INDUSTRY
COMPETITION, CURRENCY WOES HIT AUTO COS' GLOBAL AMBITIONS
Lijee Philip
The Economic Times (Web & Print Edition)
Mumbai: Auto and two-wheeler makers like Bajaj Auto, TVS, Ashok Leyland and Tata Motors are finding it difficult to scale up their global manufacturing plans given that most of them are currently loss-making. Recessionary trends and a fluctuating currency have hurt the cost structures of these plants, making them highly unprofitable.
TVS and Bajaj Auto, which set up two-wheeler operations in Indonesia, incurred losses of Rs 88 crore and Rs 48 crore, respectively, in 2008-09. Tata Motors, which has a pick-up plant in Thailand, posted a loss of Rs 89 crore for FY09, while Ashok Leyland, which has a bus-making unit at Ras Al Khaimah and a truck-making plant in Czechoslovakia called Avia, are apparently incurring losses.
There are well-entrenched global players in these markets and it is difficult to compete with them with a limited product portfolio, said M Sabarad, senior analyst at Centrum, a Mumbai-based broking firm. After October 2008, the retail financing companies suffered a liquidity crisis and tightened credit norms. Interest rates were increased and it affected the automobile sales. This was a major hindrance affecting the scalability of most overseas plants, said a senior official from Bajaj Auto.
The fall in the prices of commodities like palm oil and coal directly affected consumers disposable income and affected sales. Indonesia has been a hub for Japanese bikes for the past 40 years. "For us, 2008-09 was the first full year of operation. We are here for a long haul," said a senior official at Bajaj Auto.
Analysts say that Indian companies do not have the wherewithal to compete with Japanese players, and find it difficult to grow in these markets. Even though the Indonesian two-wheeler industry grew by 33% in 2008, it too, like every other sector, saw sales falling post-October 2008. The industry forecasts 5.2 million vehicles for 2009 compared to 6.2 million in 2008, a growth setback of about 14%.
It was in August 2007 that TVS Motor Company Indonesia, a subsidiary of TVS Motor, started marketing its product. The company has sold 20,000 vehicles in Indonesia up to September 2009 and markets three of its products in the Indonesian market. The South African automobile industry has also been hit with vehicle sales falling by more than 10-15% in the past 12 months. Since Tata Motors started operations in Thailand in 2007, it has launched a range of pick-up vehicles, comprising the Xenon CNG and also the Xenon single cab.
"This is a nascent operation in the worlds second-largest pick-up vehicle market after the US. The company is making steady progress, in a market of about nine players, in which we are the last entrant," said a Tata Motor official.
Industry observers say that global markets are picking up, with the automotive industry showing considerable progress for the July-September 2009 period. The auto companies are adhering to stringent global quality standards to ensure that their products enjoy strong and positive word of mouth from users.
"Gaining and sustaining the trust of customers, however, will always remain the main challenge in this market," said a senior official at TVS. The auto companies have also adopted the distributor model instead of setting up manufacturing and assembly units with a strong emphasis on fuel-efficient products. Companies have also started focusing on other markets like Latin America, Sri Lanka and Africa to fuel growth.
Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
http://economictimes.indiatimes.com/news/news-by-industry/auto/two-wheelers/Competition-currency-woes-hit-auto-cos-global-ambitions/articleshow/5178519.cms
AFTER A TOUGH YEAR, INDIAN AUTO COMPANIES RARING TO GO
Chanchal Pal Chauhan
The Economic Times (Web & Print Edition)
Mumbai: The Indian automobile industry demonstrated great resilience to withstand the global economic downturn that resulted in a sharp fall in sales in some of the largest car markets. While passenger car sales in India grew 0.31% in FY09, the growth surged 14.75% in the first six months of the current fiscal. The main reason could be a revival in overall demand due to the impact of the governments stimulus package that was announced at a time when car
and two-wheeler sales were skidding.
Experts attribute various tax relief policies, easy accessibility of finance, launch of new models and exciting discount offers for the growth in car sales in the last one year.
It was one of the most timely steps that revived demand and customer sentiment, said Society of Indian Automobile Manufacturers (SIAM) director general Dilip Chenoy.
Global recession had some impact on the Indian automobile industry as reflected in the car sales figures of the last financial year. Industry sales remained almost flat with a 0.71% growth in FY09 though the cumulative production data for the year showed a 2.96% growth over the previous fiscal.
The industry has high hopes for 2009-2010, as banks have reduced interest rates and a majority of car buyers is more confident than they were a year ago.
