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Temporary reduction in import duties to help build volumes required for manufacturing electric vehicles in

German luxury-car maker Audi said a temporary reduction in import duties will help build volumes required for manufacturing electric vehicles in India, at a time when the government has approved a Rs 25,938 crore production linked-incentive scheme (PLI) to encourage transition to green mobility.

While the company is evaluating the scheme for the automobile sector, it would have to attain certain threshold numbers before it can invest in making electric cars here, Audi India head Balbir Singh Dhillon told ET. “So that is why the request to the government is to reduce the import duties, even if it is done for three to five years. By that time, we could be able to reach a certain threshold volume where our decisions of foreign investments come through.”

In the short term, if the import duties are reduced, it would enable the company to bring more cars equipped with the latest technology to the country. On gaining adequate volume, it could also start making them locally, he said.

Audi joins the ranks of American electric car maker Tesla which has pitched for a cut in import duties, saying that the levy imposed by India is the highest among large countries and that it can only consider setting up a factory locally if it succeeds with imported models. India currently imposes 100% import duty on cars with CIF (cost, insurance, freight) value of over $40,000 and 60% on cheaper vehicles.

Dhillon said the company has received “unprecedented” response to the Audi e-tron and e-tron Sportsback launched in July. The company has sold off the first lot. With the launch of the Audi e-tron GT and Audi RS e-tron GT, priced at Rs 1.80 crore and Rs 2.05 crore (ex-showroom), respectively, the company now has five electric vehicles on offer in the country.

Dhillon said: “There is a lot of positive sentiment that we do see. And electric mobility, I personally believe, is coming much faster than what we anticipated so far.” In fact, 15% of the company’s portfolio in the country would be all-electric by 2025.

Overall, Dhillon said, sales of luxury cars have grown 47-48% in the local market in the first eight months of the ongoing calendar year. At Audi India, volumes have increased 115%, albeit on a low base. Dhillon said he expects the sales growth in the luxury vehicle segment to become even stronger going into the festive season.

Going ahead, Audi India would focus on growing sustainably in the Indian market, rather than merely chasing numbers, he said. “Numbers is just one parameter of success. We want to be successful in becoming number one in customer satisfaction, we want to be successful as the strongest brand in the country. And we want to do this sustainably, so that our dealer partners are also profitable”, said Dhillon.

With sales of more than 10,000 units, Audi India dominated the luxury car market in India in 2013 and 2014, but has since lost the top slot to compatriot Mercedes-Benz.

Virat Kohli’s comments divide brands he endorses

A video post by cricketer Virat Kohli in which he asked an enthusiast of the game to ‘go live somewhere else’ has created a storm on Twitter and pided companies paying him crores of rupees to endorse their brands.

“The issue is being blown out of proportion,” said Abhishek Ganguly, managing director of German sports lifestyle brand Puma in India. “Anyone who has seen the entire video on Virat’s fan app will know that he was speaking in jest in a section called ‘Virat responds to mean tweets.’”

Puma had associated with the Indian cricket captain to launch his lifestyle brand One8 last year.

“People know the respect Kohli has for cricketers from across the world. AB de Villiers, for example, is not just a great buddy of his but as per him, the most skilled cricketer,” Ganguly said.

“It was an emotional outburst, which can happen. Virat has proved himself in all forms of cricket and he should not be judged like the way he is being,” said Shripal Morakhia, promoter of Smaaash Entertainment in which cricketer Sachin Tendulkar has invested.

Officials of other companies expressed disappointment at Kohli’s video statement. “We are living in the age of social media and he being a youth icon and making statements like he did puts our brand in bad light too,” said a senior official of a beverage brand that Kohli endorses.

“This was unexpected of Virat. Any statement like this by a responsible brand ambassador can also drag the brand into question – unfortunately, it does get linked to brands he is directly associated with,” said a top official representing another brand that Kohli backs.

Both officials asked not to be identified because they are not authorised to speak to the media.

