Indian Autos Thread -2

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Re: Indian Autos Thread -2

Post by TKiran »

Actually particulate matter is not an issue as soon as the particulate material settles down on earth. Sure aesthetically its unpleasant to see black smoke emanating from silencer. But its similar to the Steam Engined Locomotive driven Trains we used to travel in 70's and 80's, when once you take bath, you will become fresh.

But problem is with mostly Petrol cars which emanate invisible NOx and CO. NOx is heavier than air and doesn't settle down but occupies lower layer of atmosphere. One of the NOx is also called laughing gas. Also when you inhale NOx, HAEMOGLOBIN in your blood which acts as Oxygen carrier to cells and carries CO2 back to lungs, actually has very high affinity towards NOx and the blood turns blue and you faint and head aches and so many issues crop up. Also when it rains, NOx becomes Nitric Acid and the soil becomes acidic and you won't be able to remove acid from the soil. Its called acid rains.

Particulate material which is basically unburnt Hydrocarbons or suit is not as dangerous as NOx, also because the particulate material is heavier than air, also solids, it settles down on surface, and becomes harmless.

You may ask, if the entire Petrol or Diesel is only Hydrocarbons, which are burnt in the presence of oxygen in air, where is the question of Nitrogen getting into the picture producing NOx emissions? (Which is colorless, odurless but very harmful to the environment)

That's a good question.... now for Petrol or Diesel to be burnt, we need Oxygen. But Oxygen is very expensive. The cheapest source of Oxygen is Air. So, you basically take in 78 grams of Nitrogen, for 21 grams or Oxygen into the engine. Nitrogen is very stable and it doesn't react with Oxygen easily because N2 has coordinate covalent bond, very strong. But when the engine gets heated to high operating temperatures about 75-100 degrees centigrade, actual temperature in the combustion chamber of the engine would be 600 degrees centigrade. Some small amount of Nitrogen can react with Oxygen at those temperature, producing NOx emissions.

So the point I am trying to stress is that, your brand new Maruti Swift may be producing more pollution than 100 STC busses which are emitting particulate matter into air.

Frankly a lot of research has been done to remedy this NOx emissions, and only viable solution had been to split NOx into N2 and O2 before its released to atmosphere. That's possible with Catalytic Converters fitted to exhaust pipes. Auto industry is able to reduce the NOx emissions to near zero but still they emit NOx and its still causing more damage than Particulate emissions of Diesel Buses of STC by a factor of 10's.

Between Diesel and Petrol, Petrol engines emit more harmful material to the environment than Diesel.

The recent regulations have been very biased towards Diesel engines, even though their NOx emissions are significantly less than Petrol engines by a factor of 10. The reason for Diesel engines emitting less NOx is because of thermodynamic principles. (When you have high compression ratio, the thermodynamic cycle (Diesel cycle) can operate at about 100 degrees celcius less in the combustion chamber than an Otto Cycle, thus significantly lesser NOx formation).

But the Americans conspired against Volkswagen as Volkswagen was able to produce very good Diesel engine Cars in late 2000's and outsell American big three.

As the Petrol and Diesel were same price per litre, but a Diesel car gives 20 kmpl, while a Petrol car can give for similar power output only 11-12 kmpl, people started buying volkswagen like crazy. The myth created by the big three that Diesel engines are noisy, vibration, more maintenance cost etc were not bought by the American aam janta, as Diesel engines were as smooth as Petrol engines, and maintenance was as much as Petrol cars only.

They conspired and said, particulate material has to be also considered as pollution, and particulate material has to be filtered before release to atmosphere as the particulate material as long as they are still not settled down to earth can cause eye irritation.. etc., but volkswagen could come up with particulate filters and proved to the regulators that they can do zero particulate material emissions.

The Diesel cars of volkswagen were selling like hot cakes in USA. So they came up with another regulatory hurdle, ie, diesel vehicles too should have catalytic converters for NOx emissions. As such, NOx emissions in Diesel cars were almost egligible compared to Petrol engine, but still they created this regulation.

Catalytic converters for Diesel vehicles is very expensive, as you need urea, regular maintenance of urea, etc., so they cheated regulators by making sure that when an engine is sent for checking, the urea etc will be discharged high etc, but in the actual vehicles, the urea discharged was very less. So the actual owners of the car did not feel the pinch to their pockets inthe form of higher maintenance.

This has been caught and volkswagen was fined. But it was very unfair on the part of the big three too to demand for stricter regulation for an already less polluting technology.
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Re: Indian Autos Thread -2

Post by Cyrano »

TKiran,
- Particles need a lot of time to settle, and in Indian conditions they hang around long enough to cause severe respiratory illnesses in millions of people.

- Even in Europe there has been a rethink on Diesel emissions, Diesel subsidies are on their way out. The lower combustion temperature leads to incomplete combustion and higher emissions of not just CO2, NOx, but also ammonia, formaldehyde etc.
- Diesel engines cost more from a lifecycle perspective and create more impact.

Image

Source: https://www.thejournal.ie/diesel-worse- ... 7-Sep2017/
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Re: Indian Autos Thread -2

Post by TKiran »

^^^Cyrano, it seems you believed what the big three peddled about Diesel engines. CO2 is absolutely harmless. In fact, plants need CO2 for healthy growth.

