The government’s decision on Monday to reduce excise duties on cars, SUVs and MPVs across the board was so unprecedented that it has created a peculiar problem for the industry.
While the reduction in taxes was much needed and the industry had been lobbying hard for it over the last 6 months, the inventories piled up at with the dealers that were charged at the higher rate of duty is a headache for the manufacturers. And as the sales have been underwhelming over the last 7-8 months, unsold stocks are high both with the dealers as well as the companies’ own supply chain.
On an average, any car maker carries with itself an inventory of 2 weeks and in an ideal situation–10 days. But estimates suggest that currently the inventory level is at least 6 weeks and in some cases stretches to over 10 weeks. In effect, there are some companies where stocks dating back to 2013 are still unsold with the dealer.
On any given day, these cars are a problem and could be very difficult to liquidate. And in cases like this one, when taxes go down, it assumes significant financial implications. While the company and the dealer has paid a higher duty for the car as excise duty is charged at the factory gate, when it actually gets to the intended customer for delivery, the prices would change and customer would be obliged to pay the lower value. It is a situation that results in a windfall when excise duties go up but it turns into a loss to be absorbed when they go down.
Considering that around 150,000 cars are stuck as inventory across the country and the average ex-factory sticker price of a car is Rs 6 lakh (mind you it would include the marquee super cars as well), the entire industry is sitting at a potential loss of Rs 360 crore. This amount would either have to be absorbed by manufacturers entirely on their own, or in conjunction with their dealers. Or, some manufacturers could be inclined to pass on only part of the excise duty reduction to the consumers to account for the loss in inventory.
The peculiar problem is the reason most of the companies have gone into a huddle and were not able to decide by how much prices ought to be reduced. As a car buyer, if you were waiting for the budget you may now laugh your way to the bank at the expense of your manufacturer.
For a market that is one of the largest and fastest growing in the world, the performance of European car makers in India has been appalling. Read more
1100 kilometres of asphalt – some welcoming, others not so forgiving – across three states, four cars, two scheduled night halts reduced to one and nearly 30 hours of relentless driving. In short, a perfect test for a car that is emerging as the winner of 2013.
The best way to really get under the skin of a car, unearth its hidden vices and put to test its obvious virtues is a road trip. One that is exhaustive on the human body as also the machine and which offers a variety of terrain – from carpeted tarmac to craters on the moon.
Along with six other motor heads, we decided to submit the Honda Amaze through the gas chamber. Why the Amaze? Because it is a Honda, a company that never tires itself of proclaiming its credentials as a quality car manufacturer. Also, because Amaze has its first diesel engine, something that is not quite its forte.
Driving on the usual western ghat sections between Delhi and Goa, or the boring stretches up north around Delhi or even the narrow roads in the South was a passé. Everybody has done that numerous times over. We decided to head to the East and experience some sections where we thought we will find roads untouched by modernity.
After a night’s stay at Vizag, the second largest city in Andhra Pradesh and one that has India’s oldest ship yard, we headed out northwards early morning towards Puri, the best known beach destination on the Eastern Coast. A journey of nearly 500 kilometres running parallel to the coast, it ordinarily takes 7 hours to get there. There were an awful lot of surprises though.
For one, getting out of Vizag was a painful exercise that cost us a good hour and a half. On leaving the city, the highway opens up and you get some of the cleanest stretches of road you can get in India. Which exposed almost entirely, the one big problem that the Amaze has… noise.
With endless stretches of glitch free road ahead of us, we throttled the vehicle mercilessly. At various points of time, all four cars were going bumper to bumper at speeds touching 140kmph, the maximum that Honda allows the Amaze to run. One wonders why a car that has a 1.5 litre engine underneath its hood and 100 horses pushing it ahead should have a top speed that is so low. The answer lies ahead.
Every time, the accelerator was floored, the engine noise seeped into the cabin. No amount of careful or careless wheeling around changed that opinion.
Judgment One: This car is indeed noisy.
But at the same time, the stability at high speeds and the confidence that it inspires there is unmatched. Which is why we could go bumper to bumper without a care in the world.
We also realised how deserted the NH5 or as the navigation device would constantly say, the Asian Highway 45, really is. For miles on end at least inside Andhra Pradesh there are no good eateries to be found. An indication of how rarely people travel on these roads.
And there are speed breakers too the kinds one would find only in this part of the country. Willy nilly in the middle of nowhere and in traffic so sparse, you would encounter a jam. A jam that would clear out just as inconspicuously. After encountering such mysteries that may cost you between 15 to an hour of your life’s precious time, a couple of times we finally realised the cause. Whenever political parties need to honour or felicitate somebody in small villages or hamlets in Andhra Pradesh, they encroach the highway, set up chairs, pull up banners and carry on with their festivities. After a good show, the gathering disperses matter of factly in double quick time. As if the traffic chaos around, does not matter at all.
The surroundings change somewhat the moment you enter Odisha. There is more traffic on the road and there are quite a few eateries for the starving. The best part of that is all of them serve and cook very good fish and mutton. The chicken is untrustworthy though as one of the members in our gang realised.