The turnaround came in the current fiscal when domestic sales grew at double digits over the same period of last year and touched new heights in September when 1.67 lakh vehicles were sold. While sales remained the highest-ever, the demand is expected to go up in the next few months.
Maruti Suzuki India, the countrys largest carmaker, expects buoyant demand in the domestic market to help it notch double-digit growth for the rest of the year.
Said Maruti executive officer (marketing & sales) Mayank Pareek: There has been an upsurge in demand and sales to institutions and private companies employees. It has been one of the best year in Marutis history and we expected to round off the year with highest sales ever.
The two-wheeler segment has been largely in news due to some terrific sales in the past few months. Bikes and scooters registered 15.68% growth to 44.70 lakh units during April-September 2009 over the same period last year, while mopeds sales also grew 15% in the first six months of the fiscal.
Said Anil Dua, senior vice-president (marketing & sales), Hero Honda Motors, The demand has been consistent and the two-wheeler makers have been able to leverage the festive season demand. We expect our retail sales in this festive season to surpass the 6 lakh units mark achieved during the festival period last year. While the demand is expected to spill over to the next few months.
What has come as a surprise is the huge jump in export that was created on the back of global demand for smaller cars and hatchbacks. During April-September 2009, passenger vehicles export grew 35% to 2.11 lakh cars.
The major gainers was Maruti which exported its A-Star hatchback to Europe and Latin America. The company shipped 30,236 units and recorded a 24.8% exports growth over last year.
The countrys largest exporter, Hyundai Motor India, was able to meet the export from its small cars manufacturing hub. Arvind Saxena, senior vice-president (marketing and sales) Hyundai said, We export cars to over 100 countries from our Chennai plant and are banking on new markets to maintain its steady growth in export.
Hyundai has identified 15 newer markets including Australia and New Zealand to sell its popular hatchbacks i10 and i20. We hope that this will be the turning point for the Indian automotive industry and if exports remain strong during the coming months as most countries in Europe has finished their cash incentives to buy new cars, Mr Saxena said.
Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
http://economictimes.indiatimes.com/News/News-By-Industry/Auto/Automobiles/After-a-tough-year-Indian-auto-companies-raring-to-go/articleshow/5178524.cms?curpg=2
UTILITY VEHICLES, TRACTORS DRIVE M&M TO RECORD RS 703-CR PROFIT
The Hindu Business Line (Web & Print Edition)
Mumbai: Higher sales volumes, lower raw material costs and excise duty helped Mahindra & Mahindra post its highest ever net profit of Rs 703 crore for the second quarter of this fiscal compared with Rs 206 crore in the same period last year.
Net revenue was up 34 per cent to Rs 4,558 crore from Rs 3,355 crore. The company sold 55,280 utility vehicles during the quarter, a 44 per cent increase over 38,462 units last year. Tractor sales grew 32 per cent to 38,811 units.
Mr Bharat Doshi, Chief Financial Officer, said there would be some upward pressure in raw material costs. You will see prices firming up in the longer term, he added.
No price hike
However, M&M does not plan to hike vehicle prices. Going forward there would be an increase of five per cent in raw material cost. We would have to consider a hike then, said Mr Anjani Kumar Choudhari, President, Farm Equipment Sector.
M&M has earmarked capital expenditure plan of Rs 7,000 crore for three years including the current fiscal. This includes the Rs 2,500-crore Mahindra Navistar commercial vehicle project at Chakan near Pune. We will invest roughly Rs 1,000 crore for product development, said Dr Pawan Goenka, President, Automotive Sector.
He said that the first product, a medium and heavy commercial vehicle, would debut in the first quarter of next calendar. A sub-3.5-tonne truck is also part of the Chakan plan.
On the Mahindra-Renault joint venture, Dr Goenka said that Logan sales were around 500 units a month. Our business plan is to keep it at that level. We are certainly incurring losses but the figure is coming down quarter-on-quarter as we have downsized the business.