Kohli endorses about 18 global and Indian brands and is said to command a fee of Rs 4.5-5 crore a day for one-off appearances. Kohli is the most valuable celebrity in India, with a brand value of $144 million, according to a December 2017 Duff & Phelps report. Kohli’s endorsements include cab-hailing platform Uber, sportswear company Puma, UB Group’s Royal Challenge energy drink, Manyavar ethnic clothing, GSK Consumer’s malt drink Boost, virtual sports entertainment company Smaaash, Audi cars and Tissot watches.

Email queries sent to spokespersons of Uber, RP-Sanjiv Goenka Group, Herbalife, GSK Consumer and UB Group elicited no response till the time of going to print.

Brand experts said Kohli’s comment had crossed accepted lines.

“Nationalist jingoism in sport is not acceptable and Kohli will need to make amends for this in some way. Jingosim is okay in politics, but not in the world of sport,” said brand consultant Harish Bijoor.

“Someone of Kohli’s stature has to be careful of everything he says in public domain. It’s something that won’t be ignored or overlooked in today’s age of social media. However, unless such statements are made repeatedly, the person in question should not be judged,” said social commentator Santosh Desai.

Kohli tweeted on Thursday evening: “I guess trolling isn’t for me guys, I’ll stick to getting trolled! I spoke about how “these Indians” was mentioned in the comment and that’s all. I’m all for freedom of choice.”

His initial comment was in response to the tweet of a fan who said he preferred to watch English and Australian batsmen over Kohli. “Over-rated batsman and personally, I see nothing special in his batting. I enjoy watching English and Australian batsmen more than these Indians,” the fan had tweeted. Kohli responded by saying,

“Okay, I don’t think you should live in India then… you should go and live somewhere else. Why are you living in our country and loving other countries? I don’t mind you not liking me but I don’t think you should live in our country and like other things. Get your priorities right.”

His response is available on his mobile app launched on November 5. Kohli has over 27 million followers on Twitter.

Meet the man who steered Mercedez Benz back to pole position in India

The India head of Mercedes-Benz, Roland Folger has a valid complaint. Since 2015, when the 58-year-old took over the company’s India reins and shifted to Pune, he has been denied the pleasure of driving. “As a company policy, I am not allowed to drive here.” The rationale being that poor discipline on Indian roads can be difficult to deal with. For the German, used to autobahns with a speed limit of 130 kmph, India’s chaotic and congested roads are a picture in contrast. “Even in a city like Pune, things have turned for the worse. There is chaos of an unimaginable level,” he says.

Folger, however, has had the pleasure of another ride: of making Mercedes-Benz the largest selling luxury car maker in India.

This decade began on a bad note for Mercedes-Benz India Ltd (MBIL), which first lost the long-held crown to

BMW

. By 2012, Audi — part of Volkswagen Group — had pushed it down to the third slot. But MBIL returned to pole position by 2015. It has also become the world’s largest selling luxury car maker. Today, the company with the slogan “The best or nothing” leads the luxury car market in India by a huge margin.

Folger is now packing his bags. Come October, he will shift base to Thailand as head of Mercedes-Benz operations in Thailand and Vietnam. “Going to Thailand is like closing the circle.” In the 1980s, he first moved to Bangkok to take charge of a parts’ organisation of Daimler Group. “I have very fond memories of that place. My wife visited me there. We weren’t married then,” he recalls. He now has three children – daughters aged 27 and 21 and a 25-year-old son — who are based in Germany.

There’s another reason why Folger is looking forward to the Thailand stint. Unlike India, which has been tentative about its electric vehicle (EV) push, “Thailand is moving distinctly towards EVs,” he says. It will offer a good learning curve.

Sitting in his expansive corner office, located inside MBIL’s 100-acre plant in Chakan near Pune, Folger finds time to reflect on his India stint, though his schedule is packed with travel plans and multiple farewell dinners. “It is hard to say goodbye. My wife and I have made a lot of friends. We had a great time here.” Those fond memories are built on some robust business performance in India.

