Ford plans to roll out small car by 2010

WITH US automaker Ford’s Indian subsidiary announcing its intention to launch a small car in India by 2010, the Indian small car market is set to witness an explosion of small cars. Carmakers are racing to get products on the road by 2010, with global auto giants like Honda, Nissan, Daimler Chrysler, General Motors and home- grown Bajaj Auto all announcing plans to launch their small car by 2010. Tata Motors’ ultra low- cost ‘one lakh rupee car’ Nano, unveiled in January this year, has ignited competition in this sector, hitherto dominated by Maruti Suzuki.

By 2010, the demand for cars is expected to almost double to two million a year. Said Michael Boneham, managing director and president ,Ford India, “The small car segment has 75 percent share on the Indian market, and when we launch the small car, that’s when the real volumes will come in.” This shift in Ford’s strategy is touted by analysts as a global business strategy adopted by other global automakers like Nissan, Renault, Toyota and Honda. All these have acknowledged the merit and scope of producing an ultra low- cost car (ULC). Besides this, looking at factors like fuel economy and volumes, global auto companies are under pressure to target this growing segment, analysts say. Ford’s small car will most likely be sold with diesel and gasoline engine options, Boneham said, on the sidelines of a news conference, to launch an upgraded range of Fiesta sedan cars.

Ford’s new engine manufacturing facility will be set up in 2009- 10 with a capacity of 2,50,000 units per year. “The plant will fulfill the entire domestic demand and will also cater to the needs for ford in the Asia Pacific region,” said Boneham. Ford currently produces the Fiesta, Ikon and Fusion sedans, and the Endeavour SUV in India. The company had recently shut plants and cut workforce in North America amid financial losses. It has announced plans to invest $500 million in India to expand production capacity and make the new small car.

Ford is also exploring the possibility of introducing eco- friendly vehicles that run on alternative fuels or hybrid cars in the Indian market. According to the McKinsey Global Institute, consumers in the Rs 90,000 to Rs 2- lakh- a- year salary bracket will form the largest portion of India’s income pyramid in 10 years. These form the target for Tata’s Nano. Now, even global auto makers are targeting this segment. Toyota Kirloskar Motor (TKM), a joint venture between Japan’s Toyota Motor Corp. and India’s Kirloskar Group, also plans to invest Rs 1,400 crore on anew plant in Bengaluru, from where it will roll out its small car in abid to tap the largest segment of the car market in India. Said Vaishali Jajoo, auto analyst, Angel Broking, “Growth for global auto markets in developed markets is in single digits, whereas the small car market is projected to show a double digit growth in the coming five years. Besides this the (small car) market contributes over 50 per cent to the overall car sales in the country. Factors like cost efficiency are also a big push for global biggies.” The move has also set off a flurry of activity among component vendors, with most original equipment manufacturers (OEMs) gearing up their volumes for small cars to be launched by Renault- Nissan, Bajaj, Honda, General Motors and others.

JLR launches major recruitment drive

TATA owned Jaguar- Land Rover (JLR) has announced a major drive to recruit 600 engineers and technical staff to work on its 700- million pounds project of developing a new generation of cleaner and eco-friendly vehicles. The initiative comes only weeks after JLR was bought by Indian car giant Tata Motors from Ford for 1.5 billion pounds, but the former is not directly involved with the project though it has approved the plan. “This recruitment drive demonstrates Jaguar Land Rover’s confidence in our future. With our new owners, we have entered an exciting era with stunning new models and ambitious technologies,” newly- appointed chief executive David Smith said on Wednesday. The company has invested in sustainable technologies to meet European Union emissions target and is looking for experienced, degree- educated engineers to work on a variety of ground- breaking projects.

Most of the jobs will be based at the group’s development centre in Gaydon, Warwickshire. Besides, there are a number of vacancies in its purchasing, finance and human resources departments. It is also launching a programme aimed at recruiting more than 80 graduate trainees as well as 60 apprentices under an Advanced Modern Apprenticeship scheme announced in March. “This is probably the biggest single recruitment drive in the history of the two companies and it demonstrates that this is ago- ahead business with a strong future,” said a spokesman of the company. Kiran Virk, policy adviser at Birmingham Chamber of Commerce and Industry, said the recruitment drive was a welcome boost to the manufacturing sector which is trying to fight off increasing raw material costs, a downturn in the economy and global competition.

