
Two-wheeler exports from India rise 19.5 per cent in April-January | Business News
 
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RISING SUN

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All the Cities in India With Electric Bus Service - Lucknow, Hyderabad, Sabarimala, Delhi and More
According to a study from the World Health Organization, 9 out of every 10 people in the world breathe air that contains high levels of pollutants and kills 7 million people each year. Vehicular pollution has been a major source of air pollution and efforts are being made on a global scale to reduce the vehicular pollution as much as we can in the shortest possible time span. Electric vehicles are one such way to tackle the rising pollution level.

However, replacing the conventionally fuelled vehicles (gasoline/ diesel/ CNG) with electric vehicles needs a lot of R&D effort, infrastructure cost and willingness of consumers to spend extra on vehicles. In a market like India, all three possibilities will take years of hard work and constant effort from both central and state governments. What can be done, though, is implement the EV policy on commercial vehicles like intra-city buses.

A bus has to run a limited kilometres a day (say 200km) and can be charged using a charging station installed in the depot itself. The Government of India has realized the potential of electric buses and pushing for more and more e-bus to ply on roads. The Ministry of Urban Development of the country recently launched the Green Urban Transport Scheme (GUTS) with the aim to reduce carbon emissions from the public transport vehicles in the country. The ministry proposed an INR 250 billion grant for developing electric vehicles for public transport.

And a lot of state governments are also supporting the cause. Electric bus manufacturers like Ashok Leyland, Goldstone Infratech, Tata Motors, JBM Auto, Solaris, BYD are all working with various state governments to electrify our public transport. Here’s a list of the cities where the electric buses are already running on a trial basis or have started the full-fledged commercial operations.

JBM Solaris Eco-Life All-Electric Bus. (Image: News18.com)

New Delhi, Delhi
Bus Supplier – Olectra-BYD, JBM-Solaris


In a move to combat the increasing pollution levels in the capital city of India, the State Government of Delhi initiated the trials of Olectra-BYD’s 12 Meter electric bus – eBuzz K9 with a 35+1 (Driver) seating capacity. The ‘Make in India’ eBuzz K9 from Olectra-BYD will run on route number 534 between Anand Vihar ISBT to Mehrauli Terminal. These trials, which will be conducted for 3 months, will enable the authorities to evaluate the efficiency and competency of the buses in the standard road conditions of Delhi.

Also, JBM Solaris Electric Vehicles Ltd’s, 100% electric bus Eco-Life is on a trial run in Delhi. The company claims that Eco-Life, a Zero Emission Vehicle can save 1000 tons of carbon dioxide and 350,000 litres of diesel over 10 years of operation. Powered by fast charging lithium batteries, the bus can run 150-200 kms in 10-15 hours of city bus operation, depending on the city’s traffic conditions.

India's First Tata Motors Electric Bus Flagged Off from Lucknow. (Image: Tata Motors)

Lucknow, Uttar Pradesh
Bus Supplier – Tata Motors

Tata Motors will be supplying 40 units of the Ultra 9m AC Electric buses to the Lucknow City Transport Services Ltd (LCTSL) in a phased manner, within the next four months. The first Ultra 9/9m AC Electric bus was flagged off in Lucknow by the Minister of Urban Development, Suresh Kumar Khanna along with dignitaries from LCTSL and Tata Motors recently. The new bus will begin its journey from Alambagh depot. Manufactured at Tata Motors and Tata Marcopolo Dharwad plants, the Ultra Electric buses will have a travelling range of up to 150 kilometers on a single charge. The company has installed a charging station at the Alambagh depot for fast charging of buses.

Sabarimala, Kerala
Supplier - Olectra-BYD

In a first of its kind move, the pilgrims of Sabarimala can now travel in zero emission electric buses from Olectra – BYD. The company started the service with eBuzz K7 model, under Kerala State Road Transport Corporation (KSRTC). These Buses are manufactured in India by Olectra Greentech (Formerly Goldstone Infratech) in a strategic tie-up with BYD Auto Industry Co. Ltd. The 9-meter air-conditioned low floor buses have a capacity of 32+1 (driver) and has a range of 250 kms in a single charge. The high-power AC charging system enables the battery to get fully recharged in between 2-3 hours.