We used to scratch our faces with nails for suit and other particulate material, which are not at all harmful. Atleast Indians have very healthy lungs, and yes, when cleaned nostrils black suit used muddy clear fresh water from well (not borewell, the actual well)

Anyways, this all happened when USA was still world's no.1 country.
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Re: Indian Autos Thread -2

Post by Cyrano »

Boss, I know what CO2 does and doesnt. I dont really buy this whole climate change thing. But NOx and other polluants are a différent matter.

SPM beyond certain levels causes respiratory problems be it due to vehicles or other causes. Its a big problem in India, along with NOx, aldehydes etc it gets pretty noxious. Seriously, are we debating whether vehicle pollution damages human health?!
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Re: Indian Autos Thread -2

Post by Zynda »

Many auto OEMs around the world are shutting down plants temporarily primarily due to severe semi-conductor chip shortages. I have not done a great deal of research to say definitely but I believe somehow the Chinese are slowing down or squeezing supply of raw materials (to prolly SE Asian countries where most of the chips are made) to signal their capability to disrupt...I believe it is the same situation wrt GPUs as well (not sure about mobile & CPUs i.e. if they are affected to the same degree)

OT: I believe GoI just announced either SOPs/tax breaks or direct investment up to 1B USD for any one who is willing to set chip FAB in India. I am sure by 2025, we may have at least a couple of FABs here but for the next 5 years, the Chinese will try to muscle in and disrupt as much as possible.
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Re: Indian Autos Thread -2

Post by Karan M »

GOI's disinterest in the fab semicon chain has been disheartening. They really need to get the right people - actual business folks involved in semicon ops to break the impasse. The usual babugiri file passing, promised tax cuts etc has not helped. There is still hope though, in recent days, have seen a renewed seriousness - perhaps it might work out this time around.
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Re: Indian Autos Thread -2

Post by Rahulsidhu »

Karan M wrote:GOI's disinterest in the fab semicon chain has been disheartening. They really need to get the right people - actual business folks involved in semicon ops to break the impasse. The usual babugiri file passing, promised tax cuts etc has not helped. There is still hope though, in recent days, have seen a renewed seriousness - perhaps it might work out this time around.
Maybe not the right thread for it, but..

I can totally see why it's important to get local semiconductor manufacturing, but does anyone know of a feasible path to get there? I am yet to see a solid case presented anywhere on how it could be done (as opposed to say, electronics assembly which has been relatively straightforward).

IMHO, GoI simply does not have or even hope to get the kind of expertise needed to lead on this, operationally speaking. Of course they can and should provide financial incentives, but that will only go so far. Even further, any startup cannot I think hope to tackle this very complex problem.

It is a time when countries all over the world are waking up to the importance of having semi fabs on their home soil. It's a highly consolidated industry, with precious few manufacturers (TSMC, Samsung, Intel only if you consider the leading edge nodes) and even fewer suppliers to them (ASML, Applied Materials, Lam Research etc. are very close to monopolies in various segments). Which is to point out that there is a lot of demand and little supply not just for the final product but the factories themselves.

The only path I can see is for the home market to grow to such a size that trade tarriffs on chip imports force semi fabs to be built in India, but right now that would not be good policy, as it would seriously hurt prospects of turning India into an electronics assembly hub.
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Re: Indian Autos Thread -2

Post by Prasad »

We need someone like goyal going to Taiwan and sitting across the table with Taiwanese ministers and tsmc and get a deal signed. The delay is utterly incorrigible.
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Re: Indian Autos Thread -2

Post by la.khan »

Any opinions on iMT transmission Hyundai introduced in Venue SUV in Aug. 2020? How is the acceptance of iMT vs. MT vs. DCT? Or, is this a dud?
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Re: Indian Autos Thread -2

Post by Vadivel »

South Korea and Taiwan elbow out China in chip investment



https://asia.nikkei.com/Spotlight/Comme ... investment
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Re: Indian Autos Thread -2

Post by kit »

Karan M wrote:GOI's disinterest in the fab semicon chain has been disheartening. They really need to get the right people - actual business folks involved in semicon ops to break the impasse. The usual babugiri file passing, promised tax cuts etc has not helped. There is still hope though, in recent days, have seen a renewed seriousness - perhaps it might work out this time around.
https://www.reuters.com/article/india-s ... SKBN2BN12H

India is offering more than $1 billion in cash to each semiconductor company that sets up manufacturing units in the country as it seeks to build on its smartphone assembly industry and strengthen its electronics supply chain, two officials said.
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Re: Indian Autos Thread -2

Post by Rahulsidhu »

https://www.reuters.com/article/india-s ... SKBN2BN12H

India is offering more than $1 billion in cash to each semiconductor company that sets up manufacturing units in the country as it seeks to build on its smartphone assembly industry and strengthen its electronics supply chain, two officials said.
Seems like the right move. Let's wait for the details but while this is unlikely to get us the best and the biggest fabs, it just may attract someone like NXP or Reneseas. Given a reasonable sized (and growing) Auto and consumer electronics assembly industries in India, it might just make business sense taken along with the govt. incentives. Just to be clear, this would be a GREAT outcome.