India can surprise you in many ways, says Folger, recalling an incident in his early days. He was inaugurating a dealership in Dehradun when a customer told him: “You have to promise that you will stay and not close down soon.” Folger was surprised by the request. But he soon discovered the reason for the request. Many luxury car makers opened showrooms in tier-2 and tier-3 cities but soon shut these down due to viability issues. This left customers in a lurch. Folger learnt his first India lesson then — prioritise after-sales service over sales. “A customer can drive a long distance to buy a car. But he expects after-sales service to be easily accessible.”

India was merely a microcosm of Mercedes’ global woes when Folger arrived here. Around 2011, Mercedes-Benz was facing multiple challenges. Apart from losing market share to BMW and Audi, the company was seen as a luxury car maker for old men. The product pipeline was uninspiring and the cool factor to lure millennials was missing. But MBIL was able to race back to the pole position because of a combination of global and India-specific initiatives.

Folger borrowed heavily from the global turnaround strategy but added enough India-specific initiatives, too. Portfolio revamp was the most critical step. His three-year tenure saw 30 model launches. MBIL launched new-generation entry-level models A, B, GLC and CLA to woo younger buyers. He calls the local production of long-wheelbase E-Class (its best-selling model today) as a game changer. The company also introduced the right-hand drive SUV GLC in India.

“Globally,” says Felipe Munoz, global automotive analyst at JATO Dynamics, “Mercedes’ new sporty young design brought back the cool factor to the brand.”

After-Sale Service
New dealerships and a differentiated customer service fortified MBIL’s strategy. Dealerships have risen from 78 in 2015 to 93 now. Focusing on service as a differentiator, it launched “service on wheels” — service trucks with tools and spares to attend to cars in locations where MBIL does not have a direct presence. It rolled out service packages of up to 10 years to lower ownership cost. The service packages helped E-Class become its best-selling model. “While our new E-Class is more expensive by 10-12% on paper, in real terms, it works out cheaper with these packages,” says Folger. Half of the E-Class sold now are under this package.

Organisational overhauls were also rolled out. Earlier, “left hand didn’t know what the right hand was doing”. Dealership promoters have been asked to appoint dedicated CEOs to improve management. Efforts have been made to expedite decision making.

The strategy seems to have worked. When the goods and services tax rates were announced in May 2017, the MBIL team worked out the revised rates within four days. “In the past, it could have taken a month,” says Folger. MBIL today leads with a 39% market share. Most importantly, the average age of a Mercedes buyer has come down from 45-plus to 37.

Rakesh Batra, partner (automotive), EY India, says: “MBIL has made significant investments in manufacturing localisation, product range, sales network and differentiated service, which has enabled their prime position.”

Folger’s India journey had started with some big bumps. Soon after he took charge, the government banned diesel vehicles. An upset Folger spoke about Germany stalling investments. The auto industry was hit by a diesel tax, luxury cess and myriad policy flip-flops. Folger has since recovered his German poise: “We see this as a market with a lot of potential. We are trying to figure out how best to grow here.”

MBIL is now laying out its 2020 strategy with a thrust on qualitative growth — increasing revenues without adding cost. It is also preparing for growing competition and shifting industry landscape. Volvo and JLR are growing and will slice the market in multiple ways, says Deepesh Rathore, director, Emerging Markets Automotive Advisors.

“We do not disregard anybody as a competitor,” says Folger. But he sees a fundamental difference in approach. “The Japanese have formed joint ventures with local partners to build a local network. But I don’t think that is a guarantee for success.”

Electric vehicles, today’s buzzword, do not excite Folger. “EVs are overrated. The world has too high hopes from EVs.” Look beyond tailpipe emissions and understand where and how electricity is being produced. There are no easy answers — thermal is polluting, nuclear energy has serious safety implications. To top it off, EV charging infrastructure is expensive but a critical prerequisite. “Now the Indian government is again talking about EVs in just top 10 polluting cities. That may be a better way to look at issues,” he says.

