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Tuesday, 2 March 2010
The Union Budget 2010 has brought in a slew of price rises in the Indian car industry, which is deemed beneficial by the industry experts. Even the government claims that the post-budget price hike is going to bring long term benefits for the industry. All things considered, the budget has done nothing to bring a smile on current or future car owners.
Post-budget, fuel prices shot up and the other thing that has shot up along with it is the pressure on the Union Government to reduce the fuel prices. But Finance Minister, Pranab Mukherjee, is not someone who gives in to the pressure of Opposition or his own allies, for that matter.
Prime Minister Manmohan Singh has said that the general price hike has been brought about keeping in view the long-term benefits of the country. He also said that populist policies, if persisted with for a long time, will lead to erosion of the investment climate, our capacity to create new jobs, and of our ability to invest in flagship programmes for the poor people. Manmohan Singh also said that the hike in fuel prices would not add-up to the already-high inflation.
So much for the effects of increased prices on the country’s economy. Now let’s take a look at the effects of increased prices on present and future car owners.
There has been a hike in excise tax on prices of large cars, sports cars and MUV’s. However, the Indian government has taken into consideration the people who want to own smaller cars and spared them by sticking to the old excise duty. But, that has been balanced by hiking the fuel prices.
The fuel price hike may be conducive to the growth of Indian economy but it will definitely bring down the morale of vehicle owners. The general instinct of consumers may be to shift towards fuel efficient diesel vehicles, since diesel prices are relatively lower than petrol and even mileage-wise, diesel wins over petrol. But, the diesel prices have gone up too.
Excise duty on electric cars has been waived off by 4 per cent and they also get exemption from custom duty & other special duties on the components used. Now, that does bring a sigh of relief, considering that the hybrid car segment is going to touch a new high in India.
Labels: Budget-2010, Car-Sales-In-India, Cost-of-Car-Ownership, Diesel-Prices, Electric-Cars, Fuel-Prices, Indian-car-industry, Small-Cars, Union-Budget-2010
Monday, 1 March 2010
The Union Budget 2010 has done it to us again. Finance Minister Pranab Mukherjee, on Friday, announced a two per cent increase in excise tax on prices of large cars, sports cars and MUV’s (Multi-Utility Vehicles in the general budget. That’s the uglier side of the budget. The better side is that the small car segment would continue to get the 4 per cent excise duty relief that was introduced by the government as an industry stimulus package during 2008, when auto sales had hit an all time low. That’s not all. There are other components of the 2010 Union Budget which would negatively affect the vehicle buying decisions of the consumers. There has been increase in fuel prices with petrol becoming costlier by Rs 2.67 and diesel by Rs 1.50 (Delhi). It does not end there. The Union Budget 2010 has announced a hike on the excise duty of steel as well which would result in vehicles manufacturing becoming an expensive affair and the costs being passed on directly to the buyers. Some of the auto manufacturers in the country have already announced a hike in the prices. Maruti Suzuki India, India’s largest car maker, has said that the Maruti Suzuki cars will become costlier by 2 percent, while Hyundai Motor India has hinted at a price rise of Rs 6,500 – Rs 25,000 on an average on all its cars sold in India. But considering all this, we can feel good, at least, about the corrections in the excise duty on Electric Vehicles. The electric vehicles will now get exemption from custom duty and other special duties on the components used. This is going to move the auto industry’s focus on innovation, R&D and product development which would bring in competitiveness on a long-run. In 2008, the UPA government had reduced the excise duty on small cars (from 12 per cent to 8 per cent) and big cars from 24 per cent to 20 per cent. This move helped the auto industry recover from the global economic slowdown in 2008. With the car prices and fuel prices going up, let’s see how the consumers respond. Labels: Car-Price-Hike, Electric-Vehicles, Fuel-Prices, Union-Budget-2010
Thursday, 27 November 2008
Indian car industry is really facing a tough time. In the early fiscal, the industry faced the challenge posed by inflation, then the high fuel prices and high interest rate. After all this, when the auto industry was just managing to combat the impacts, a severe liquidity crunch made a hard hit. While the challenges are still on, again a breeze of gloom has entered the car industry accelerating the hurdles with the recent imposition of restrictions on import of certain key auto components in India. Till date bumper parts and transmission shafts were considered to fall under free import category. But according to the recent notification of DGFT (Director General of Foreign Trade), these basic automobile components have been pushed under restricted category. Not only these, even components like iron products or non alloy steel coated components have been placed under the restricted import category. All these components are used to create car chassis without which the car cannot be designed. Being an essential part of the car, the taxes, and charges on these components will further increase the cost of production. So, there are possibilities that cars prices may hike. If you are planning to purchase a car, then get one now before the prices goes up. Labels: Auto-Components, Fuel-Prices, Indian-car-industry