FWIW, US has a plan to offer ~50B in incentives for new fabs. It's really a mad rush right now.
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Re: Indian Autos Thread -2

Post by Ambar »

India's car sales (dealer deliveries) in Mar 2021 at a near all-time high of 3,20,400 units. The sales for the first quarter of 2021 is almost a million ! I remember back in the mid to late 90s, India's annual car sales was around 240k to 275k units, so we are selling more than that number every month now! This also indicates that the consumer confidence is high, despite concerns around high food and fuel inflation and business uncertainties due to the pandemic, the average consumer is still willing to make big purchases.
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Re: Indian Autos Thread -2

Post by Aditya_V »

Ambar wrote:India's car sales (dealer deliveries) in Mar 2021 at a near all-time high of 3,20,400 units. The sales for the first quarter of 2021 is almost a million ! I remember back in the mid to late 90s, India's annual car sales was around 240k to 275k units, so we are selling more than that number every month now! This also indicates that the consumer confidence is high, despite concerns around high food and fuel inflation and business uncertainties due to the pandemic, the average consumer is still willing to make big purchases.
In 1992-93 Indian Annual car sales were around 170K
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Re: Indian Autos Thread -2

Post by Ambar »

Yes, we sell that much almost every couple of weeks now ! I remember an old interview of Vinod Doshi, the one time CEO of Premier Auto Ltd (PAL), the makers of the famous Premier Padmini aka Fiat . He said in the mid-80s the annual demand for passenger cars was 150k units/year, but since our govt considered all automobiles as bourgeoisie luxury, they only permitted production of 35k cars/year through license raj ! Imagine, this in a time when there was rampant poverty and unemployment, the govt instead of encouraging increasing productivity discouraged expansion This led some really bizarre distorted market in automobiles, one could buy a car (ofcourse after a 10 yr wait period), use it for 5 years and sell it back in the market for more money than the original price when bought new ! So many enterprising individuals began booking cars, scooters and motorcycles and made a profit by selling the booking at the delivery time .
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Re: Indian Autos Thread -2

Post by Ambar »

Petrol prices in MH and KAR crossed the magic 3 digit mark for the first time ever. While the wholesale inflation is already at 10.6% (a 8 yr high) and retail inflation in "real" terms likely higher than that already, the recent increase in fuel prices will only put more upward pressure on the inflation as cost of transportation rises.

We really need some foresight as we spend billions of rupees on highway infrastructure. At some point the government must set goals for the auto manufacturers to atleast have 50% of their offerings in pure EVs by 2030, and our highway network should be ready to support such a change. The entire world economy feels like 2005-06 all over again with commodity prices hitting record highs, Chinese hoarding everything from copper, gold, wheat and steel, and with fuel prices already so high the government will find it difficult to balance growth while controlling inflation and managing fiscal and current account deficit. The only long term solution for this is building infrastructure for phased electrification. By 2050 we should aim to reduce our oil imports by 75%.
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Re: Indian Autos Thread -2

Post by vcsekhar »

Ambar wrote:Petrol prices in MH and KAR crossed the magic 3 digit mark for the first time ever. While the wholesale inflation is already at 10.6% (a 8 yr high) and retail inflation in "real" terms likely higher than that already, the recent increase in fuel prices will only put more upward pressure on the inflation as cost of transportation rises.

We really need some foresight as we spend billions of rupees on highway infrastructure. At some point the government must set goals for the auto manufacturers to atleast have 50% of their offerings in pure EVs by 2030, and our highway network should be ready to support such a change.
The price of fuel in India is high due to government taxes (more than 60% of the price we pay at the pump is tax), this has nothing to price of oil at the moment. Last year when the price of crude went down the govt happily increased the tax to keep the price at the pump the same and pocketed the difference for welfare policies.
Yes, the highways being built now should have facilities for fast charging every few Km to drive electrification of the transport industry but the current problem can be easily resolved by the government as it is totally in their hands.
cheers...
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Re: Indian Autos Thread -2

Post by Zynda »

Did not know where else to post this. Has anybody managed to link their Aadhaar card with Driving Licence online for Karnataka State? I have gone through both Karnataka Transport Website as well as Sarathi Parivahan (Karnataka portal) several times but option for linking aadhaar does not come up to me. Perhaps in Karnataka, linking option is not yet available.

Edit: It seems like in Karnataka (& many other states), folks still have to visit RTO for certain services. Back in March of this year, Gadkari made an announcement that for many services, one does not need to visit RTO in person and services can be availed online at RTO website. Seems like even now such services are not implemented. I hate this thing about India...premature announcement of services which differ from ground reality. I guess its all about optics...each Department wants to show that it is doing "something" progressive.
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Re: Indian Autos Thread -2

Post by rsingh »

vcsekhar wrote:
Ambar wrote:Petrol prices in MH and KAR crossed the magic 3 digit mark for the first time ever. While the wholesale inflation is already at 10.6% (a 8 yr high) and retail inflation in "real" terms likely higher than that already, the recent increase in fuel prices will only put more upward pressure on the inflation as cost of transportation rises.