Olectra K9 Electric Bus. Representative image. (Photo: Olectra formerly Goldstone)

Manali, Himachal Pradesh
Supplier - Olectra-BYD


Goldstone Infratech Limited’s Zero Emission electric bus has officially started running under Himachal Pradesh Transport Corporation. The 25+1 seater Goldstone eBuzz K7 will ply between the Kullu-Manali-Rohtang Pass. This bus from Goldstone Infratech has the distinction of successfully completing trials at a steep gradient and over 13,000 feet altitude for the first time in the country. The bus which has been Made in India by Goldstone Infratech Ltd. has been certified by Automotive Research Association of India (ARAI), after extensive testing at part level and vehicle level at various testing facilities.

Dehradun, Uttrakhand
Supplier - Olectra-BYD


Electric vehicle manufacturer Olectra-BYD has said it has signed an agreement with Uttrakhand government to deploy 500 AC Electric Buses in the state with an investment of Rs 700 crore. As per the pact, Hyderabad based Olectra Greentech in a strategic tie-up with China's BYD Auto Industry will deploy the Made in India' eBuzz K7 (9 meter) and eBuzz K9 (12 meter) electric buses in the state. Olectra-BYD has started trial run for one month between Dehradun to Mussoorie and the charging infrastructure has been installed at Dehradun. The bus offers state-of-the-art technologies like CCTV camera, GPS navigation, panic button and many more to ensure the safety of passengers.

Hyderabad, Telangana
Supplier - Olectra-BYD


Olectra-BYD has begun commercial operations of eBuzz K9 eBus under the Telangana State Road Transport Corporation (TSRTC). These buses are part of a contract for deployment of 40 AC electric buses which TSRTC awarded on Gross Cost Contract basis to Olectra-BYD. The Department of Heavy Industry, under the Faster Adoption and Manufacturing of Hybrid and Electric vehicles in India (FAME-I) scheme has provided a subsidy of Rs 1 crore for each bus to Telangana. The 12-meter air-conditioned low floor buses having a capacity of 39+1 seats will ply from different locations in Hyderabad to Hyderabad International Airport.
All the Cities in India With Electric Bus Service - Lucknow, Hyderabad, Sabarimala, Delhi and More
 

RISING SUN

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India’s vehicle production crosses 3.15 crores in 2018 – Grows 14.56 percent
Growth in the automobile sector saw a notable increase over the past year. Production increased across all segments while domestic sales and shipments to foreign shores from India also maintained its pace.

Overall demand of two, three and four wheelers, passenger and commercial vehicles saw a notable increase in production and sales. In the passenger vehicle segment which included passenger cars, UVs and vans, production increased from 39,61,327 units in 2017 to 40,64,774 units in 2018, a percentage increase of 2.61. During the same year in question, domestic sales in this segment stood at 33,94,756 a 5.08 percent increase as compared to domestic sales of 32,30,614 units in 2017. Exports in this segment however, dipped by 5.26 percent from 740,095 units in 2017 to 701,157 units last year.

Maruti Dzire was No 1 car, Hero Splendor was No 1 bike in sales for 2018.
Sales in the passenger vehicle segment were way below expectations. Even though sales started out on a healthy note in 2018, rising fuel prices in the second half of the year, increase in interest rates and one time insurance premium introduced by the Government of India, led to a dip in volumes in this segment while the festive season also failed to bring in any significant sales.


In the commercial vehicle segment comprising M&HCVs (medium and heavy commercial vehicels), passenger and goods carriers, production surged 36.73 percent from 3,26,684 units produced in 2017 to 4,46,678 units produced the past year. Out of these, domestic sales increased 22.97 percent while exports went up 14.61 percent. Domestic sales which stood at 3,21,820 units in 2017 went up to 3,95,753 units in 2018 while exports increased from 43,583 units in 2017 to 49,952 units in 2018.





The LCV (light commercial vehicle) segment also noted an increase in production and sales. Production of passenger carriers and goods carriers in this segment saw production of 5,04,220 units in 2017 which increased to 6,63,193 units in 2018, a 31.53 percent increase. Domestic sales went up 27 percent from 4,68,358 units in 2017 to 6,09,627 units in 2018 while exports increased 9.59 percent from 49,640 units exported in 2017 to 54,400 units in 2018.


In the past year, a notable increase in production and sales of three wheelers were also noted. Taking passenger and goods carriers in this segment into account, production increased 42.07 percent from 8,77,917 units produced in 2017 to 12,47,250 units produced in 2018. Domestic sales increased 32.05 percent to 7,18,284 units in 2018 as against domestic sales of 5,43,928 units sold in 2017. Exports in this segment noted a marked increase by 55.96 percent. Exports in this segment, which stood at 337,629 units in 2017 increased to 526,559 in the past year.