EV Plans
To hedge all risks, Mercedes is betting on a three-pronged strategy — improve its internal combustion engine technology, develop plug-in hybrids and make full-fledged EVs. It expects to have 10 EVs by 2022. “India has gone back and forth on its EV policy. China is rushing towards EVs faster than any other country. There are strategic thoughts behind it. China found out it could not compete in internal combustion engine technology so is betting big on EVs to get ahead in the race.”

But Folger is optimistic about India. He loves the fast pace, its young population, the emotional energy abound, the culture and warmth, and persity. “Unlike the West, where people think what’s in it for me, there is a high level of commitment here without holding back.” He says he hopes the country preserves its history before it is too late.

He wants the government to reach out to the industry more often. “We need more dialogues.” Instead of five-six ministries, the government should appoint one person for the industry. “There are challenges, but opportunities outpace everything else in this country,” he adds.

How Daimler deal gives Motherson a big push to achieve its American dream

NEW DELHI: For Motherson Sumi Systems, one of India’s largest auto parts makers, a Rs 15,400-crore order it just won from Daimler will take it closer to a cherished goal: achieving 30% of consolidated revenue from the Americas in the next five years.

Under the deal, the Noida-based company will set up two plants, one each in the US and Hungary, close to the German auto giant’s manufacturing facilities in those countries. Once these factories start production, it is expecting orders from other auto manufactures as well. Increasing orders from the Americas is part of Motherson’s strategy to reduce overdependence on Europe, from where the company got 58% of its consolidated revenue of over $5 billion in the fiscal year ended on March 31, 2014. North and South America accounted for 10% of fiscal 2014 revenue and 14% in the first nine months of fiscal 2015.

“We have been trying options to increase our business in Americas for the past two years,” Chairman VC Sehgal said. “With this new order from Daimler, we will have a backup to further push the journey of growth in this region.” Under the order announced last week, Motherson’s unit Samvardhana Motherson Automotive Systems Group would supply a range of exterior and interior systems for several future generations of Mercedes-Benz vehicles over a period of about five-and-half years. To support Daimler’s expansion activities, Motherson would increase capacity at its existing plants in Germany, besides setting up the new factories.

Supplies are expected to start in 2018. The company has already short-listed land for a plant at Tuscaloosa in Alabama near Daimler’s plant. The plant in Hungary will be located close to Daimler’s operations at Kecskemet.

The US plant will be first off the block. Construction is expected to start by the end of this year and trial production, by 2017-end.

“First, we will start off with Mercedes supply but as soon as we start getting orders from other customers, we will start expansion to service them from this plant,” Sehgal said on its plans for the new US factory.

The order is important for the company as it will help enforce its ‘3CX15 strategy’, which means no country, no commodity or no customer should account for more than 15% of turnover. The Volkswagen group, including units such as Audi, contributed as much as half the total revenue in fiscal 2014, compared with just 3% by Daimler. The new contract is expected to double Daimler’s contribution.

Sehgal said the Daimler order “will give us a balance”, which can be achieved not by “refusing orders from (existing) customers” but only by getting more new orders.

In August last year, Motherson acquired the wiring-harness business of an American company, Stoneridge, for $65.7 million. That gave a strong footing for it in the US, the largest automotive market in the world. Sehgal expects revenue from this to grow to about $1 billion in five years from about $300 million now.

 

The company opened its biggest plant in the US early this year at Marysville, Ohio. It invested $40 million in the automobile mirror manufacturing facility. Motherson is setting up another plant at Zitlaltepec in Mexico for manufacturing bumpers, rocker panels, wheel covers and other components. It is expected to start operations in the April-June quarter of 2016.

The company will unveil its new five-year plan on May 12. In the last five-year plan, announced in 2010, it had set a target to expand annual revenue to $5 billion from $1.5 billion. Motherson has achieved that goal — it posted revenue of $5.02 billion in fiscal 2014 and has grown at 14% in the first nine months of fiscal 2015. Industry sources and company executives suggest that in the new five-year plan, the company would target annual revenue to $15-18 billion. To achieve 30% of that from the Americas, it will have to generate about $5 billion from that market in five years compared with about half-a-billion in fiscal 2014.