We really need some foresight as we spend billions of rupees on highway infrastructure. At some point the government must set goals for the auto manufacturers to atleast have 50% of their offerings in pure EVs by 2030, and our highway network should be ready to support such a change.
The price of fuel in India is high due to government taxes (more than 60% of the price we pay at the pump is tax), this has nothing to price of oil at the moment. Last year when the price of crude went down the govt happily increased the tax to keep the price at the pump the same and pocketed the difference for welfare policies.
Yes, the highways being built now should have facilities for fast charging every few Km to drive electrification of the transport industry but the current problem can be easily resolved by the government as it is totally in their hands.
cheers...
We want all kind of first world services but we do not want to pay. How much government has spent on Covid problem until now? From where this money comes. If government starts printing money like some liberals want you would be buying egg for the price of house. So take all aspects in account before you post.
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Re: Indian Autos Thread -2

Post by Ambar »

Very easy to make such statements without taking into account the predicament of the poor and the middleclass who are already paying through their nose for food, energy, healthcare and education. The government nicely boxed itself into this situation by increasing the excise duty on fuel when the oil prices were falling between 2014 to 2020 and there by not passing any benefits to the consumer, and now that the oil prices have started climbing up , the OMCs are increasing the price of fuel to adjust to the increasing crude oil price. So the poor consumer gets shafted when the international oil prices fall and get shafted again when oil prices rise.

Ignoring the state VAT, the central excise duty is Rs.32.90 per litre of petrol sold and Rs31.80 per litre of diesel sold, respectively. As a comparison in 2014 the central tax on petrol was Rs9.48 per litre and that on diesel was ₹3.56 a litre before NDA-2. Remember states also increase VAT and octroi when center increases excise and the result is a consumer paying 2/3rds of the per litre cost of fuel in taxes alone.

Fuel price increases does not end at the pump. LPG, the fuel of every kitchen in every household irrespective of the income/social strata has doubled in the last 7 years. In just 6 months the govt increased fuel prices by over a dozen times. LPG household cylinder which was Rs590 in December is now Rs860 in Karnataka. As fuel prices increase, so does the transportation cost of everything from construction material, medicines, factory raw materials, food and fuel itself. The cascading effect will only burden the middle class and the poor who are already reeling with food prices that are up anywhere from 30% to 100% year over year .

I said so before the Bengal elections that Nirmala Sitharaman is being politically foolish with her policies, when BJP karyakartas start mocking "acche din" memes on whatsapp be worried, and the relentless increase in the prices did have an impact on polls. Inflation and not national security or hindu matters was the biggest reason for ousting of UPA-2. Control it or prepare to perish.
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Re: Indian Autos Thread -2

Post by venkat_kv »

Ambar wrote:Very easy to make such statements without taking into account the predicament of the poor and the middleclass who are already paying through their nose for food, energy, healthcare and education. The government nicely boxed itself into this situation by increasing the excise duty on fuel when the oil prices were falling between 2014 to 2020 and there by not passing any benefits to the consumer, and now that the oil prices have started climbing up , the OMCs are increasing the price of fuel to adjust to the increasing crude oil price. So the poor consumer gets shafted when the international oil prices fall and get shafted again when oil prices rise.

Ignoring the state VAT, the central excise duty is Rs.32.90 per litre of petrol sold and Rs31.80 per litre of diesel sold, respectively. As a comparison in 2014 the central tax on petrol was Rs9.48 per litre and that on diesel was ₹3.56 a litre before NDA-2. Remember states also increase VAT and octroi when center increases excise and the result is a consumer paying 2/3rds of the per litre cost of fuel in taxes alone.

Fuel price increases does not end at the pump. LPG, the fuel of every kitchen in every household irrespective of the income/social strata has doubled in the last 7 years. In just 6 months the govt increased fuel prices by over a dozen times. LPG household cylinder which was Rs590 in December is now Rs860 in Karnataka. As fuel prices increase, so does the transportation cost of everything from construction material, medicines, factory raw materials, food and fuel itself. The cascading effect will only burden the middle class and the poor who are already reeling with food prices that are up anywhere from 30% to 100% year over year .

I said so before the Bengal elections that Nirmala Sitharaman is being politically foolish with her policies, when BJP karyakartas start mocking "acche din" memes on whatsapp be worried, and the relentless increase in the prices did have an impact on polls. Inflation and not national security or hindu matters was the biggest reason for ousting of UPA-2. Control it or prepare to perish.
Ambar Saar,
I will only comment on the price of fuel at the pump. Everything that you have said is true about govt pocketing the excess when crude oil was low and even now when it has gone up. Just want to add that in the 30 odd rupees the central excise duty about 40 percent is given back to states. So the centre actually gets about 18-20 of the 32 odd central excise duty.

the states get a total bigger share counting the vat as well. So if the Center is using this money to build highways and myraid infrastructure, shouldn't the states also shares and reduce some of the burden. Most of the national highways comes from the Centers kitty. So states using all this money to balance their budget is an issue and this includes BJP ruled states as well.
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Re: Indian Autos Thread -2

Post by Ambar »

Both center and the states are to blame but the center mostly for controlling the price of fuel such that the consumer is never at an advantage. It isn't very wise to increase the excise tax when you know millions have suffered loss of livelihood or are at a severely deteriorated financial state. And it is like pouring gasoline (no pun intended!) on fire when your already chronically high inflation has now hit double digits (WPI) even by government's calculation and instead of decreasing the tax burden on the consumer you do the reverse.
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Re: Indian Autos Thread -2

