This week in auto: Axle load hike brings uncertainty to truck demand, new launches hit the road

The week was dominated by news of several launches ranging from scooters to luxury cars. Some were cosmetic upgrades while others were absolutely new products. Now that the June quarter is over, companies have now started to announce their financial performance. Some regulatory changes on the commercial vehicle front brought some unease to segment players. Before we go into details about this let us first briefly look at all the major developments in the automotive space that took place this week.

Honda recalls new Amaze to fix steering system

Honda Cars India said it will carry out preventive inspection of 7,290 units of its newly launched compact sedan Amaze for possible issues with the steering system. In a statement, the company said it would undertake a product update of the electric-assist power steering sensor on the Amaze manufactured from April 17 to May 24.

Lexus ES 300H debuts in India

Toyota-owned luxury car brand Lexus made its way to India during the week with prices starting at Rs 59.13 lakh. The all-new hybrid sedan replaces its predecessor and is considered to a ‘significant improvement’ over its previous generation version.

Honda Cars India updates Jazz

Honda Cars India has launched an updated version of its premium hatchback Jazz, with prices starting at Rs 7.35 lakh (ex-showroom Delhi). The four petrol variants of the new model are priced from Rs 7.35 lakh to Rs 8.99 lakh, while the three diesel variants are tagged between Rs 8.05 lakh and Rs 9.29 lakh (all prices ex-showroom).

Suzuki launches Burgman Street 125

Suzuki Motorcycle India has officially launched the Burgman Street 125 in India at Rs 68,000 (ex-showroom, Delhi). Though Suzuki is defining the Burgman Street as a maxi-scooter, it sports only a 125cc engine which puts it in direct competition with the Honda Activa 125

BMW Motorrad launches G310 R and G310 GS

German motorcycle heavyweight BMW Motorrad has launched the much- awaited G310 R and G310 GS in India priced at Rs 2.99 lakh and Rs 3.49 lakh (ex-showroom), respectively. These are the first models that BMW has developed along with partner TVS Motor Company and will be made at Hosur, Tamil Nadu.

Audi launches special edition of Q3 & Q7

Audi India has announced the addition of two new special edition versions of the Q3 and Q7 SUVs. Termed as Design Editions, these cars get upgrades on the interiors as well as a few cosmetic changes.

Govt’s new axle load regulations

Now to the highlight of the week. A government notification over new regulations for weight loading of trucks has created confusion and uncertainty in equal measure to manufacturers of commercial vehicles. The Transport Ministry, which had ensured strict adherence to overloading of trucks, has unexpectedly decided to allow trucks to carry 25 percent more tonnage than stipulated.

The government did this after taking into consideration the qualitative and quantitative changes in national highways, coupled with reforms in truck build and quality. This would effectively alter the purchase decision of trucks buyers, especially fleet operators, who would now have to redo their business mathematics.

Fleet operators will naturally bring down the number of trucks they need. For instance, five trucks will be able to bear the same load that eight trucks were supposedly to carry due to the increase in weight restrictions.

The CV market, which has posted robust growth in the past many quarters, is likely to see a demand correction in the near term. This spooked investors enough to dump stocks of Ashok Leyland, Tata Motors and Mahindra & Mahindra.

Chennai-based Ashok Leyland saw its shares slump 14 percent while that of Tata Motors and Mahindra & Mahindra dipped 2 percent each. Ashok Leyland’s senior management agreed there will be a hit on demand in the short term though some clarity on the ruling is required.

Manufacturers are also confused if the 25 percent increase in load is applicable to existing trucks that are currently plying or only for new trucks. If this includes old trucks, then fleet operators will sweat their assets more instead of going in for immediate replacements.

Erich Nesselhauf, Managing Director and CEO, Daimler India Commercial Vehicles, said, “DICV fully supports the ministry’s strategic targets to elevate the regulatory framework for the Indian CV sector to match international standards.”

It also raises the issue of safety. “We share the concerns voiced by SIAM regarding media speculations about an unconditional inclusion of older vehicles, many of which are in fact technically unfit to carry additional load safely. From our point of view, all owners of vehicles certified under the old norms should be able undergo an efficient, shortened re-certification process before being permitted to carry more load according to the new limits,” Nesselhauf added.