http://www.thehindubusinessline.com/2009/10/30/stories/2009103051620300.htm
M&M Q2 net profit at Rs 843.6 crore
The Pioneer (Web & Print Edition)
http://www.dailypioneer.com/212152/Snapshots.html
M&M Q2 net profit soars
The Hindu (Web & Print Edition)
http://www.hindu.com/2009/10/30/stories/2009103054121400.htm
Sales spurt fuels M&M numbers
The Telegraph (Web Edition)
http://www.telegraphindia.com/1091030/jsp/business/story_11677383.jsp
M&M Q2 net zooms 242% to Rs 703cr
The Times of India (Web & Print Edition)
http://timesofindia.indiatimes.com/biz/india-business/MM-Q2-net-zooms-242-to-Rs-703cr/articleshow/5178404.cms
M&M net skyrockets 185% to Rs 703 crore
Yahoo India (Web Edition)
http://in.biz.yahoo.com/091029/50/baugjl.html
Rise in sales, margin boost M&M profits
Mint (Web & Print Edition)
http://www.livemint.com/2009/10/29222649/Rise-in-sales-margin-boost-M.html?h=A2
M&M net profit far better than expected
Business Standard (Web & Print Edition)
http://www.business-standard.com/india/news/mm-net-profit-far-better-than-expected/374759/
M&M Q2 net shoots 241% on merger, IPO
Hindustan Times (Delhi Print Edition)
M&M net races 243 pc to Rs 703 cr
The Indian Express (Delhi Print Edition)
New Product offerings keep tempo going
The Economic Times (Delhi Print Edition)
SALES, LOW SPENDING HELP RISE IN M&M PROFIT
Shally Seth /Bloomberg
See this story in: mint (Web & Print Edition)
Mumbai: Higher sales and lower spending on raw material, boosted profits at Mahindra and Mahindra Ltd (M&M), the countrys largest maker of utility vehicles and tractors. For the three months ended 30 September, the firms stand-alone net profit soared 241% to Rs702.9 crore and net revenue increased 35% to Rs4,557.77 crore beating analysts estimates. The numbers do not include those of the firms subsidiaries.
The growth was primarily led by the companys utility vehicles portfolio which includes the Scorpio, Bolero and Xylo, and farm equipment. Vehicle sales grew 43.7% over the corresponding period last year to 55,280 units on lower borrowing costs and a festive season that began early. And tractor sales werent affected by the deficient monsoon and grew 32.4% to 38,811 units.
The earnings took analysts by surprise. However, most of them mantain that it will be difficult for the company to replicate its performance in the ensuing quarters. S Ramnath, analyst at IDFC-SSKI Research Securities Ltd said that while the results were better than expected the company will not be able to continue to outperform as raw material costs inch up and sales volumes stabilise. According to Bloomberg data, from the first quarter of the current fiscal to the second, prices of aluminium, steel, and rubber have gone up 24%, 14% and 16% respectively on a sequential basis.
The quarter saw aluminium, steel and rubber prices decline by 31%, 45% and 25% compared to the same quarter a year ago and M&Ms raw material costs expressed as a proportion of sales revenue dropped to 64% from 70.6% a year ago. Anjani Choudhary, president of companys farm and equipment sector said M&M has, on average, saved Rs11000 to Rs12000 on each tractors. Tractors account for 40% of the companys net revenue. He expects raw material prices rising at least 4-5% by the year-end.
A Mint poll of five brokerage firms had estimated a net profit of Rs435.6 crore. Jatin Chawla, an analyst at IIFL Ltd, said: The margins are beyond our estimates and we will be looking at an upward revision of our target price for the stock, he said.
Shares of Mahindra rose as much as 3.6% to Rs923.4 and changed hands at Rs915 at 2.26pm in Mumbai. They closed at 927.75 up 3.93%. The stock has more than tripled so far this year and is the second best performer in the 30-stock benchmark index of the exchange.
Bharat Doshi, chief financial officer at Mahindra and Mahindra, said: The companys best quarterly performance ever. The companys operating profit margins, a significant benchmark of a corporations profitability, climbed almost 12 percentage points to 18.24%. Like the profits of other auto firms such as Bajaj Auto Ltd and Tata Motors Ltd, M&Ms margins were boosted by significant costs savings on the purchase of key raw materials like aluminium and steel.
Doshi admitted that while he does not see an abnormal increase in raw material prices, the upward trend in steel prices will put some pressure on the companys profit margins. And Choudhary said that he sees raw material prices rising by at least 4-5%.
At a consolidated level, the Mahindra groups consolidated revenue and other income during the quarter grew 6.4% to Rs8262.2 crore.
Net profit after considering the Mahindra Holiday Resorts India Ltds initial public offering was Rs843.6 crore against Rs373.3 crore.