Post by rsingh »

Politicians do not like to reduce taxes
They need money for various projects because whenever something is wrong Politicians are first to be blamed. Poor people who want want police as efficient as that of western countries do not know about resources we have? Under paid ( thus taking bribr) over worked police is expected to do forensic analysis of brick throwen by neighbour. Every now and than govt announces public welfare programmers. GOI need money for that. Food inflation is temporary most of time and it may be due to lots of other factor. Electricity is not the most expensive in world. Farmers get free in Punjab. When commodities are expensive it increases efficiency
If Punjab farmers are asked to pay for electricity, wasteful consumption wil be down. This us how society us Managed in developed countries. Your litter ic collected you pay. You cover public place for you private purposes, you pay. Only air is free. Do not forget that Ll these operations creates employments and money is redistributed.
Take Haryana. People are happy that got hired universal pension amount. They Re happy to drive fuel guzzling tractors to protests for fun. But when you ask them to pay ...no no .
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Post by rsingh »

Let's assume that govt reduces taxes on hydrocarbons. Oil consumption will go up and we have to import more oil . Efficiency goes down. People are get incentive to buy fuel drinking suvs and other vehicles. Companies have no incentives to introduce better vehicles. Transporters are happy. They will not spend modern fuel efficient vehicles.
Oil producing European countries have highest tax in the world. Savings are transferred back to public in the form of public security system. That is the wY to go. You do not like high price? Do not do useless travels. Do not buy car just for prestige. Use public transport. Use bicycle for local needs if you can.
I know most of Brites know this. It is nothing new.

To sum up if you want service be ready to pay for it. Goi is doing not bad. Subsidies on ration distribution , better roads for quicker and better transport, electrification, vaccine , more school and colleges. Universal pansion in few states, which was not not there when pTrol was at 32 Rs/ Lt.
So when we are criticizing govt for not reducing tax on hydrocarbons,......we have to consider all factors. Govt is not fool to chock the economy hiking transport. It is well calculated move and one do not have to be an economist to understand that.
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Re: Indian Autos Thread -2

Post by nachiket »

There is a limit to how much you can squeeze consumers with taxes before it starts having huge detrimental effects on the economy. People forget now but the economy was in deep trouble even before the pandemic came around and one of the biggest reasons for that was poor consumer demand which had cascading effects on everything else. And increasing taxes on fuel, as Ambar explained above results in inflation going up and squeezing consumers even more across the board. Comparing our taxes with European countries having per capita GDP 25-30 times higher than ours is pointless. High fuel taxes in Germany or the UK will not hurt their citizens anywhere near as badly as they will in India where it will have a direct impact on food security.

I realize that the government is scared of losing revenue at a time when they have already lost some due to the pandemic restrictions, but there has to be some balance if they want to control inflation, especially food price inflation. This is not even counting the impact on our Auto industry which makes up most of our manufacturing. If we remember prior to the pandemic, the slowdown/recession in auto-sales was a huge factor in the doldrums staring at us on the economic front. Well guess what makes people think twice about buying a car/bike/tractor/CV. High fuel prices.
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Post by Cyrano »

Very impressive !

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Post by kit »

maybe we can have our own formula engineering teams testing out their designs!! .. indeed, it was the digital engineering tech that spawned the new gen american fighter planes
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Re: Indian Autos Thread -2

Post by Ambar »

With delta variant spreading in the west, oil prices have dropped from $75/barrel to $65. If oil prices holds at this level then it will be interesting to see if petrol prices in India will be revised downwards. The Finance Minister and the petroleum minister have continued to blame previous administration's OMC bonds for high prices. Trouble is they've been blaming the OMC bonds for high prices since 2014 ! The interest burden on OMC bonds is around Rs 10,000 crores per year, where as the average central excise collection per year on petroleum products since 2014 has been > Rs 1.5 lakh crores (and last fiscal it was over Rs 2.5 lakh crores).

I have tried to see the method in madness of taxing fuel so high but have failed. If the government is using this money on various welfare schemes then a regressive taxation like high excise tax on fuel to fund such programs will nullify any benefit . Besides, regressive taxes impacts the poor and the middleclass more than the rich. High fuel prices means higher transportation costs which translates into higher everything from food to construction material to industrial raw materials to even higher wages.

The government needs to realize that whatever noble programs they maybe funding through fuel taxes will only work if the same government continues to be in power, else the minute you lose power the new government will pull the plug on your programs.

Posting yesterday's Swarajya's article on high oil prices in full.

UPA's Policies Cannot Explain High Oil Prices Today; Centre Must Cut Oil Taxes

Indian governments, both at the Centre and states, love taxing oil like nobody’s business. It makes sense. There are no compliance costs to extract this price, the commodity is essential to day-to-day life of individuals and businesses and when every government of every political hue is in on the ‘loot’, it’s easier to continue with the extortionate taxes.

One would be fine if the politicians in power simply accepted this fact with honesty rather than furthering one farcical justification after another to defend the indefensible.

In June this year, the then Oil and Petroleum minister Dharmendra Pradhan said that while he accepts “that current fuel prices are problematic for people but be it the central or state government, over Rs 35,000 crores have been spent on vaccines in a year. In such dire times, we're saving money to spend on welfare schemes.”