Monday, 25 August 2008
The demand for four-wheelers in India is growing and the two-wheeler manufacturers are also venturing into the car market. Hero Electric, a subsidiary of the Hero group is planning to foray the car segment with an electric car by 2013. The details of the car like the specifications and the price is not yet disclosed. These cars will not run on capacitors or on conventional battery. The car will carry an instant charger and would also give higher mileage at a lower cost. The increase in fuel price has given a great pinch to the buyers as well as the car manufacturers and as a practical solution to it, car manufacturers are working on eco-friendly cars. Recently, Tata Motors has also announced the electric-drive version of Tata Nano by 2009. Mahindra & Mahindra is also planning to roll out electric car to India very soon. As we all know that India does not support electric vehicles much. Looks like by introducing e-cars, car manufacturers are trying to build a green image, but still the actual revenues come from mainstream fuel guzzlers. Labels: E-Cars, Fuel-Prices, Hero-Group
Wednesday, 6 August 2008
Driven by the rising fuel prices, car owners have shifted to carpooling. The rising fuel prices have affected all sectors of the society. Most of the car owners are now accepting the option of carpooling. It is simply defined as a method of sharing a car to a same destination in order to reduce fuel costs and pollution. Many commuters who are travelling to a same destination every morning and afternoon are pooling their cars so that they can save on fuel prices. All the commuters share the fuel prices of the shared car and give it to the car owner on a daily or monthly basis. This not only helps to cut down the fuel use and save fuel prices but is also a good way to reduce environmental pollution. Even if you are someone who drive a car to office or work daily, then you should opt for the same fuel saving option. If anyone at your work place resides near your house then carpool will help you gain money. If not for the environment then at least give a thought over it for your pressurized pocket. Labels: Car-Fuel, Driving, Fuel-Prices
Tuesday, 5 August 2008
Many people have a misconception that premium gasoline is better than regular gasoline. But that’s only a costly misconception. The effectiveness of gasoline is judged on the octane ratings, defined as a measure of its knocking resistance. This rating checks the condition when fuel is burnt uncontrollably in the combustion chamber of the car engine. Knocking leads to engine damage. Regular gasoline has an octane rating of about 87 whereas premium gasoline has a rating of 93. The higher the octane rating, the more resistance fuel provides. Using premium oil does not do any good in terms of performance or effectiveness. It’s only the price that misguides the car owners. Most of the Indian car engines operate well on regular gas and even engines recommended to use premium engines can run fine on regular gas. So, where does the need of premium gas come? No one would like to increase expenditure of fuel during this era of fuel prices hike and inflation. There are some engines that require high compression ratio and can work only with premium gas. Labels: Fuel economy, Fuel-efficient-Car, Fuel-Prices
Monday, 4 August 2008
We all are aware of the increasing fuel prices, so why not take an initiative to support the government than to curse. Every day in newspapers and magazines we are blaming the government for putting the country on the edge of inflation. Has anyone of us ever thought that why the government is increasing the fuel prices? There must be some reason behind it. No government is keen in shaking its own economy. Oil consumption in India these days crossed the total amount of oil production and oil imports. The US has also increased its barrel then how can our government stick to the same old price. It is true that there is only one thing in life that stays constant and that’s ‘Change’.
One day or the other this change has to come. If not today then definitely tomorrow! We all are equally responsible for the rise. We want comforts and luxuries, which result in more number of cars and eventually requires huge load of oil. There are many cars that are actually termed as ‘oil tanks’ but still we buy those cars because of their design and style as we want to show off. We also require oil for various home and industrial application. Have you ever thought from where will all this oil come?
To meet our requirements, government has to increase the oil imports as well as the local production. So, now it’s high time when we should stop cursing our government and support them.
Car manufacturers are also with head and heart in search of fuel efficient engines. They are actually lost in the market and searching for a way to come out. If can’t design a fuel economy car for them but at least support them by reducing our dependency on cars. This act may be distressing to the car manufacturers but this would fuel them to make more fuel economy engines for Indian cars.
Further, we can outfit fuel efficient engines in our cars. We can also give a halt to useless long drives that waste a lot of fuel. We should stop that as well and walk the distance to the market if it is really close.
There are many other ways that can be helpful in reducing the burden on the government and even the car manufacturers. You just have to sit and think. Why not now? Labels: Car-Manufacturers, Car-Production, Fuel-Prices
Friday, 18 July 2008
The best way to beat the rising costs of conventional fuel is to replace your petrol/diesel car with an electric car. Reading the headlines about the soaring fuel prices, Chetan kumar Maini must have given a self-satisfied smile. Chetan kumar Maini is the one who introduced the first plug-in electric car, Reva Maini, to India.