Car Care Tips During Monsoon

TYRES

Make sure your car tyres are in excellent condition before the monsoons arrive, as these will be in constant touch with the wet slippery roads. To avoid skids and unwanted jolts, make sure your tyres have good tread depth. Compromising on this could prove dangerous. Car tyres should be minimum 2mm in depth, including your spare. Fine parts of dust get entrenched in the tyres, causing them to skid. Rubber has a tendency to soften when it comes in contact with water. Check the tyre pressure regularly and inflate it to recommended pressure when it is cold. This increases driving comfort and the life of your tyres.

WIPERS
The wiper blades are better when new. Always make sure they are of good quality, no streaking and smooth functioning. The wiper blades should not be hard and cracked, as these will cause scratches on the windscreen. Check that the wipers are working in all the three speeds (normal, slow, fast) before you start out on your drive. Instead of ordinary water for your windshield wiper, try using some solution like soap solution for better visibility.

BRAKES
The most crucial part of a vehicle, brakes calipers, must be regularly cleaned and replaced. Brakes should not be too loose or too tight. Keep using the car brakes as water may make the brake drums wet, causing low braking efficiency. Keep taking your car for regular service check-ups. You can dry out the wet brakes by placing your left foot on the brake pedal and gently moving the throttle with your right foot. Make sure the handbrake works fine.

WATER-PROOF IT
To prevent the car body from rusting, use an anti-rust coating on the car fittings. Service your engine and make sure it is made water tight. It would be a good idea to use an anti-moisture spray or simply remove the plug and clean out the moisture with a cloth.

CAR INTERIORS
Many a times, water flows into the cabin area, damaging the carpets and flooring. Place old mats on your car floor, so that these soak up the dirty water. It would be a better option to use fabric mats rather than rubber ones. Vacuum clean the car interiors regularly and use car perfumes with light fragrances that will also make your car smell fresh. This will keep the car interiors clean and smelling fresh. If your car seats get wet, keep the windows open, to avoid the formation of fungus.

ELECTRICAL PATCH-UPS
Patch up all the weak or loose electrical connections and check if all the external wires are insulated, as these tend to act up in the rains and during the monsoons. Take care to remember that exposed wires, if any, should be properly insulated. Coat battery terminals with petroleum jelly (not grease) and use a waterproofing spray to keep the electrical system moisture-free. Also check to see if all the fuses are in order and ensure that you always carry a few extra fuses with you.

Drive safe

The Met Department has told us the monsoons are almost at our doorsteps – a week prematurely. Now every driver knows that one has to take a great deal of care when it comes dealing with wet conditions on the roads. There are instances of cars skidding, poor visibility, and a whole host of other issues. To prevent trouble on those wet days, we bring you some driving dos and don’ts in the monsoons. Make sure you keep these handy – and take extra caution while being out on the roads.

• Extra oily: Be very careful if it rains after a dry spell. During this time, engine oil and grease build up on the road. The surface of the road, after fresh rainfall, becomes extremely slick. Continued rainfall will eventually wash away the oil, but the first few hours can be the most dangerous. Drive slow.
• Start early: You will need more time to travel because of jams and water logging, etc. Start early in case your route has a traffic jam or is filled up with water. Speeding to make up for lost time is extremely dangerous.
• Mind those brakes: Brake earlier and with less force than you would normally. Not only does this increase the stopping distance between you and the car in front of you, it also lets the driver behind you know that you're slowing down. Also, be more meticulous about using turn signals, so that other drivers know your intentions, and take turns and curves with less speed than you would in dry conditions.
• Don't use cruise control: Cruise control tends to make drivers less vigilant and some could take their foot away from the pedals — not a great idea when reaction time is so important.
• Avoid large puddles: If you see a large puddle up ahead, drive around it or take a different route. Remember, water splashing up into your car's engine compartment could damage its internal electrical systems. Also, a pothole may be hiding under the water, just waiting in ambush to damage a wheel or knock your suspension out of alignment. If you can't gauge the depth, or if it's covering up the side curb, try to avoid it.
• Run away from running water: Don’t try stunts and attempt to cross water running across the road in a torrent. This could mean trouble if the force of the water is greater than the weight of your vehicle. An all-wheel drive isn't going to be much help if your vehicle is being pushed sideways.
• Lights on: Turn on your headlights, even when there's a light sprinkle. It helps you see the road, and, more importantly, it helps other motorists see you. However, don't switch to high beam in the rain or if there’s a mist — it'll obscure your view further, as the light will reflect back at you off the water droplets in the air. If your car is equipped with fog lights, you may find it helpful to turn these on, as these throw a little extra light on the road while making your car easier to see.
• Stay alert: Watch out for pedestrians. An ordinarily observant pedestrian may become distracted by fiddling with an umbrella or a rain slicker. Plus, raindrops deaden sound, so the usual audio clues for measuring car distances become obscured. Keep a sharp lookout for people on the road.
• It’s better to wait: If it's raining so hard that you can't see the road or the car in front of you, pull over and wait.
• Follow your leader: Track the car ahead of you. Let the car ahead pave a clear path, so to speak, through the water.
• Let there be distance: Make sure you maintain extra distance if there is a truck or bus ahead of you. The reason is that their large tyres can create enough spray to block your vision completely. Avoid passing one, but if you must pass, do it as quickly as safety allows.
• Defog: Defog your windows. Rain will quickly cause your windshield to fog up. Switch on both front and rear defrosters and make sure the air-conditioning is turned on.
• Avoid skidding: If you start to hydroplane (Hydroplaning happens when a layer of water builds between the rubber tyres of the vehicle and the road surface, leading to the loss of traction and thus preventing the vehicle from responding to control inputs such as steering, braking or accelerating) don't brake suddenly or turn the wheel, or you might spin into a skid. Release the gas pedal slowly and steer straight until the car regains traction. If you must brake, tap the brake pedal.