The situation is not so dire. India recorded GST collections of over Rs 1 lakh crore for straight eight months before it fell to Rs 92,000 odd crores in June but rose again to Rs 1.16 lakh crore in July. In fact, in the first three months of FY2022, the Centre has met 26 per cent of the target of its own budget estimates of GST collection. Right on track.

Yes, there was dire problem last fiscal due to Covid-19 (and the year before that due to falling GDP growth) but even in a pandemic year, the Centre realised total excise duty of Rs 3.9 lakh crore from oil, a 77 per cent jump from the previous year’s Rs 2.2 lakh crore. This, when the consumption of oil contracted by 10.6 per cent during the year due to lockdowns and slowdown.

Of course, the rationale of taxing to death a critical resource (as oil is to economy) to bridge fiscal deficit when the economy is beginning to recover is beyond oneself.

Pradhan also offered another excuse. In February this year, during the Parliament’s question hour, he said that “When the international price of crude oil is higher, we have to increase the prices and when the international price is lower, we have to decrease the prices here too. This is a market mechanism which is followed by oil marketing companies. We have given the freedom to them.”

The same market mechanism and freedom goes for a toss whenever elections are around the corner. Oil prices are frozen at regular intervals on the government‘s direction during elections — whether it was during 2017 assembly elections in Punjab, Goa, Uttarakhand, Uttar Pradesh and Manipur in April, Gujarat in late 2017, Karnataka election in 2018 or general elections in 2019; and before the elections in West Bengal, Puducherry, Assam, Tamil Nadu and Kerala earlier this year.

Now, Union Finance Minister Nirmala Sitharaman has come up with a novel excuse. That the previous UPA government’s bad decisions are behind high oil prices.

In fact, it’s not so novel. The same argument was made when the global crude oil prices crashed after Modi government came to power but the taxes were raised and the benefits were not passed on the consumer. "Congress party (government) purchased oil bonds of Rs 1.44 lakh crore that we (NDA govt) inherited. Not only this, we also paid Rs 70,000 crore on interest part alone. In total, we (govt) discharged our responsibility by repaying over Rs 2 lakh crore,” Pradhan had said in 2018.

Wonder how many times the same argument can be repeated. More importantly, why is Sitharaman talking about the same oil bonds if the NDA government had indeed paid the pending principal and interest amount as claimed by Pradhan? Because, the government has not yet cleared the principal amount.

“If I did not have the burden to service the oil bonds, I would have been in a position to reduce excise duty on fuel,” Sitharaman said. “Previous government have made our job difficult by issuing oil bonds. Even if I want to do something I am paying through my nose for the oil bonds. A significant amount is going for interest payment and principal repayment. What unfair burden on me,” She added.

But the truth is that the interest on oil bonds paid in the last seven years amounted to Rs 70,195.72 crore i.e. around Rs 10,000 odd crores each year. It is estimated that an increase of Rs 1 as oil tax adds about Rs 13,000 crore to the government’s tax kitty.

How much has the government increased the taxes in rupee terms? Central excise on petrol jumped from Rs 10.38/litre in March 2014 to Rs 32.98/litre today. For diesel, the increase in excise was even more, going from Rs 4.58/litre to Rs 31.83/ltire.

As far as VAT is concerned, for Delhi, it increased from Rs 11.9/ltire in 2014 to about Rs 18.94/litre for petrol and for diesel it increased from Rs 6.41/litre to Rs 10.8/litre from 2014 to today. That’s an increase of Rs 29.64 in petrol taxes (both excise and VAT) and Rs 31.64 in diesel taxes. (Centre’s additional excise alone is Rs 22.6 and Rs 27.25 per litre for petrol and diesel respectively)

No wonder that the central government’s revenue from oil taxes has gone up from Rs 53,000 odd crores in FY2014 to Rs 3.9 lakh crores in FY2021, increasing seven times in such a short period. This is because, between FY15 and FY20, excise duties were raised a record 12 times and lowered only twice.

The extra revenue earned by the Centre in just 2020-21 fiscal year alone (due to increase in excise duties - Rs 1.8 lakh crore) was not only enough to pay off the principal amount of Rs 1.3 lakh crore owed from UPA era oil bonds but also enough to pay for the last seven years of interest payments paid in lieu of those bonds (well, almost).

Sitharaman’s complaint is thus economical with truth. At the very least, she should go back to pre-pandemic oil taxes and cut excise by Rs 13 for petrol and Rs 16 for diesel. For FY2022, the Centre has estimated to net Rs 2.75 lakh crore from oil taxes, i.e. a good Rs 1.15 lakh crore less compared to last year. That means, at the very least, a reduction of Rs 9-10 for both petrol and diesel can be done without disturbing the financial math.

There is absolutely no justification to continue with such extortionate oil taxes. Global crude oil rate is moderate, dollar-to-rupee exchange rate is more or less the same as before, oil marketing companies are not under heavy debt or financial stress or making losses, fuel subsidies are far from a problem now unlike in the past — all the excuses given earlier to justify extremely high taxes on oil are not applicable today.