However the numbers arent comparable to last years owing to the merger of Punjab Tractors Ltd, in the current fiscal.
http://www.livemint.com/2009/10/30001217/Sales-low-spending-help-rise.html?h=B
M&M: STEPPING ON THE GAS
Shobhana Subramanian
Business Standard (The Compass)
Mumbai: Mahindra and Mahindra (M&M) was expected to post a good set of numbers for the September 2009 quarter, given that the company has recorded high increases in terms of volumes for both utility vehicles (up 44 per cent) and tractors. Stand-alone revenues were up 35 per cent at Rs 4,465 crore, with the company having reaped the benefit of the festive season that kicked in earlier this year.
While the expansion in the operating margin (OPM) on a year-on-year basis was expected, given that raw material prices have come off sharply, its rise to 18.24 per cent has surpassed expectations. The share of raw materials to sales during the quarter has come down by 630 basis points.
Clearly, the synergies from the merger of PTL are paying off and the company is able to save a significant amount on the cost of production, thanks to the much higher scale of operations. In the utility vehicles space, M&M now has a share of 65 per cent, having gained 1,000 basis points over the past year. Contrary to expectations, the Xylo hasnt eaten into the share of the Scorpio, and Bolero continues to be its best selling model.
While the outlook for the automotive sector continues to be fairly bright, given that rural incomes remain strong and urban markets are looking up, what could start pinching is the rise in the prices of raw materials, especially steel strips and tyres.
However, its unlikely that volumes would suffer, unless the company passes on the costs to consumers through price hikes. As for farm equipment, with 40 per cent of rural incomes not dependent on agriculture, a weak monsoon shouldnt hurt demand from the hinterland. Besides, the governments focus on rural India is expected to put money in the pockets of rural consumers.
The M&M stock has had a strong run, gaining 228 per cent since the start of the year, compared with a move of 62 per cent for the Sensex, though there was a brief period in between when it underperformed the market on concerns that a weak monsoon would hurt sales. Analysts had a sum-of-the-parts valuation for the stock of about Rs1,000 and its unlikely this would be upgraded significantly.
http://www.business-standard.com/india/news/mm-steppingthe-gas/374736/
CARNATION PLANS TO SERVICE INDIAS BURGEONING CAR MARKET
Samar Srivastava
mint (Web & Print Edition)
New Delhi: Until about two years ago, Jagdish Khattar presided over the countrys biggest car company, Maruti Suzuki India Ltd. Khattar ensured during his decade and a half at Maruti that the company consolidated its lead with a fleet of unexciting but dependable models against competition from foreign and local car makers such as Toyota Motor Corp. and Tata Motors Ltd.
So what does the man who arguably knows the Indian car market better than anyone else do after retiring from Maruti? He turns entrepreneur.
Two days after leaving Maruti, Khattar began working on the idea that took shape as Carnation Auto India Pvt. Ltd, a chain of car-servicing hubs across the country that has just opened its 12th station.
Entrepreneurship may have been a surprising departure, given Khattars background as a bureaucrathe belons to the 1976 batch of the Indian Administrative Servicebut it is part of the family culture. The Khattars used to run a power utility in Dera Ismail Khan in what is now Pakistan before moving to India at the time of Partition.
A year after the start of his company, Khattar is in a relaxed frame of mind at his office in Greater Noida, Uttar Pradesh.
I was certain the only problems that would crop up would be in execution, he says. It was an idea whose time had come.
Khattar was keenly aware that one of the concerns of car owners across the country was the unsatisfactory job that company dealers were prone to performing. Car buyers, loath to entrust their costly vehicles to roadside service shops, rarely had much choice, however.
The potential market was valued at around Rs15,000 crore, according to a survey that Khattar conducted. A slice of this would be enough to run a viable business.
PremjiInvest and IFCI Venture Capital Funds Ltd bought into Khattars dream with an infusion of Rs108 crore last year.
More believers are lined up, according to Khattar, who says Carnation will close an additional Rs170 crore of funding soon, without naming any of the investors.
Carnations network now covers seven cities across the country, and the company plans to extend coverage to 15 service hubs by the end of the year.
Khattar is also using the outlets to enter the high-margin accessories business.
In Mumbai, Carnation also sells second-hand cars, while his tie-up with designer and rebuild specialist Dilip Chhabria gives customers a chance to customize their cars to any extent.
Globally, independent third-party service centres have carved out a niche for themselves. In Europe, chains such as Kwik-Fit in the UK and Auto Teile Unger in Germany have around one-third of car buyers coming to them. In the US, the number is even higher40% of car owners.