We wish you very happy and safe monsoons. Drive carefully!

Price gap between SX4 and Honda City has narrowed

Maruti Suzuki officials refused to comment on whether they would bring down the price or offer discounts on the SX4. “The price gap was not much in any case and the SX4 has gained popularity because of its strength as a good product,” commented a Maruti official who did not wish to be identified.

The two Japanese companies have been locked in a tough battle to increase their share of the fast- growing mid- segment of the Indian car market. Ford Fiesta and Hyundai’s Verna have also been notching up strong growth in this category even as Maruti Suzuki launched the Dzire sedan recently in order to add to the competition.

The mid- size segment of the Indian car market registered an overall growth of 14.61 per cent for the financial year ended March, 31 2008 at 2,25,719 units, up from 1,96,942 units in 2006- 07. According to industry body Society of India Automobile Manufacturers (SIAM), Maruti Suzuki emerged the leader in the segment during 2007- 08 with a market share of 21.85 per cent, a huge jump from the fourth spot that it held in 2006- 07 with a market share of 15.08 per cent. The company sold 49,335 units in 2007- 08, compared to 29,697 units in 2006- 07 to clock a growth of 66.13 per cent.

Maruti succeeded in pushing the once undisputed market leader Honda to the second slot reducing its market share to 17.95 per cent for the financial year ended March 31, 2008 from 20.55 per cent during financial year 2006- 07.

Honda City escapes tax hike by whisker

HONDA City has escaped, by the proverbial whisker, from the increase in central sales tax announced by the government on Friday. As a result the model appears to have gained vis- à- vis its arch rival Maruti Suzuki’s SX4.

Honda City has a1,497cc engine, which keeps the sedan out of the ambit of the central sales tax hike of Rs 15,000, which has been imposed on Maruti Suzuki’s SX4 and other mid- size competitors such as Hyundai’s Verna and Ford Fiesta as the engine capacities of these models are in excess of 1,500cc.

Maruti Suzuki, which is India’s largest car manufacturer, had deliberately priced its Sx4 model below the popular Honda City in order to eat into its market share and succeeded with its pricing policy. It had attracted buyers as SX4 was bigger and yet cheaper than Honda City. However, since it has an engine capacity of 1,586cc the price gap between the two cars has now been narrowed down by Rs 15,000. It now remains to be seen whether Maruti comes up with a discount offer to keep its edge on pricing.

The price of the low- end Honda City EXi is Rs 6,77,000 while the Honda City GXi model has been priced at Rs 7,31,000. In comparison, Maruti Suzuki’s SX4 VXI carried a price tag of Rs 6,38,000 while the higher- end SX4 ZXi was priced at Rs 7,09,000 until Friday.

The price difference between SX4 and Honda City on these two models worked out to Rs 39,000 and Rs 22,000, respectively. Consequent to the Rs 15,000 hike in central sales tax the price gap has been scaled down to Rs 24,000 and Rs 7,000, respectively.