The road stays more or less as faultless. Even though we had heard there were a few stretches in Odisha where work on the Golden Quadrilateral was incomplete, we never encountered any such patch. The most exciting section is when you hit Chilka Lake before turning right for Puri. As the world’s largest fresh water lake, it is a sight not to be missed. Too bad we reached while the sun was setting which restricted the time we could spend there.
Heading out of Chilka, we committed hara kiri. Instead of following NH5 and taking a longer detour via Pipli, we followed the navigation map that gave us the shortest route. Only, that it wasn’t quite the shortest in the real world. Turning right from Bagheiput towards Nua Jagannath Sadak we immediately felt like we had reached moon. The road deteriorated with every passing kilometer to the point that maintaining a speed of even 15kmph was a task.
However, it was a test of the vehicle in conditions that can be found only in India. Through the large craters and over the nonexistent roads, only sporadically did we scrape the floor of the vehicle. And even at the end of the 2 hour ordeal, only the drivers were more relieved. The car remained unfazed.
Judgment Two: The suspension of the car has been well and truly tuned for Indian road conditions.
Whatever little time we had to rest our battered bones after 9 hours of driving on day 1, we had to be ready to resume our journey in the morning the next day. Our destination this time was to head to Digha, a fast emerging coastal weekend destination just across the Bengal border.
The distance was a mere 350 kilometers but it was a dark continent for us as we had no prior information on what road conditions await us. To make matters worse, half of the group wanted to visit the Sun temple, which meant a detour of around 70 kilometers. Coming so close to the world heritage site, there was no way we could have given that a miss.
The road from Puri to Konark and then onwards to Cuttack was the most challenging of the whole trip. We had to leave the national highway after just a few kilometeres and let the two lane state highway assault us. The road was narrow with the oncoming traffic on your face but it was very well paved and allowed us to maintain a pretty high speed. It was surprising because nobody had expected such well made state highways in a state that is one of the poorest in the country.
After a brief stop and a hearty meal at Konark we headed towards Cuttack, the second largest city in Odisha. It took us almost the entire day to get there and while we were lucky to bypass Bhubaneshwar, Cuttack was unforgiving. We got stuck for another two hours meddling with the chaotic stop go traffic of the city. As always, the car did not flinch.
On the outskirts of Cuttack, we had to stop for our first refuelling. We had done nearly 665 kilometers in one full tank of 35 litres. Considering the conditions and when the air conditioning was working full time, we got an astounding mileage of 19kmpl. And that is the reason why the top speed of the car is not 170 or 180 kmph though I would presume it is more than capable of it. Higher speed is directly proportional to lower fuel economy. Where would you drive faster than 140 kmph anyway?
Judgment Three: The Amaze diesel gives you an economy that is as good as you can get. Driven sensibly, 20 plus is a given.
By the time we left Cuttack behind, it was early evening and with over 200 kilometers still to go, we were destined to spend the night driving. The road though was kind on us and thin traffic ensured that we were cruising along. We reached Balasore in a jiffy and with the clock striking 10, we stopped over for dinner and a grand idea emerged – of subjecting the car to the extreme test and driving through the night directly to the City of Joy. That meant another 250 kilometers and 5 hours of driving.
With a full stomach and the lure of Kolkata, we took the plunge. What followed was a race with just one pit stop at Kharagpur. We were hell bent to test both our capabilities as driver and the durability of the vehicle. By the time we reached Kolkata it was 4:30 in the morning. The car had been on the road nonstop for over 19 hours. And it never did give us a problem. Not even a niggle.
Distance: 1153 kilometers
Fuel consumed: 64 litres
Fuel economy: 18.01 kmpl
Top speed: 143 kmph
Engine : 1.5 litre IDtec diesel
Max power: 100 PS@3600 rpm
Max torque: 200 NM@1750 rpm
Verdict : Honda passes the diesel test.
It has, or if I daresay, had all the markings of a winner. Decent to look at, a capable engine, loads of features and an aggressive price tag. And with the backing of a network as wide as Hyundai’s, the success of the Grand i10 was perhaps a given. Read more
It is already renowned for making some of the safest cars around the planet, but Swedish car maker Volvo intends to go a notch higher. By 2020, Volvo, now owned by Chinese auto maker Geely, plans to make their cars so safe that nobody with his seat belt fastened would die or be critically injured in their cars. Here is how the company intends to walk the talk on this audacious claim. Some of these based on radar guided technology that may never make it to India but it still shows the future of things to come.
Volvo calls it city safety technology – featuring automatic braking in low speed situations. City Safetykeeps an eye on traffic in front with the help of a laser sensor that is integrated into the top of the windscreen at the height of the rear-view mirror. The car automatically brakes if the driver fails to react in time when the vehicle in front slows down or stops – or if the car is approaching a stationary vehicle too fast. The collision can be avoided if the relative speed difference between the two vehicles is below 15 km/h. If it is between 15 and 50 km/h, the speed of impact is reduced to minimise the effects of the collision. How effective is this? A study by Swedish insurance company Volvia shows that Volvocars equipped with City Safety are involved in approximately 20% fewer rear-end accidents than carswithout auto brake. By the end of the decade, the speeds at which this feature comes to play maybe upgraded upwards.