Sehgal said the new targets will be unveiled in the board meeting on May 12. He said the company is looking at “phenomenal” growth, which will be met through expanding existing businesses, setting up new operations and acquisitions.

Audi’s Dynamic Q3 becomes livelier than before

Text: www.topgear.com/india

By Agasti Kaulgi

Yes, we know there was a new version of the Q3 just a couple of months ago. It was called the ‘Dynamic’ Q3. And yes, there’s an upgraded model already. And that’s because this one that you see here was revealed at the Paris Motor Show in October, and Europe gets it right away. But Indians will get it only in the second half of next year.

This is not an all-new car. And, majority of the things stay the same, like the drivetrain and the chassis. But, while we say this, let us also tell you that the engine and gearbox, though the same, have been tweaked to make them more efficient and nature-friendly.

In Europe, the Q3 gets quite a few engine options — the 1.4 turbo-petrol, 2.0-litre turbo-petrol and 2.0-litre turbo-diesel in two states of tune. India, just like it is with the current Q3, will only get the diesel motor. The one we have here is the 2.0 TDI that develops 181bhp and 380Nm of twist.

With the small changes made by the engineers in Ingolstadt, the engine makes a couple of horses more. The new Audi engines now have an intelligent cylinder deactivation system — it switches off a cylinder when there’s no need for a lot of power, and thus saves a bit of fossil fuel.

The engine is mated to a 7-speed, dual-clutch transmission that directs the power to all four wheels. This engine isn’t the ‘no turbo-lag’ kind. It’s quite sluggish at the lower end of the rev range. But this dual-clutch tranny does a good job of hiding this blemish.

The Q3 that we drove in Europe came with a suspension setup that was tuned for smooth, pothole-free roads. By that, we mean stiffer struts. But, by the time it comes to India, it’ll be softened to better suit our battered roads.

In the handling department, the earlier Q3 wasn’t as sharp as the GLA. This one isn’t any different. But, the thing that works in the new one’s favour is a heavier steering that isn’t as vague as the one on the pre-facelift car.

On the outside, the biggest change is up front, with an altered grille, restyled headlamps and bumper. Xenon headlamps are now standard, whereas LED turn indicators and tail-lamps are an optional extra.

The changes are subtle inside, too, and the Q3 continues to have features such as auto headlamps and wipers, electric seats and the MMI infotainment system as standard.

The new Q3 will be available in 6-speed manual and 7-speed auto versions. We expect the prices to see just a nominal increase, starting at about Rs 32 lakh and going up to Rs 36 lakh (both prices ex-showroom).

Audi Dynamic Q3

Engine: 1968cc 4cyl turbo-diesel

Power: 181bhp

Torque: 380Nm

Gearbox: 7-speed automatic

0-100kph (claimed): 7.9 seconds

Kerb weight: 1625kg

Price: Rs 36 lakh (est. ex-showroom)

The verdict: The fresh design helps make the Q3 livelier than before

Volvo cars to focus on small cities

Swedish luxury car maker Volvo is eyeing prospective customers living in smaller metros and tier-two cities in India as it bids to double its market share in the country to 10% by 2020.

“We are doing well in the smaller markets. We expect half of our growth to come from these tier two and mini-metros in future,” said Charles Frump, managing director at Volvo Car India.

Volvo Cars, owned by Chinese carmaker Geely, now plans to increase its dealership network with a focus on smaller cities. “The impact of urbanisation has influenced customer purchases in the tier-two and three markets. Expandable incomes and infrastructure development have led to growth in demand. These factors have, therefore, given a fillip to customer aspirations in these geographies,” Frump told ET.

Volvo Cars has already opened showrooms in Noida, Indore, Raipur and Kozhikode, and plans to open dealerships in Hubli, Thiruvananthapuram and Rajkot.