The tremendous increase in prices has established a superior place for Reva in the industry. The car runs well on road and with a charging battery. It is a small and appealing car, good enough and comfortable for seating two people. The car was first launched in Bangalore and thereafter it rolled out to Delhi roads. The car manufacturers had faced a challenging period when the Government of Delhi asked Maini to introduce his electric car to New Delhi. The rising cost had shaken the State government and they offered all financial and moral support required for the launch of Reva in Delhi. This was a good initiative taken by the State Government to beat the fuel prices and reduce emissions. Now, it’s time for us to take an initiative to conserve the natural resource, reduce pollution and win the battle. Labels: Electric-Cars, Fuel-Prices
Thursday, 3 July 2008
Trust, there is a rough road ahead, a road with hurdles for the industry. The chairman of Tata Motors, Ratan Tata, has a strong belief that next year will be full of challenges for the Indian car industry. Don’t you also think the same? The first challenge faced by the industry is the peak height in fuel prices. Car manufacturers are working with head and heart to resolve the issue with innovative technology and advanced engines. This month they have beaten the fuel prices but the increasing steel prices has blocked the road. Increase in steel prices is definitely going to affect the overall estimated cost of production. None of the car manufacturers will be selling the cars cheaper than the production cost. No idea of how the major car players are planning to overcome this obstacle. It is also expected that the next year will come with an unprecedented increase in material costs in steel, tyres, rubber, plastic and the like. Far apart, how can we forget the increasing rate of interest? Couple of increases and hikes is definitely going to accompany the forthcoming year. So, be aware and prepare. Labels: Car-Industry, Fuel-Prices
Where has all the fuel gone? Nobody knows the answer to this question but the fact remains that major cities like Delhi and Bangalore are running short of fuel. The condition in Bangalore and rest of Karnataka is expected to worsen. The scenario in Bangalore is expected to deteriorate in next few days. From the past two-three days, the most running fuel stations in the city are being shut down much before the closing time because of fuel shortage. Many customers are even forced to buy premium fuel, some are compelled to buy branded and costly fuel like Speed and some are left without fuel. Those who are left without fuel are travelling in public transport because they could not fill their car fuel tanks before fuel ran out of stock. The petro-dealers are saying that there is almost 30 percent of fuel shortage but Oil Companies refute the fuel shortage. Whom should we believe? Is fuel being reserved for special categories? Are petro-dealers unwilling to give normal petrol? Or it is being traded for high income? After all the fuel prices are at the peak. Think deeply and you’ll definitely get the answer to, “Where’s the Fuel?” Labels: Fuel-Prices, Fuel-Shortage
Wednesday, 2 July 2008
Wow! Car industry is constantly racing to win the battle. It wins!! After the increase in fuel prices and cost of production, most of the car manufacturers were distressed with the belief that the car sale will go down. But they are smiling today because a complete union of leading car manufacturers is finally successful in beating the fuel price hikes and increasing their car sales. Eventually, car industry is recovering with Hyundai and Maruti reporting jumps in their car sales during June. Is it really true? Even after such a drastic increase in fuel prices, are people still buying the gasoline cars? Just don’t know. No guesses. But one thing is sure that the sale will definitely fall down when a good number of cost-effective hybrid cars or electric cars would come into picture. It’s a long way to go, till then reap the benefits and enjoy the gain. Labels: Car-Industry, Fuel-Prices
Thursday, 26 June 2008
How much do you think is the input costs of manufacturing a passenger car? Yes, the input costs of manufacturing a car has increased tremendously followed by the increase in steel and fuel prices. This rising costs is hurting the core of all car manufacturers. Steel is believed to account 60% of a car’s weight and apart from that plastic, aluminum are also used in the manufacturing process. Followed to the increasing steel prices, plastic, aluminum and rubber are also facing inflationary pressures. All together increases the total input costs of car production and eventually becomes a leading cause of worry, dismay and distress for the manufacturers. You’ll be glad to know that even under heavy pressures these manufacturers are trying to absorb the maximum increase and pass on affordable cost price to car consumers. Labels: Fuel-Prices, Input-Cost
Friday, 13 June 2008
The recent unprecedented hike in fuel prices has increased the demand for CNG kits. Manufacturers and retailers of CNG in Delhi have reported a 100% increase in the number of cars owners switching over to CNG kit. The extraordinary spurt in the increasing demand of CNG is understandable but it has created a great chaos for the companies that fit these kits. They are attending countless phone calls and enquiries related to the fuel prices and conversion procedure. Cost price of CNG has recently dropped down from Rs 19.20 per kg to Rs 18.90 which eventually brings down the car running cost. Around 30,000 new cars are hitting the Indian roads every month and this increase in the number of cars will definitely reduce the availability of CNG. The government has to take in some action to improve the infrastructure and sort out the mess at the CNG stations. Labels: CNG-cars, Fuel-Prices
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