Hyundai comes out with CNG variant of Accent

THE country’s second largest car- maker Hyundai Motor India Ltd (HMIL) on Monday introduced the Compressed Natural Gas (CNG) variant of its mid- size sedan Accent, which will cost Rs 56,500 more than the existing version. The new Accent would be available in dual fuel mode - petrol and CNG, the company said in a statement.

The current petrol version is available for Rs 4.99 lakh (ex- showroom). The dual fuel Accent will use CNG as an alternative fuel. The Accent comes with a1.5 litre petrol engine which, without any modification is compatible with CNG, it added.

Hyundai Motor has tied up with the leading Korean CNG kit supplier CEV, who would provide all the components of the fitment. The kit is not only safe but its advanced Lambda control system ensures adherence to Euro III emission norms, it said.

Last year HMIL had introduced a CNG variant for its flagship model, Santro. It is currently planning to launch LPG variants across all categories, which would kick off with Santro in August. Initially, CNG Accent would be launched in Delhi and the NCR in collaboration with CEV India. “The Accent has been one of our best selling models ever since its launch. Offering it with a CNG kit will only add to its appeal as it will not only be cheaper to run but also eco-friendly,” HMIL managing director H. S. Lheem said.

Late last week, the country’s largest car maker Maruti Suzuki India Ltd launched an LPG variant of its once flagship model M800, priced between Rs 2.05 lakh and Rs 2.26 lakh (ex- showroom Delhi). The new model, M800 Duo, will have dual fuel option of petrol and LPG, the company said.

Diesel powers India’s car sales growth

THE markets may be gripped by fears of an economic slowdown and the government by inflation worries, but the Indian consumer’s love affair with automobiles shows no sign of ending. Despite rising fuel prices, India’s automobile sales grew 8.09 per cent in May, 2008, according to data released by industry body the Society of Indian Automobile Manufacturers (SIAM).

Passenger car sales in the domestic market jumped 14.26 per cent, while total two wheeler sales were up by seven per cent during the month. With the price difference between petrol and diesel going up further, the sale of diesel cars is expected to accelerate vis- à- vis the petrol versions. According to industry sources, the current ratio of car sales in models such as the Swift that is available both in diesel and petrol variant is 60: 40. This means that out of every 100 units of Swift sold 60 are powered by diesel engines, while 40 are petrol versions. Sources disclosed that in the case of Maruti's Dzire the diesel version accounts for nearly 80 per cent of sales while the petrol variant makes up 20 per cent. The new generation diesel engines are a vast improvement over the older ones, which were prone to heavy vibrations and were also noisier.

Ford Motor Company, for instance, has started registering a sharp increase in car sales after it introduced its latest diesel models. The fact that technology is an important factor is reflected in the fact that Tata Motors has reported flat growth even though the company mainly markets diesel models. The company sold 14,228 units in May this year compared to 14,217 units in the same month last year. Mahindra & Mahindra (M& M) has reported a12.98 per cent increase in domestic sales during May at 19,296 units, up from 17,079 units in the same month last year which also goes to show the increasing popularity of diesel vehicles. The company mainly produces SUVs although it has introduced the Logan car recently as part of a joint venture with Renault.

Diesel is Rs 15.76 per litre cheaper than petrol in Delhi and modern diesel engines also give higher mileage per litre than petrol engines, which brings down the running cost of diesel cars even further. However, diesel engines normally cost more to maintain than petrol engines. Each time the government raises the price of transport fuels, the price of petrol goes up more than that of diesel, as a result of which the gap has been widening over the years. The reason is that petrol is still perceived as a rich mans fuel while diesel, which is used in the farm and public transport sectors, is considered politically sensitive.

According to sources, diesel cars have a20 per cent market share in India at present. However, diesel as a vehicular fuel comes in for some criticism from environmental groups on the ground that it is more polluting than petrol. But the car companies claim that modern diesel engines emit less carbon dioxide than petrol engines and the emissions are less harmful. Both Maruti and Hyundai have also introduced alternative fuel options such as LPG and CNG this month in anticipation of some buyers opting for these models as these are cheaper to run than the petrol versions.

LPG variant of Maruti 800

THE country’s largest car maker Maruti Suzuki India Ltd on Friday launched a new LPG variant of its once flagship model M800, priced between Rs 2.05 lakh and Rs 2.26 lakh (ex- showroom Delhi).

The new model, named M800 Duo will have dual fuel option of petrol and LPG, the company said in a statement.