“We want to cover all geographies where there is a market for luxury cars. We enter the market only when we have a developed in-house infrastructure to service that market,” Frump said.

The company is betting on smaller compact showrooms and mobile showrooms to expand its presence in newer markets. “We have opened a compact showroom in Kozhikode and a boutique showroom in Noida,” Frump said. “It makes a good business case. This year we will have 24 sales points in 22 cities.”

Earlier, segment leader Mercedes Benz India also announced it will expand its dealer network for new as well as used cars to more small cities and expects it will contribute as much as 40% to its sales volume.

In 2017, luxury carmakers sold 40,000 vehicles in the country. Mercedes Benz leads the market, followed by

BMW

and Audi.

Volvo Cars expects the luxury car market to reach 50,000 by 2020, growing about 15% every year.

Luxury vehicle like Mercedes Benz, Audi prices set to go up on custom duty hike

NEW DELHI: The luxury car and bike prices are set to go up by 5% from Friday morning as the Finance Minister Arun Jaitley has decided to increase custom duty on vehicles imported in knocked down form.

This would mean the big Harleys and Triumphs imported in a knocked down form will see a price hike of Rs 15000 to Rs 50,000, whereas Mercedes Benz,

BMW

, Audis’ prices are likely to see a spike of at least Rs 1.25 lakh to Rs 5 lakh. The price of fully imported luxury buses too are likely to go up by Rs 5 lakh to Rs 10 lakh.

In order to further encourage deeper manufacturing in India and boost Make in India, the Finance Minister Arun Jaitley has increased basic custom duty on motor vehicle parts, accessories, cars, bikes and SUVs imported in knocked down form or buses imported as fully built units by 5-7.5%

The basic custom duty for completely knocked down imports of motor vehicle, motor cars and motorcycles has gone up from 10% to 15%.

The custom duty on specified parts or accessories of motor vehicles, motor cars and motorcycles has been raised from 7.5/10% to 15% which includes engines, engine components, gearboxes, transmission shafts, etc, which will aid $43.5 billion domestic auto component industry in India.

And completely built unit (CBU) imports of vehicles other than car, bike or utility vehicle – i.e. motor vehicles carrying more than 10 people and motor vehicles used for transport of goods will attract basic customs duty of 25% as against 20% earlier.

“There is substantial potential for domestic value addition in certain sectors, like food processing, electronics, auto components, footwear and furniture. To further incentivise the domestic value addition and Make in India in some such sectors, I propose to increase customs duty on certain items,” said Jaitley in his speech.

The Indian luxury vehicle segment has yet again faced the brunt of higher tax at the hands of Finance Minister, albeit quietly this time around, without explicit mention of the same as seen in the past.

Almost 95% of about 40,000 units’ Indian luxury vehicle market is assembled in a completely knocked down form and about 5000 to 6000 units are Harley or Triumph big bikes are assembled in the country, which will attract an additional 5% basic custom duty.

Kavan Mukhtyar, partner and automotive leader at PWC the move by the finance minister is a big positive for the Indian automotive component industry and the decision may lead to deeper localization of critical precision parts like engines, and gear boxes of high end product, this will further build capabilities of Indian automotive component makers which are already gaining recognition as the best cost source globally.

Amongst the fully built vehicles, which are imported, the price of luxury buses from Volvo and Scania are likely to go up by Rs 5 lakh to Rs 10 lakh.

Nirmal Minda, president, Automotive Component Manufacturers Association (ACMA), said, the component sector is delighted that the duty on select items such as engine and transmission parts, brakes and parts thereof, suspension and parts thereof, gear boxes and parts thereof, airbags etc. have been enhanced from 7.5/10% to 15%.

“These items account for more than 50% of $ 43.5 billion domestic component industry’s turnover and over 30% of its $ 11 billion exports. The industry is extremely competitive in these areas and this measure will not only encourage investments but also encourage technology development in these areas,” added Minda.