Full crash safety features–an airbag for your knees too
Front airbags, curtain airbags, side airbags are passe. Volvo is now planning to introduce knee airbags for the driver. It is installed in the dashboard above the pedals and deployed together with the other airbags in the event of a frontal collision. This is in addition to a safety cage with effective deformation zones and various grades of high-strength steel, safety belt pre-tensioners in the front and outer rear seats and whiplash protection in the front to help prevent neck injuries. Both the driver and front seat passenger seat have dual stage airbags as also side airbags integrated in the front seat backrests. Plus, inflatable curtains cover both sides, from the A-pillar to the C-pillar, and deploy in frontal offset, side or rollover accident situations. A closing velocity sensor collects information and interprets pre-crash data in order to prepare the restraint systems – belts and airbags – for the expected crash violence in low and mid-severe frontal accidents. Virtually, you are travelling in a disguised soft cushion balloon and not a mash of steel.
Enhanced Blind Spot Information System and cross traffic alert
This radar based technology monitors and alerts the driver to rapidly approaching vehicles up to 70 metres behind the car. It also informs the driver about vehicles in the blind spots on both sides of thecar. This helps to avoid potentially dangerous lane-changing manoeuvres. The radar sensors are located in the rear corners of the car, behind the bumper cover and continuously scan the area behind and alongside the vehicle. Warnings are displayed in LED indicators located in each A-pillar. A steadily glowing LED indicates when the radars cover a vehicle in the zone. The second warning level – LED flashing – occurs if the driver uses the turn indicator when the first alert is active. Volvo also uses cross traffic alert to intimate the driver to crossing traffic from the sides when reversing out of a parking space usings radar sensors at the rear end of the car.
An extra eye on traffic
Road sign information supports the driver by displaying road signs in the instrument display. The forward-looking camera can detect speed limit signs as well as “no overtaking” signs. The road sign icon is shown until another sign is detected. This can be combined with the speed alert function, which provides the driver with a visual warning in the speedometer if the speed limit is exceeded.
Pedestrian detection and airbags
Pedestrian detection with full auto brake is a technology that can detect if a pedestrian steps out into the road in front of the car. If the driver does not respond in time, the car can warn and automatically activate the brakes. It consists of a radar unit integrated into the car’s grille, a camera fitted in front of the interior rear-view mirror, and a central control unit. The radar’s task is to detect a pedestrian or vehicle in front of the car and to determine the distance to it. The camera determines what type of object it is. Even pedestrians about to step into the roadway can also be detected early on as it is programmed to trace a pedestrian’s pattern of movement and also to calculate whether he or she is likely to step into the road in front of the car. It can detect pedestrians who are 80 cm tall or taller.
In an emergency situation the driver first receives an audible warning combined with a flashing light in the windscreen’s head-up display. If the driver does not react to the warning and a collision is imminent, full braking power is automatically applied. Pedestrian Detection with full auto brake can avoid a collision with a pedestrian at speeds up to 35 km/h if the driver does not react in time. At higher speeds, the focus is on reducing the car’s speed as much as possible prior to impact. If a collision is still absolutely unavoidable, there is safety for pedestrian too. Enter pedestrian airbag. Sensors in the front bumper register the physical contact between the car and the pedestrian. The rear end of the bonnet is released and at the same time elevated by the deploying airbag. The inflated airbag covers the area under the raised bonnet plus approximately one third of the windscreen area and the lower part of the A-pillar. The raised bonnet and airbag will help reduce the severity of pedestrian injuries.
Last month, Renault Duster completed a year in India. During this time, over 60,000 units of the vehicle, believed to have prised open the compact SUV segment, have hit the roads and revived a company that was languishing at the fringes. However, as is the case with most non Maruti, non Hyundai brands, the honeymoon season for the car is over. Read more
The sheets are off and finally we know the Hyundai BA, is actually the Hyundai GRAND i10, the next generation version of the existing i10. The grand in CAPS is pun intended. Read more
The first half of the year is behind us and barring the Honda Amaze and Ford EcoSport, it has been a washout so far. Traditional, established brands have struggled to attract new buyers just like many “new” cars and for the industry this year is turning out to be nothing short of a nightmare. As we head to the business end of the year where the festive season brings with it hopes of a revival, here are the 5 cars that may just hit the bull’s eye. Read more
After a year long uninterrupted run, Renault Duster–the blockbuster story of last year, gets its first dose of competition. The launch of the Ford EcoSport has been keenly awaited for quite sometime. Read more
When competition hots up, the meek become nervous and buckle under pressure…the not so meek neither so mighty, show resilience and soar higher than ever before. The Maruti Swift Dzire seems to belong to the second category. Read more