“Dual fuel vehicles have always formed a prominent part of our overall product strategy. Besides, the car is economical to drive and being factory fitted, it is completely safe,” Maruti Suzuki India executive officer, marketing and sales, Mayank Pareek said.

The new M800 will be available in two options— M800 Standard with LPG, priced at Rs 2.05 lakh ex- showroom Delhi, and M800 AC LPG tagged at Rs 2.26 lakh. The company also offers Omni and WagonR in dual fuel options.

Toyota moves ahead on hydrogen cell car

TOYOTA Motor Corp said on Friday it has developed an advanced fuel- cell vehicle that can run for 830 km (516 miles) on a single tank of hydrogen and in temperatures as low as 30 degrees Celsius below freezing (- 22 F).

The zero- emission FCHV- adv will be leased to government agencies, among other possible users in Japan starting later this year, a spokes woman said. The new version of the fuel- cell car, which runs on hydrogen and emits only water, increased fuel efficiency by 25 percent with an improved fuel cell unit and other changes to its brake system and elsewhere.

Combined with a slightly bigger fuel tank and a doubling of the maximum storage pressure, the FCHV- adv extended the cruising range from the previous FCHV’s 330 km (205 miles), Toyota said in a statement. It has a maximum speed of 155 km per hour (97 mph). Fuel- cell vehicles are widely considered the ultimate longer- term alternative to today’s conventional cars as they run on an inexhaustible and cheaper source of fuel —hydrogen —have no harmful tailpipe emissions and do not compromise driving performance.

The main hurdles for their proliferation are alack of fuelling stations and the high cost of development. Toyota president Katsuaki Watanabe had said previously that it will take years to make eco- friendly cars running on fuel cells commercially viable. Besides the hefty price, motorists would also need an infrastructure of hydrogen filling stations if they are to take the cars on the road.

Toyota and domestic rival Honda Motor Co became the world’s first two automakers to put a fuel- cell vehicle on the road in December 2002, and have since been in a tight race to prepare them for mass- commercialization. Honda’s latest FCX Clarity, a sporty- looking fuel- cell sedan, can run 620 km (385 miles) on a single fuelling as measured under Japan’s fuel efficiency test method. It can go as fast as 160 km per hour (99 mph), uses a lithium- ion battery and can withstand temperatures from -30 to 95 degrees Celsius (- 22F to 203F).

Honda plans to begin leasing the car in the United States starting next month and in Japan later this year. It is targeting lease sales of about 200 FCX Clarity cars in the first three years in the two countries combined. Toyota’s FCHV- adv, which uses a nickel- metal hydride battery, will be showcased as a test- ride vehicle at the Group of 8rich nations’ summit in Toyako, northern Japan, next month. It will also provide more than 70 hybrid cars and hydrogen fuelled buses for use by shuttle participants.

Japanese companies have been working to create a viable zero- emission car running on fuel cells, which produce electricity through a chemical reaction between hydrogen and oxygen, leaving water as the only by- product. Toyota’s system was enhanced to further improve cruising distance and low- temperature starts, which had presented obstacles to widespread fuel cell vehicle use, the company said in a statement.

Toyota engineers managed to control the amount of water produced inside the fuel- cell system, which previously interfered with electrical generation at low temperatures. Fuel efficiency was also improved, the automaker said. Toyota said it would continue to strive to improve the durability and reduce the cost of fuel cell vehicles to bring about their widespread use.

Toyota was a pioneer of petrol- electric hybrid cars which are attracting growing interest at a time of soaring oil prices and increasing concerns about global warming. The International Energy Agency estimated today that nearly a billion electric or fuel cell vehicles may need to be put on the road as part of an energy technology revolution to halve greenhouse gas emissions by 2050.

Insuring your new car

Insurance amount: The amount of insurance is equal to the market value of the vehicle and not the original purchase price or book value of the vehicle.

Renewal: The insurance policy needs to be renewed before expiry of the policy period. Any delay in insurance renewal can deprive you of the insurance benefits and also attract a penalty while renewing. Remember, it is against the law to drive an uninsured car. Moreover, if the insurance policy isn’t renewed within the period of validity, the car will have to be brought to the insurance company office for inspection.

No-claim bonus: No-claim bonus (NCB) clause is basically applicable to holders of comprehensive insurance policy. The clause refers to the discount that a policy holder can receive on the amount of premium payable, if he/she has not lodged any claim during the year.