The government must not take people’s disaffection over this issue casually. It must address it before their anger boils over.
Last edited by Ambar on 20 Aug 2021 02:23, edited 1 time in total.
Cyrano
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Re: Indian Autos Thread -2

Post by Cyrano »

High taxes on fuel impact disproptionately - the poorer you are, the more you will suffer.

BJP Govt needs to retcify this fast and meaningfully if they care about ANTYODAYA or 2024 general elections.

Can't understand why they're autistic on this fundamental truth.
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Re: Indian Autos Thread -2

Post by Aditya_V »

The Pandemic

1) Who is footing purchase of Food grain- Central Government
2) Who has to pay States for loss Revenue from growth due Pandemic in GST- Central Government
3) Who is footing the Bill for 5KG food grain for 80 crore population- Central Government
4) Who is footing the Bill for Vaccination- Central Government.

The Central Government has lost 8L crores from their Pandemic- they have to compensate the States for loss of GST Revenue, All this with 25 Lac of Crores of UPA Bank Loans being Duds i.e Someone already pocketed them. A High Debt for the Infrastructure in the Country means the only way the Central Government can get out of the Mess is high Taxation. with having its Borrowing Baloon up.

BJP has decided to take the Political Cost for being Fiscally responsible. Ex in 2011 the Capex of Railways was 5700 crore while today is more than 1.07 Lac crore.

There seems to no other way given what was inherited in 2014 than to temporarily Overtax, GST, IT and Now Petrol Diesel to have the infrastructure, Rebuild a broken Banking system- Build the economy.
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Re: Indian Autos Thread -2

Post by Cyrano »

You missed my point entirely. No one is denying the expenditure nor questioning the spend rationale. Its about who is paying for it and how is it affecting them. For anyone below higher middle class, the direct pinch of higher fuel price + indirect increase in cost of living it causes is a double punch in the gut.

The Govt must find a way to tax more those who can afford to pay a bit more, than indiscriminately hit people of all sizes with the same club. Those who are frail will not be able to get up again. I'm not a tax expert so cant suggest alternatives - perhaps someone here can.
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Re: Indian Autos Thread -2

Post by Ambar »

Aditya_V wrote:The Pandemic

1) Who is footing purchase of Food grain- Central Government
2) Who has to pay States for loss Revenue from growth due Pandemic in GST- Central Government
3) Who is footing the Bill for 5KG food grain for 80 crore population- Central Government
4) Who is footing the Bill for Vaccination- Central Government.

The Central Government has lost 8L crores from their Pandemic- they have to compensate the States for loss of GST Revenue, All this with 25 Lac of Crores of UPA Bank Loans being Duds i.e Someone already pocketed them. A High Debt for the Infrastructure in the Country means the only way the Central Government can get out of the Mess is high Taxation. with having its Borrowing Baloon up.

BJP has decided to take the Political Cost for being Fiscally responsible. Ex in 2011 the Capex of Railways was 5700 crore while today is more than 1.07 Lac crore.

There seems to no other way given what was inherited in 2014 than to temporarily Overtax, GST, IT and Now Petrol Diesel to have the infrastructure, Rebuild a broken Banking system- Build the economy.
Its not the central government but the aam janta paying for the above. Besides, the government has kept the petroleum prices in one trajectory throughout the last 7 yrs, something which started well before the pandemic. The excise duty increase on petrol is 348% compared to 2014, the excise duty increase on diesel, the cost of which impacts everything from food to factory raw materials to public transportation is up 900% compared to 2014 !

When a liter of fuel costs Rs 106, it becomes extremely hard to sell "but we are using it for development only" argument. For those who are young and in occupations where wages/earning are adjusted to inflation it may not impact so much, but for the poor, the elderly and those in jobs & businesses where earnings don't go up in tandem with inflation its a enormous burden.

If BJP is willing to accept a political cost for development then they are dumber than i thought. Without being in power, there is very little they can influence on development and infrastructure projects.

India is the world's 3rd largest auto market and yet we haven't come up with clear mandates for EVs. A 50% EV only offering rule by 2030 model year for 2-wheelers and 4-wheelers will go a long way in reducing our reliance on imported petroleum and reduce pollution. Instead what we see under FAME and a handful of states that give EV subsidies does little to encourage consumers to buy EVs instead of ICE vehicles, and does nothing to force manufacturers to offer a certain % of their sale in pure EV. Our EV sales today is lower than that in many tiny european countries. The govt should be spending time formulating a policy to build a EV ecosystem instead of coming up with harebrained capital destructive ideas like the 15 yr vehicle scrappage policy.
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Re: Indian Autos Thread -2

Post by Aditya_V »

I agree it is pretty dumb, but don't fall for media trick, UPA reduced Excise duty accross the board months before the 2014 elections, remove the pre election reduction then it was only a marginal increase till the 11 Rs increase at the beginning of the Pandemic. It was something like 18rs during Normal UPA era which was 21Rs before the pandemic
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Re: Indian Autos Thread -2

Post by Zynda »

Mort Walker wrote:Ford is getting out of India after losing over $2 billion USD over the last 10 years. This is not a good sign for India attracting manufacturing industries.

https://www.detroitnews.com/story/busin ... 255041002/
The exit is Ford's own making...Ford (albeit better than GM) failed to understand pulse of the market and introduce/energize their product portfolios. Their recent hit & a really good vehicle Ecosport has not been updated in the last 10 years. Yes, they introduced 2nd gen along with a few facelifts (and gave a new motor as well) but their offering was not enough to attract consumers. Further, there was not really a huge need to open a 2nd plant in Gujurat...so some nonsensical investment decisions on their end resulted in failed returns. More over, I believe they will retain their engine plant here which will be used for exports. Also read some where that this year Ford India would have come out of red territory slightly but directors at Detroit thought it was not profitable to stick around in India.