Vehicles such as scooters, scooterettes, motorcycles and mopeds also saw an increase in production, domestic sales and exports over the period 2017 to 2018. Production in this segment increased 14.88 percent with a total of 2,50,94,653 units produced during the January to December 2018 period as compared to production of 2,18,43,475 units produced in the same 12 month period of 2017. Domestic sales surged 12.84 percent from 1,91,82,668 units sold in 2017 to 2,16,45,169 units produced in the year ago period. Exports on the other hand noted a 22.87 percent increase. Two wheeler exports which stood at 26,52,273 units in 2017 increased to 32,58,883 units in 2018, an increase of 22.87 percent.


It was even quadricycles that saw much demand, though most of it in global markets. Production in this segment which stood at 1,360 units in 2017 increased 209.19 percent to 4,205 units in 2018. Domestic sales were negligible in 2018 at just 178 units, however, sales in global markets went up from 1,308 units in 2017 to 4,049 units in 2018.


These sales figures took total production to 3,15,20,753 units in 2018 as against 2,75,14,983 units produced in 2017, a percentage increase of 14.56. Total Domestic sales through the year increased 12.70 percent from 2,37,47,408 units sold in 2017 to 2,67,63,767 units sold in 2018 while exports increased 20.15 percent from 38,24,528 units exported in 2017 to 45,95,000 units exported in the past year.
India’s vehicle production crosses 3.15 crores in 2018 - Grows 14.56 percent
 

RISING SUN

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Foreign carmakers' love affair with India goes sour as many brands exit
Over the past four years, three global automotive companies have announced detail plans for their India foray. At least two of these – Kia Motors and MG Motors – are in the final leg of launching their cars while PSA Peugeot
Citroen will take a couple of years.

A collective investment of around Rs 20,000 crore by the three companies is expected to come to India.
While this may seem impressive, the list of companies and brands who have exited India, or are on the verge of closing down, is much longer. From companies producing heavy trucks to premium SUV makers, to manufacturers of commuter bikes, India's auto space has witnessed an exodus of foreign carmakers over the past five years.

AMW, Ssangyong Motor Company, Eicher Polaris, Scania, Premier, MAN and General Motors are some of the brands and companies who have shut shop in India completely or partially in the vehicle manufacturing space.

Brands like Fiat and Mahindra Two Wheelers are likely to be the next ones to take the exit door. Fiat did not produce even one unit under its own brand in February. Mahindra has shifted focus to the premium offering, where at present it has Jawa.

Others such as Beiqi Foton, Changan Automotive, Great Wall Motors, Cherry Automobile, Geely, all headquartered in China as well as Volkswagen-owned Ducati had plans to have a manufacturing presence in India. These plans have largely remained on paper.

Heightened competitiveness, change in company strategy, high debt burden and poor product and brand recall are some of the reasons why these brands have failed in India.

For instance the joint venture company of Eicher Polaris, which saw an investment of more than Rs 350 crore, downed shutters in less than six years after the firm was incorporated. Its plant in Rajasthan that made a personal utility vehicle called Multix, remains closed.

Korean SUV brand Ssangyong was pulled out from India last year when its parent company Mahindra & Mahindra decided to launch a SsangYong product, G4 Rexton, under its own brand. SsangYong was pulled out of India due to a very limited brand recall value with many even failing to identify the country of the brand’s origin.

Volkswagen’s two truck and bus making companies MAN and Scania had to rearrange their business plans in the wake of poor demand for their products. Strong competition from home-grown companies like Tata Motors and Ashok Leyland restricted their growth.

While MAN shut down operations entirely, its sister concern Scania has exited the bus body making operations. VW group is instead rerouting investments to its car business, which includes the Skoda brand, to produce India-specific model.

Another VW-owned brand Ducati, that makes premium performance bikes, had plans to have a completely knocked down (CKD) plant operation in India. However, given the free trade agreement that India has with Thailand Ducati imports its models from instead of assembling them in India.

Investing in Bharat Stage VI emission norms and making it available at affordable prices was a challenge for all companies and may have proved to be a bummer for them.
Foreign carmakers' love affair with India goes sour as many brands exit