Additionally the finance minister has increased duty on radial tires used in buses and lorries by 5% which will again support ‘make in India’ initiative and encourage local manufacturing of tires, which will aid radialisation of commercial vehicles.

Raghupati Singhania, Vice President JK Organisation and CMD JK Tyre & Industries, said “Increase in import duties on Truck Radial tyres is a welcome move, which will help domestic Industry. A major chunk of the imports were at concessional rates thereby were eroding a significant part of the market of the domestic tyre industry. The domestic tyre manufacturers have undertaken large scale capacity additions with investments in the last few years, and this is definitely a good news. It was a matter of concern that cheap imports especially in truck/bus radial segment were being dumped at very low rates, thereby, threatening the large investments made in the recent past.”

Further, reduction in corporate tax to 25% for SMEs with turnover less that Rs 50 crore is yet another welcome step as over 80% of the companies engaged in the auto component manufacturing are SMEs.

This measure, as also enhanced budgetary allocation of Rs 3,794 crore for credit support, capital and interest subsidy will have a benign impact on the smaller enterprises.

Sugato Sen, deputy director general, Society of Indian Automobile Manufacturers (SIAM) said, most mass manufacturers have localised engine production. the change in customs duty structure will, however, affect vehicle as well as component makers who still import engine or engine parts.

“The move is meant to increase localisation content per vehicle,” added Sen.

Mercedes-Benz India sales rises 1.4% to 15,538 units in 2018

German auto major Mercedes-Benz Wednesday reported 1.4 per cent increase in its sales in India with a record 15,538 units in 2018, retaining its leadership position in the luxury segment for the fourth year in a row. The company had sold 15,330 units in 2017, Mercedes-Benz India said in a statement.

Sales in 2018 were driven by an all-round performance across segments from the new-generation cars, sedans, SUVs and the AMG portfolio, it added.

Mercedes-Benz India Managing Director and CEO Martin Schwenk said, “We are satisfied with our sales performance in 2018 despite facing strong macro-economic headwinds in H2, resulting in low consumer sentiment that posed significant sales challenges.”

However, “we made a strong comeback in the Q4 period and were able to achieve a year-on-year growth,” he added.

The company’s rival BMW India had posted 13 per cent increase in car sales to 11,105 units in 2018, compared with 9,800 units in the previous year, while Tata Motors-owned Jaguar Land Rover reported 16.23 per cent increase in its 2018 sales at 4,596 units as against 3,954 units in 2017.

Volvo Auto India posted 30 per cent increase in its sales at 2,638 units in 2018 as against 2,029 units in the previous year. Another major player in the segment, Audi, is yet to declare its 2018 sales.

On the outlook for the new year, Schwenk said, “2019 is going to be an important year for Mercedes-Benz India, as we reach the milestone of ’25 years of Mercedes-Benz in India’. The year will be marked with some of the most significant product introductions which will redefine luxury motoring and chart new avenues for future mobility.”

The company will introduce in over ten new products, including an array of products from the performance brand AMG, this year.

Frequent changes in tax rates hit planning: Auto industry

(This story originally appeared in on Aug 08, 2017)

NEW DELHI: The joy of SUV and luxury car buyers over lower prices in the GST regime may be short-lived. With the government making clear its intention of hiking the cess on them, they may have to shell out more, substantially so in the case of premium sedans and bigger off-roaders.

The impact of a 10 per cent hike in cess , from 15 per cent now to the proposed 25 per cent, will be substantial when it comes to retail prices.

For example, the Honda City’s price may go up by Rs 60,000-80,000 if the company decides to pass on the entire burden to consumers.

The impact will be more telling on luxury cars. Audi’s Q7 SUV will get dearer by Rs 7 lakh while the Mercedes E-Class will cost nearly Rs 4 lakh more.

The industry is not happy with the government’s stand, saying that abrupt and frequent changes to tax rates negatively affect investment planning as well as market outlook. The irritation is even more as they had just passed on the benefits from a lower duty regime in the GST regime —that was rolled out from July 1— through a cut in prices.

