ain't no time to disco bt 28 april 2013

7/27/2019 Ain't No Time to Disco BT 28 April 2013

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By SUNNY SENhe chant emanating from the park-facinghouse in Naida's Sector l SA G,ill be misleadin g. "Disco ... Disco... Disco .. .Disco .. ," it goes.

Once inside, you rea lise it is not JohnTravolta re-igniting S(lturday Night Feller.The house and the voice be long to77-year-old R.C. Bhargava. Disco is h.is

golden retriever. who has groV!ll1 a bit long in th etooth and is not the most obedientof pets .

Even otherwise . Bhargava is hi:mUy likely to tt)'th e Strut or th e Hust le th ese days. As th e

ofMarutiSuzuki.which has 39 percentshare of the car and utility vchicles market. he isfacing the worst year in a decade.

The rest of the industry is just as badly olT. if notworse. Eleven or the 20 companies making cars in Indiashow falling sales in the 11 months to Febr uary . InFebruary alone, a month in which sales slow as peoplewait to see what the Budget does to their in come andprices, car sales fell 26 per cent.

Not that th e Budget helped. On the contral'Y.Finance Mi ni ster P. Chidambaram raised theimport duty on luxury cars from 75 to 100 percellt: and Oil high-end motorcycles from 60 to75 per cent. The one that really hUlts is hisdecisian to raise the excise duty on sports utilityvehicles from 27 to 30 per cent.

"The fimUlce minister is looking to get moreout ofSUVs because they are the only grow ing segment." says 13hargava. Ifyou add SUVs, growing at54 per cent. to February's calculations. the drop inpassengervehicle sales is only 16 per ce nt.

The excise duty increase comes wrapped i.n confusion.The way SUVs have been defined - on the basis of length .engine size . and gro und clearance - creates abslmlities.Maruti SX4.Honda Civic and Toyota Co rolla - wh.ich looklike sed,ms and drive like sedmlS - qualify as SUVs.

"The definition should be more clear ," saysSa ndeep Singh. second-in-colllmand at ToyotaKirloskar Motor. which make.o; the best-seller Innova."You cannot categorise an SUV based on groundcleara nce and engine size." The !nnova, which is acrossover betvveen a car and a utility vehicle. faces

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higher excise duty. fn a developedmarke t such as the United States, i twould be called a "people ccuTier",vehi cles which attract [


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COVER STORY Car Sales

42 per cent. even if you include utility vehicles. Onl y Mahindra &Mahin"ra (M&M) an d Toyota reported higher sa les. Clea rly, despitethe industry's attempts to induce thebuyers. they are refu sing to tango.DISCORDANTNOTESThe subdued eco nomy - gross domestic product may bave grown fiveper cent in 2012/13, the lowestin 10years - bas curtailed disposable incomes and taken optimism out ofconswllers. What tbe two things cando can be seen in the numbers for

2006/07, when passenger car sales- not counting utility vehicles -crossed a million for the first time.Thatyear, the GDP grew 9.6 percent.

Interest rates, which remain highas lhe Reserve Bemk of India tTies tofight inflation, ha ve pushed up Etvnson car loans. In a market where 80per cent of all cars a re bought withthe help of loans. that can never begood ne ws. Tn rece nt mon th s. thecentral bank has relented a Uttle mldbanks have reduced rates by 50 basispoints, but that. according to analysts, is a mere drop in the ocean."The high interest rate is one of the

main factors that has pulled downG U' sales, along with the GDP growthgoing down," says Williied Aulbur,fonner head of Mercedes Bem Indiawho now heads Roland BergerStrategy Consultants in the country .Rinchen Ghosh, who owns adesign studio in Delhi , drives hermother's Zen . She plans to buy twocars ~ a sedan for the family and aha tchback for herself- but has beenst u ck in the planning stage formonths. La st October. she almostbought Vo lkswagen 's Polo, beforedeciding to continue with the oldZen. "[ don 't know the fu ture fuel

) SUVs GREW. BUT CAR SALES FELL FORTHE FIRST liME IN ADECADE

OVERALL MARKET2010/11 1.972.845 315.123 213.5742011/12 2.016.115 367.012 234.9452012/13* 1.870.687 545.230 234.393

'Annualised Source: SIAM

60 BUSINESS TOOA Y A/lril28 20 13

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ain't no time to disco bt 28 april 2013

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