The Disruptors Ruling The Road
India’s automobile industry will not only see a slew of globally accepted standards being enforced, but also witness a whole host of new launches
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The Indian auto industry became the 4th largest in the world with sales increasing 9.5 per cent year-on-year to 4.02 million units (excluding two wheelers) in 2017. It was the 7th largest manufacturer of commercial vehicles in 2017.
The two-wheelers segment dominates the market in terms of volume owing to a growing middle class and a young population. Moreover, the growing interest of the companies in exploring the rural markets further aided the growth of the sector. Automobile exports grew 20.78 per cent during April-November 2018. It is expected to grow at a CAGR of 3.05 per cent during 2016-2026. In addition, several initiatives by the government and the major automobile players in the Indian market are expected to make India a leader in the two-wheeler and four-wheeler market in the world by 2020.
Market size: During April-November 2018, automobile production increased 12.53 per cent year-on-year to reach 21.95 million vehicle units. Overall domestic automobiles sales increased at 7.01 per cent CAGR between FY13-18 with 24.97 million vehicles getting sold in FY18. During April-November 2018, highest year-on-year growth in domestic sales among all the categories was recorded in commercial vehicles at 31.49 per cent followed by 25.16 per cent year-on-year growth in the sales of three-wheelers. Premium motorbike sales in India crossed one million units in FY18. Sales of electric two-wheelers are estimated to have crossed 55,000 vehicles in 2017-18. The industry has attracted Foreign Direct Investment (FDI) worth $19.29 billion during the period April 2000 to June 2018, according to data released by Department of Industrial Policy and Promotion (DIPP).
Some of the recent/planned investments and developments in the automobile sector in India are as follows:
Ashok Leyland has planned a capital expenditure of Rs 1,000 crore ($155.20 million) to launch 20-25 new models across various commercial vehicle categories in 2018-19. Hyundai is planning to invest US$ 1 billion in India by 2020. SAIC Motor has also announced to invest $310 million in India.
Mercedes Benz has increased the manufacturing capacity of its Chakan Plant to 20,000 units per year, highest for any luxury car manufacturing in India. As of October 2018, Honda Motors Company is planning to set up its third factory in India for launching hybrid and electric vehicles with the cost of Rs 9,200 crore ($1.31 billion), its largest investment in India so far.
Safety: In a move towards making cars safer, the Union Road Transport Ministry has approved a timeline for implementing a new set of rules. All cars manufactured after 1st July 2019 will have to be equipped with airbags, seat-belt reminders, alert systems for speed beyond 80 kph, reverse parking sensors and manual override over the central locking system for emergencies.
Crash testing: As per Central Motor Vehicle Regulations (CMVR), set out by Automotive Research Association of India (ARAI), all new cars are expected to undergo crash tests from October 2017. This implies that cars launched post 1 October 2017 need approved certification for crash. Existing car models, however, will have to comply by safety standards by 1 October.
Star rating: To improve vehicle safety, the government is working on a plan to start of awarding star certification to vehicle models based on their safety. The road transport and highways ministry has proposed to set up a specialised agency to be called New Vehicle Assessment Programme to test the safety of vehicle models being sold in India.
HSRPs: All motor vehicles will come fitted with tamper-proof high-security registration plates (HSRPs) from 1 April to protect against counterfeiting.
New Car Launches
Tata Harrier: With the futuristic looking Harrier, Tata Motors aims to get back into the SUV space after a gap of several years. The Landrover-based premium SUV will be launched in January. The Harrier is powered by a 2.0 litre diesel engine sourced from Fiat and is loaded with premium interiors.
Nissan Kicks: Known for its powerful SUVs, Nissan is bringing the Kicks to India in February. The Indian version of the Kicks is larger than the international version and will be competing against Hyundai Creta, Renault Captur and Ford Ecosport.
Tata Motors 45X Concept: With the Nexon and the Harrier Tata Motors is moving onto the premium segment. In 2019, Tata Motors will be bringing the premium hatchback 45X concept to reality. The 45X will rival the likes of Hyundai i20 and Maruti Baleno.
Mahindra XUV300: The compact SUV is based on Ssangyong Tivoli and will compete with the segment best seller the Maruti Brezza and Tata Nexon. XUV300 is expected to be premium product with a 1.5 litre diesel engine with segment best power figures of 123hp.
KIA Motors SP-Concept: Hyundai’s sister concern KIA Motors will be marking its entry into the Indian auto market with the SP-Concept SUV. The KIA SUV is expected to launch in the Mid of 2019. Competing against the segment leader Hyundai Creta, Jeep Compass and the Tata Harrier.
Morris Garage Motors SUV: British Car Brand MG Motors, now backed by SAIC, will be making a foray into the Indian Car Market with an SUV. The C-segment SUV will be based on existing SAIC vehicle platform and powered by the Fiat 2.0 liter diesel engine seen in Jeep Compass.
Hyundai QXI: Hyundai Carlino QXI will be Hyundai’s answer to Maruti Brezza, Tata Nexon and Mahindra XUV300. Smaller than Creta, the QXI will be one of the biggest launches for Hyundai India after the Tallboy Santro. Expected to grace the showrooms in India in mid 2019, the Hyundai QXI is undergoing testing.
Jeep Renegade: Jeep is preparing an affordable small SUV called renegade. The Jeep Renegade is expected to launch in India sometime in mid 2019. Though it’s a small Jeep compared to the larger siblings, but the aggressive and tough DNA is intact in this car. The car is based on Fiat 500L platform, and in terms of design, the car looks rugged and bold in its compact shell. It features large round headlamps, vertically slated teeth-like aggressive front grille, while the front bumper too looks pretty bold. The car appears very much compact and a bit boxy as well, and it reminds us of old generation Jeep SUVs.