In the same Indian auto environment, the likes of Kia, MG Hector, Hyundai & of course Maruti are doing quite well. Recently, even Nissan & Renault has tried to course correct and introduce decent VFM products in the brackets which sells the most. Further, Ford has exited several other international markets...Brazil this year, Australia, Japan & Indonesia among others. Clearly, they want to focus on N America, which is their strong region. Even in Americas, they have discontinued sedan products and doubling down on SUV & Pickup products (usually large ones) which simply does not have a huge market outside of Americas. They discontinued iconic sedans like Taurus & Fusion (not sure if they are offering Focus still).

Next lethargic & apathetic player towards India whose exit may happen is Honda. Toyota gave up on competing in the low end...they are happy over charging for Innova & Fortuner in the high-end and have gone up with rebadging Maruti products in the low-end segment.

On our end, GoI needs to revisit some of its auto tax structure. For example, the 4m rule AFAIK is unique to India...this rule makes it expensive & not worthwhile for many global players to develop India specific products.
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Re: Indian Autos Thread -2

Post by rrao »

cars and motorcycles from KIA motors,Toyota motors and suzuki motors are also assembled in pakistan. These companies have 18 different models which are not available in india , but available in pakistan!!! :shock:
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Re: Indian Autos Thread -2

Post by Ambar »

Their "manufacturing" is all in the form of full imports or CKDs, so it doesn't take much to introduce new models. This is also the reason why you see so many different models in Srilanka, they don't have a domestic auto manufacturing to speak of and get all of their vehicles imported from India and other parts of asia.
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Re: Indian Autos Thread -2

Post by sajo »

There was some buzz around Honda Cars India looking to sell their last remaining plant in In India, in Tapukara, thus winding up their India operations.
Infact, prompted Honda released a rather strongly worded statement about their decision to remain put.
As with Ford and GM before them, their actions on the ground were completely opposite of their "statements" for the media. However, Honda being Japanese, I would expect them to sort of fade away (if that) than announce an abrupt decision to pack up their bags and leave. Heck, even Mitsubishi motors India continues to have a token existence here, lol, once the darling of the executive class in the 90s/2000s. Same as Honda of today. As a bit of a fan and an owner, would sadden me to see them go, but it is what it is.
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Re: Indian Autos Thread -2

Post by rajkumar »

Tesla must commit to buying $500M of local parts in India before its tax cut request can be considered: report

https://www.teslarati.com/tesla-india-5 ... t-tax-cut/
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Re: Indian Autos Thread -2

Post by Ambar »

sajo wrote:There was some buzz around Honda Cars India looking to sell their last remaining plant in In India, in Tapukara, thus winding up their India operations.
Infact, prompted Honda released a rather strongly worded statement about their decision to remain put.
As with Ford and GM before them, their actions on the ground were completely opposite of their "statements" for the media. However, Honda being Japanese, I would expect them to sort of fade away (if that) than announce an abrupt decision to pack up their bags and leave. Heck, even Mitsubishi motors India continues to have a token existence here, lol, once the darling of the executive class in the 90s/2000s. Same as Honda of today. As a bit of a fan and an owner, would sadden me to see them go, but it is what it is.
Self inflicted wounds. It is not just Honda but in 15 to 20 yrs time i expect sun to set on the entire Japanese auto industry. They are no longer leaders in making high quality products at affordable prices, there are many others who have caught up. The koreans first copied the japanese in electronics in less than 15 yrs left the japanese behind in every area from TVs to cellphones to household appliances like washing machines/dishwashers etc. Today they are repeating the same in auto industry where KIA and Hyundai were once the butt of all jokes in auto industry, today they are known to be extremely nimble, complete model refresh every couple of years, loaded with features and all at a decent price something that the Japanese have failed to do since late 90s. With rapid R&D in EVs and autonomous vehicles, the japanese car companies will fall further and further behind the competition.

Going back to HMIL, in the first decade of the 2000s their cars (esp. City and Civic) were favorites among the high-flying executives of private companies in India, but since then the high prices, lackluster model lineup, slow refreshes/facelifts, super-expensive options have all allowed the competition to capture what was once Honda's niche market. Toyota too would have gone the same way but thanks to its overpriced and under-engineered Fortuner/Innova Crysta that are darling among politicians, aspiring politicians, PWD contractors and your friendly neighborhood goons they have survived so far. They have also been wise in just rebranding marutis to keep their lineup wide and refreshed. Long term i expect both Honda and Toyota to call it quits from the Indian market.
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Re: Indian Autos Thread -2

Post by vimal »

I used to be a Toyota fan and they still make reliable cars but the features are so far behind competition at the same price range. They are just coat-tailing on their past glory.
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