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Old 24th January 2007, 11:09   #1
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Default Hyundai blows whistle on small car norm

In what signals an emerging battle among small car manufacturers, Hyundai Motors India Ltd (HMIL) has asked the country's apex auto association to act against moves by “some pressure groups” to change the definition of a small car.

A change in definition could jeopardise the Korean company’s plans to launch a premium 1.1-litre hatchback car codenamed Pa and lead to huge revenue losses on account of higher excise obligations.

In a letter written to the director general of the Society of Indian Automobile Manufacturers, HMIL Managing Director H S Lheem alleged that vested interests were lobbying the Ministry of Heavy Industry to reduce the stipulated length limit for a small car from the current 4 m to 3.8 m.

Small cars, which include the Santro, Maruti Alto and Wagon R, attract an excise duty of 16 per cent, against 24 per cent for large cars.

Lheem’s letter went on to say, “The entire effort and investment that has gone into making a particular model [would] go waste” as a result of any change in norm.

Source : Business Standard Ltd.
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Old 24th January 2007, 11:16   #2
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I wonder if Maruti and Tata arent sleeping with each other
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Old 24th January 2007, 11:46   #3
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- Getz doesn't qualify for the lower excise duty because of it has an engine bigger than 1.2L.
- GM spent money and effort to change the UVA engine to less than 1.2L, so that they can save on excise duty.

How can Hyundai digest (possible) sales of U-VA when they haven't been able to sell Getz. If you cant win the game, change the rules...
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Old 24th January 2007, 12:09   #4
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Hyundai is not asking for changing the rules, they want the rules to remain the same.
Getz is 3.81 meters and if rules are changed the getz diesel will lose out from excise duty benefits.
Manufacturers spent a lot of money after 4m/1.2/1.5ltr rule was made and put their roadmaps in place. Changing the norm right now would mean all wasted effort.
The ministry could have made 3.8m from the beginning(its what europe calls A class), but since they didn't they better stick to it.
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Old 24th January 2007, 12:40   #5
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Indian policy makers look so fickle minded. They keep changing policies at their whims and fancies. I do not see anything wrong in Hyundai blowing whistles here. When the manufacturers spend huge amount of money in R&D to make use of the sops, they feel cheated if such a policy change comes up all of a sudden. It is not just Hyundai, but lot of other manufacturers who will feel the pinch. For example, Ford and Fiat are planning to get their Fusion and Grande Punto models to the 4 m mark. They will feel the pinch too.

The policies should be well thought of before announcing and after announcing them, they should not change them so often. It is just a bunch of few vested interests who are trying to lobby for such a change.
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Old 24th January 2007, 13:21   #6
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When they change to 3.8 mts, obviously, the maruti is benefitted and inturn it will help govt to make more money towards maruti share sale.

After they change to 3.8 mts(if at all), then only, 800, ZEN, swift, wagonr, indica and new fiat palio (1.1 lts) will avail the benefits...
There should be some level playing field in the industry..

Aveo UVA is > 3.8 mts, getz > 3.8 mts..
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Old 24th January 2007, 14:23   #7
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Lets not be so harsh on our policy makers - its just lobbying by some manufacturers and nothing more than that. My take is that it wont be considered.
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Old 24th January 2007, 14:38   #8
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Quote:
Originally Posted by Equus View Post
Lets not be so harsh on our policy makers - its just lobbying by some manufacturers and nothing more than that. My take is that it wont be considered.
.the govt wont make changes in the policies so soon.
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Old 24th January 2007, 14:57   #9
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Quote:
Originally Posted by navdeep View Post
“some pressure groups” to change the definition of a small car.
I feel there is some bias or help to maruti.
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Old 24th January 2007, 14:57   #10
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What a farce!

Increasing the dimension of a small car is acceptable. It shows maturity and economic advancement of the industry.

But how can they reduce the size?
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Old 24th January 2007, 15:03   #11
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Quote:
Originally Posted by hellspawn View Post
.the govt wont make changes in the policies so soon.
Yeah.... have to agree with you... that wud mean more work for them..
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Old 24th January 2007, 16:02   #12
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Agree with you..

Last edited by mahadev_kc : 24th January 2007 at 16:06.
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