Its an idea that has started gaining traction in India. In the last three years, companies such as Bosch, TVS Motor Co. and Reliance Industries Ltd have moved in to set up servicing outlets, which also serve as accessories shops.
Indias top three car makersMaruti, Hyundai Motor India Ltd and Tata Motorsaccount for around 80% of the cars sold in the country. Some 18 other manufacturers slug it out for the remaining 15%. For the time being, the number of cars they sell is hardly enough to justify a large national service network.
Thats where Khattar steps in. Carnation offers to service any car that retails for below Rs9 lakh. That takes care of nine out of every 10 cars sold in the country.
Ill do a better job than the company dealers at a price thats 10-15% below theirs, he says.
But the big three are not planning to roll over for Carnation. Theyve refused to supply Carnation with spare parts. Dealerships make most of their money on servicing and painting and denting jobs, with margins upwards of 30% compared with 2-3% on new car sales.
Khattar has sidestepped the problem by lining up imports from Thailand and Taiwan to keep the business going.
At some point, this is bound to change, he says, pointing to legislation in the West that prohibits manufacturers from blocking third-party service outlets. (In the US, the Right to Repair Act is the law that allows this.)
Khattar is planning a few tweaks to help him stand out from the crowd. One of these will be mobile service workshops vans sent out to office blocks that will service cars while people are at work. Still in its trial stages, the idea has received an overwhelming response in Mumbai, Hyderabad and Noida.
He has also hired a team of 20 business development executives who visit homes and sell the concept to people, with a free car wash thrown in as an incentive to get customers to visit the outlets.
Khattar has chosen to eschew the big corporate deals that are the bread and butter of third-party outlets in the West. The companies will just push for discounts and freebies, according to him.
Individual customers are our long-term partners and right now my focus is to build that base, he says.
Its going to be a tough task. On a recent afternoon, Carnations largest outlet, a 72-bay hub in Gurgaon, Haryana, had only half its service bays occupied. But Khattar says it will take about two years for the hubs to be fully utilized.
Some customers are less than bowled over by the quality of service, which is supposed to be Khattars key differentiator.
They generally have a slight discount on all their offerings but the reliability could be better, says Saptarshi Biswas who drives a Maruti WagonR. I took my car there once, and while they did a competent job, I was expecting a bit more reliability.
Khattar will need to convince sceptical customers such as Biswas to ensure that more of Carnations empty service bays get used.
http://www.livemint.com/2009/10/29212934/Carnation-plans-to-service-Ind.html
AP GOVT INVITES PEUGEOT TO SET UP FIRM
The Economic Times (Web Edition)
Hyderabad: The Andhra Pradesh government on Thursday went all out to woo French car maker Peugeot, with chief minister K Rosaiah formally asking the French government to convince the automobile firm to set up its manufacturing firm in the city.
"The AP government has offered to allocate around 800 acres of land near the Shamshabad airport to Peugeot along with a 'suitable' package of fiscal incentives and infrastructure benefits," Sam Bob, the industries secretary told ET.
An indication that Peugeot was inclined to setting up a facility in Andhra Pradesh came from a French delegation led by the trade minister, Ms Anne-Marie Idrac during their meeting with the chief minister. The technical teams of the company have already selected Hyderabad after assessing other locations. Peugeot began evaluating locations for its car project in India a few months ago.
The company is understood to be looking at an investment of Rs 1,500 crore for the project. Tamil Nadu was also on the companys radar, amid expectations that Peugeot will roll-out low cost cars in emerging markets like India by 2010. It is also not clear whether the French auto major will bring in the Peugeot or the Citroen brand first.
The global slowdown in the automotive sector has delayed the expansion plans of several car makers including Peugeot. The trade minister is understood to have communicated to the AP chief minister that the car maker is yet to take a decision on the timing of the investment though Hyderabad figured as their top choice.
"Decisions on product portfolio is expected to be taken after the finalization of the location. But, the company intends to launch both Peugeot and Citroen products in a limited time span," said a person familiar with the development told ET earlier.
"We have firmed up the incentives to be given to Peugeot if they set up their facility here. However, the company is yet to furnish a detailed project report," B Sam Bob, principal secretary industries told ET.
If the French car maker decides to set up its facility in the state, it will be the first major investment by an automobile maker in AP. Several attempts were made to woo other car makers including Tata Nano.
The state had offered a Rs 300-crore cash compensation to Tata Motors for re-locating Nano from Singur and setting up an integrated plant here. To sweeten the deal, it also offered 1,000 acres of free land in Hyderabad, Vizag, Hindupur and Tada in Nellore district, and a slew of fiscal incentives making investment on the project virtually free.