The policy holder can claim a 20%, 35%, 50% and 65% discount in the premium in the first, second, third and fourth year of holding the policy. NCB cannot be claimed in the 5th year premium. The discount is based upon the claim that he has lodged with the company. Besides this, NCB is important when you are buying another new car because you can transfer this record (clean claim period) to your new vehicle.

Let us work out some numbers on this. Say you have to pay Rs. 5000 as premium of your car. However, as you have a clean record, you would have to pay just Rs 1750, when you enjoy NCB @ 65%. Now, when you buy a new car which has a value higher than the current one, premium is undoubtedly higher. But you get to transfer the bonus percentage onto your new car.

So, if on your new car, the premium that you have to pay is Rs 10,000, because of the NCB, you need to pay only Rs. 3500; that is, you save Rs 6500. But remember that the new car purchase has to be made within three years of sale of the old car.

Insurance Policies

Whenever you buy a car, you need to insure it or get the insurance papers transferred into you name in case it is a second hand car.

There are various insurance players in the market who offer Motor Insurance Policies. Popular among them are the General Insurance Company (GIC) and its four subsidiaries:

New India Assurance Company
Oriental Insurance Company
National Insurance Company
United India Insurance Company

Besides, there are several private insurance players, who have tie-ups with car companies to offer you motor insurance.

So why do you need insurance or your car?

Legally, you need to take motor insurance as soon as you buy a car. Every year, you need to renew the insurance policy by paying the premium.

Basically, there are two types of motor insurance, Policy A or Policy B. While you can satisfy the legal needs by getting the former kind of insurance policy, it is always wiser to go for the latter, as it is much more comprehensive. Policy B is also known as comprehensive insurance policy.

Differences between motor insurance policies

Motor Policy A: This insurance policy covers personal injury and property damage caused by your car. The parties covered under this include:

• Pedestrians, occupants of other vehicles etc. except those within your vehicle,

• Driver of the other vehicle

• The passengers with whom your vehicle is for hire. Here, the owner of the vehicle gets an insurance cover on third party property damage only in case of an accident. In other words, if you are in an accident, the affected party can claim damages from you. The premiums generally are dependent on the cubic capacity of the car.

This cover does not go to fire and theft accidents, for which you need to pay additional premiums.

Motor Policy B: The premiums of this comprehensive insurance’s are much higher than those paid for regular insurance cover. This type of policy covers both third party insurance and own damage liability. Covered under this policy are:

• Loss or damage to the vehicle caused by environment as well as other reasons. That is, accident, fire, explosion, lightning, theft and other malicious acts are covered under this policy.

• Damage to the vehicle while it is under transit.

• Risks due to natural/man-made calamities like floods, earthquake, riots, strikes and terrorism.

Damage to accessories like car stereo, car AC and other items that are not part of the original equipment.

Important clauses of auto insurance policies:

The vehicle insurance cover is not applicable if there is consequential loss, depreciation, wear and tear or mechanical and electrical breakdown. It is also not applicable in the following cases:

• Drunken driving.

• Driver does not hold a driving license.

• More people in the vehicle than the capacity permitted by the RTO.

• Damage incurred in a war zone.

Honda cuts car prices as central sales tax lowered

WHILE most automakers in the country are hiking prices, Honda Siel Cars India said on Sunday it is cutting the rates of its sedans, City and Civic, by up to Rs 5,000 with immediate effect on account of the reduction in central sales tax (CST) by the government.

“We have received notification from the government on the central sales tax cut from three to two per cent announced in the Budget. Hence, we are reducing the prices of our models City and Civic to pass on the benefit to consumers,” aHonda Siel Cars India official said. While mid- sized sedan, City will be cheaper by Rs 3,000, Civic will be cheaper by Rs 5,000.

Before the cut, City was priced at between Rs 6.80 lakh and Rs 8.65 lakh, while Civic cost between Rs 10.91 lakh and Rs 12.41 lakh. The official, however, said the price of the companys sports utility vehicle Honda CRV will remain unchanged.

In fact, CST was proposed to be reduced to two per cent from April 11, but it could not be done due to differences between the Centre and states over acompensation package for states for revenue loss due to the cut. The auto industry has been reeling under increasing input costs. Last month, Maruti Suzuki India Ltd had hiked prices its models.

New cars too cause ecological damage

NEW CARS are not necessarily more fuel- efficient or eco-friendly than the older ones. A recent analysis of data on carbon dioxide (CO2) emissions has found that at a time when oil price hike has put Indian economy at risk, CO2 emission —which depends directly on the amount of fuel burnt — from newer cars on Indian roads, is on the rise.