If the fresh proposal goes through, the prices may even be more than what they were in the pre-GST era. "We are disappointed and I am also irritated," said Rahil Ansari, head of Audi in India, who foresees a 20-30 per cent fall in luxury car sales over the decision.

"This move unfortunately is against the spirit of liberal market dynamics and we can only request the government to reconsider this proposal."

Shekar Viswanathan, vice chairman and director at Toyota Kirloskar, said the government is sending out a message "that it does not favour people with bigger cars." The proposal, if implemented, will impact investments and jobs in the sector. "Why invest here if the government only wants small cars," Viswanathan said, adding that any final view will be taken only after a careful consideration of the government’s move.

"The government is not clear on what it wants. Some of us who have invested heavily for making bigger people mover cars will be hurt."

Roland Folger, MD of Mercedes Benz in India, said the company’s plans to expand production —in line with the ‘Make in India’ initiative – will be hit.

"We are highly disappointed with the decision. We believe this will be a strong deterrent to the growth of luxury cars… (and) will also affect our future plans of expansion."

Some CEOs said frequent changes to duty also impact investment plans for the country. "It is very difficult to explain the frequent flip-flops in policy to our headquarters. It is highly frustrating and clearly does not lead to a favourable view about India’s potential," a CEO with a leading company said, requesting anonymity.

Mercedes’ Folger said that lack of clarity hurts the planning process of companies badly. "The constant shift in policy makes our long-term planning for the market highly risky, and we think this would only have an adverse impact on the country’s financial ratings."

Slowdown affecting super luxury segment but growth plans intact: Lamborghini India

NEW DELHI: The ongoing slowdown in the auto industry has also impacted the super luxury segment but Lamborghini expects sales to grow around 50 per cent this year, according to a top company official. With its new offering, the super sports car Huracan Evo, starting deliveries from September to add to the Urus SUV, which has been sold out for 2019, Lamborghini India is confident of clocking high double-digit sales growth, although it had earlier pegged the outlook for the year at around 60 per cent.

“There is a downturn in the overall auto industry. There are some challenges even in the super luxury industry. Thankfully we are able to bring products at the right time and we are able to create excitement in the marketplace despite the challenges,” Lamborghini India Head Sharad Agarwal told .

Following the launch of Urus SUV, last year the company emerged as the leader in the overall super luxury cars segment (cars priced above Rs 2.5 crore) where it competes with the likes of Rolls Royce, Bentley, Ferrari, Aston Martin and top end products from German manufacturers Mercedes,

BMW

and Audi.

When asked about the outlook for the year under the current circumstances, he said, “What we are looking is that for 2019 we are right now on track with our plans and we will be growing by 40-50 per cent over last year.”

The company, which sold 45 units in India last year, had earlier in the year pegged growth for 2019 at around 60 per cent.

“We are still optimistic and we have a strong year until now. Urus has been the growth driver but Huracan Evo, which was launched in February, we will start delivering the cars from September onwards in the market. That will also help us help in achieving the growth,” Agarwal said.

He further said the company will be reinforcing its product portfolio.

“We will announce one more launch during this year sometime around the end of this quarter or early next quarter. We will continue to bring more products to India,” he said.

Urus has been sold out for 2019 and the company has started taking orders for 2020.

“It has been one and half years since we have launched the car in India. We still see a very strong demand for Urus in the market and 70 per cent of the customers who are buying Urus are first time buyers of Lamborghini brand. Urus will continue to be almost 50 per cent of our volumes from now onwards. This year also Urus will be 50 per cent of our total volume,” he said.

In the super sports segment, he said, “We anticipate Hurcan Evo is going to lead in our super sports car segment in coming years, contributing a significant part of the volume.”

On the overall super luxury segment, he said, “What I see currently is that other players are also quite challenged. It reflects the same sentiments that you see in the overall auto industry.”

However, he said the segment may not shrink, “as we are driving the growth and because of Lamborghini’s growth the segment could be at what it was last year”. The super luxury segment sees sales of around 280-300 units per annum.