But the car eventually rolled out from Sanand in Gujarat.
Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
http://economictimes.indiatimes.com/news/news-by-industry/auto/automobiles/AP-govt-invites-Peugeot-to-set-up-firm/articleshow/5178506.cms
CAR PRICES RISE IN UTTAR PRADESH
Peeyush Khandelwal
Hindustan Times (Web & Print Edition)
Ghaziabad: If you buy your Maruti Suzuki Zen Estillo Vxi from Gurgaon instead of Ghaziabad, the money you save will buy enough petrol to drive over the Golden Quadrilateral twice over.
In fact, you will still have some fuel to spare.
If you register your cars in Noida and Ghaziabad towns, be ready to shell out more.
Vehicles here would now be taxed according to their weight as per the revised Road tax structure of the Uttar Pradesh (UP) government for private and commercial vehicles, including cars and two-wheelers. The rules became effective from October 28.
The new tax structure would not discriminate between petrol and diesel vehicles and cars would be charged according to their unladen weight under different slabs.
As per the new tax regime, two-wheeler owners will be charged a one-time tax (15-year tax) at the rate of 5 per cent of the vehicle cost.
This was earlier charged a flat rate of Rs 1,500 for two-wheelers, said regional transport officer (RTO) Lalji Chaudhary.
Cars would now be charged on the basis of their unladen weight, irrespective of whether they run on petrol or diesel.
Petrol and diesel vehicles were earlier charged at 2.5 per cent and 5 per cent respectively. Now, cars up to 1,000 kg of unladen weight would be charged 5 per cent of the cost of the vehicle, Chaudhary said, adding there were more slabs on the basis of weight.
If a new car, up to 1,000 kg of unladen weight had to pay a one-time road tax of Rs 25,000 earlier, the new rate would be Rs 50,000.
The significance of the weight of the vehicle has now increased more. The more luxurious the car, the more tax you would have to pay, an official said.
It is estimated that most luxury cars would fall in the higher tax slab of 6 per cent and the small cars would come under the 5 per cent bracket. As per an official source, the impact of the new tax rates would see less registrations coming in.
There is a tendency of the people to get their vehicles registered in the area where the tax is low. They may move to Delhi or Haryana if the tax rates are lower. This would affect the incoming revenue to UP, said Harpreet Singh, a resident.
The RTO said that the rates have been revised after 1998.
This was required as the state is providing more facilities and better road conditions to the vehicle owners. The increase is marginal and is based on the ability to pay. There would be minimal impact on their pockets. It has become more rational now, the RTO added.
Vehicle owners disagreed.
This is just another way of gobbling money. If the UP government is charging more in road tax, it should ensure roads are in proper condition. People are willing to pay tax if it is spent on basic amenities, said Sita Sharma, an IT professional living in Indirapuram, Ghaziabad
Higher road tax will dissuade people from registering their vehicles in UP. Delhi is just next door. People will find an address in Delhi and get their cars registered there. So how does it help the UP government? said Rajeev Ojha, a resident of sector 56, Noida.
7http://www.hindustantimes.com/rssfeed/uttarpradesh/Car-prices-rise-in-Uttar-Pradesh/Article1-470704.aspx
UP HIKES ROAD TAX FOR VEHICLES
PTI
See this story in: The Hindu Business Line (Web Edition)
Lucknow: All vehicles, except the solar- powered or battery-operated ones meant for private use, now cost more in Uttar Pradesh as the state government has hiked the road tax for all types of private and commercial vehicles. The new rates have come into effect from Wednesday.
Till now, five per cent of the cost of a private diesel vehicle was being charged as road tax. For a petrol variant, this was 2.5 per cent. As per the order issued by the principal secretary, transport, tax at the rate of five to seven per cent of the cost of a vehicle will be charged as road tax in the state.
This tax will depend on the unladen weight of the vehicle,'' sources said. For instance, on vehicles having unladen weight of upto 1000 kgs, tax at the rate of five per cent of the actual cost will be charged.
Similarly, six per cent tax will be charged on vehicles having unladen weight between 1,000 to 5,000 kg, whereas seven per cent tax will be imposed on vehicles having unladen weight of more tahn 5,000 kg, they said.
Also, road tax being charged on two-wheelers had been linked with the cost of the vehicle.
http://www.thehindubusinessline.com/blnus/27291492.htm
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