The trend emerged when the Centre of Science and Environment (CSE) analysed the emission data compiled by the Automotive Research Association of India (ARAI) from vehicles produced in different time periods —1991- 96, 1996- 2000, post- 2000 and post- 2005.

In Delhi, the total CO2 load from vehicles has shown significant increase. Experts say this is due to the unbridled growth in cars and two- wheelers and an increase in travelling distances. They warn that the impact of this trend on the energy sector can be severe. “Older cars can emit more CO2 due to poor maintenance and deterioration. But newer

cars, even those produced after 2000 and 2005, showing higher levels of CO2 emissions than the older vintages is unexpected and disturbing,” said Anumita Roy Chowdhury, in charge of CSEs Right to Clean Air campaign.

The CSE made efforts to obtain official fuel economy data for car models that are recorded at the time of certification of new vehicles. “We were appalled to discover that this information is not available even under the Right to Information Act. At atime when the country is going bankrupt due to crippling crude oil prices, fuel economy data of cars is held as trade secret,” said Roy Chowdhury. She said the Auto Fuel Policy requires “mandatory disclosures” of fuel economy data by auto companies, but the government has failed to implement it.

Cars and two- wheelers are responsible for 60 per cent of the total CO2 emission in Delhi. Between 2002 and 2007, the CO2 emission load from cars has increased by 73 per cent and from two- wheelers by 61 per cent. Buses contribute much less —20 per cent. Since they carry several times more people, the fuel consumption per head is significantly low. CSEs estimate for BRT corridor shows per capita energy consumption can be 8times higher in cars than buses.

Car purchase finance options

Financing a car purchase has become rather easy these days. In recent years, a whole lot of financing options have emerged for the potential car buyer. Here we list a few options.

Loan: One of the more famous ways of buying a car is through a car loan. In this case, the car bought through a loan is actually in the possession of the lending institution. The official term used here is “hypothecation” clause?, which basically means that though you own the car, the bank/lending institution is using the car as a security against the loan taken by you. Thus, once you have cleared all the dues, this clause is removed from the agreement.

The self-employed can get tax relief on the interest paid for the car loan (approximately 15 per cent). Also, depreciation to the tune of 10 per cent per annum can be claimed depending on the price of the car.

Hire purchase: In this format, the lender actually buys the car on your behalf and sells it to you on hire purchase. In other words, you hire the car from the lender and own it once you have settled the dues.

The self-employed can get tax relief on the interest paid for the car loan (approximately 15 per cent). Also, depreciation to the tune of 10 per cent per annum can be claimed depending on the price of the car.

Lease: In this case, the car is owned by the financier and leased out to you for a monthly installment, which includes both principal and interest payment. At the end of the lease period, you become the proud owner of the car and the financier transfers the car in your name.

The self-employed can get tax relief on the interest paid for the car loan. However, no depreciation can be claimed as the car is owned by the financier.

Old car or new?

This is totally dependent on your mentality. And of course, there is a price differential. So, it is better that you identify your needs first and then take a call on the one that suits your purposes.

For instance, if you are someone who is looking for a regular upgrade in say, every two-three years, then a second-hand car makes sense. Moreover, if this is your first car and you are trying to learn driving on it, a second-hand car definitely makes much more sense. On the other hand, if you are someone who is happy using the same vehicle for a number of years, then a new car is definitely recommended.

Of course, there are other important parameters like your negotiating skills and the previous owner. For instance, a Parsi owned car commands higher value as Parsis are known to maintain their cars very well. As a Parsi friend confesses, We do not believe in repair? we replace.? Whereas even the latest model in the hands of a Young Turk (a la Schumacher) would create imageries of burning tyres and engine on an overdrive.

Before buying any car, here are a few things you need to consider:

1. What is your budget for the car?

2. What is your monthly budget for the car?

3. How do you intend to use it? Within the city or even outside the city? (Heavy weight age towards the latter means that you need a MUV or multi-utility vehicle like Tata Sumo, Mahindra Bolero etc.)

4. How long do you intend to keep the vehicle?

Now that you have answered the above, you know whether you want a new or an old car. But before you go for that old car, get yourself a cool car mechanic that is, a trustworthy one who will check the car for you. Ask him to check all the parameters like tyres, suspension, cooling etc.