United States Automobile Insurance – ABC's of Automobile Insurance in the US

Buying United States automobile insurance is a bit different than buying it many other countries. The chief difference is that the formula that the insurance company uses in order to determine the rate you will be charged in America is not generally public knowledge. This means that unless you are willing to shop around for a policy you can't be sure that you have gotten the very best deal that you qualify for.

By shopping around we mean requesting multiple quotes. Requesting more than one quote is the only sure way to find the best possible deal that you currently qualify for. This is because, as we mentioned earlier, every auto insurer uses a different methodology to figure their rates. Some insurers will consider a certain driver riskier than others and charge them accordingly.

In some cases the rate you will be asked to pay will have nothing at all to do with your history as a driver. If the insurer you request a quote from is having financial difficulties, for instance, they may be more likely to charge higher premiums for a policy.

In order to request multiple quotes you should begin by finding a multiple quote web site. These are abundant because when it comer to the United States auto insurance is very big business. A multiple quote web site will ask for all of the information the insurers will need to formulate a quote. It will then forward your information to the insurance companies you wish to receive a quote from.

As the quotes come in you will likely be very surprised at the low prices. This is due to the fact that online consumers are typically given the best rate the insurance companies have to offer. At this point all you will need to do is choose the company that is offering the lowest rate and you will be ready to buy your new United States automobile insurance policy.

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History of Hybrid Cars

In 1905, the application for a patent for a hybrid gasoline and electric motor power train brought the hybrid technology motors into existence. At that time the energy saving features were not the main focal point of this dual power model but, nonetheless, the history of hybrid car technology had been born. This application dealt with supplementing a gasoline power engine to the point that it would have an increase in speed to go from zero to twenty-five miles an hour in ten seconds. Unfortunately, by the time the patent was approved three years later, car speeds had already reached this acceleration speed.

There were quite a few people interested in hybrid technology, and some were long before the application for this particular patent was submitted. There were some inventors that realized the effect that hybrid technology could give electric running automobiles an added speed boost if they were combined with the horsepower that was afforded through the use of gasoline engines. The difference in these speeds jumped an amazing 15 miles per hour. The history of hybrid car products on the highway was just emerging to the forefront of American minds during this time.

There were hybrid trucks being built as early as 1918. Consumers chose speed over gas savings in 1914, when a company developed a hybrid that would offer an astounding 70 miles to each gallon of gas, an amount that is available in some models being offered now in the year 2007. It was the top speed of 30 miles an hour that changed consumers mind to pursue models that were a bit quicker.

The health effects that were caused by internal combustion engines were noted by health officials in the late 1960’s. In 1966, the United States Congress recognized the need to reduce air pollution and recommended bills that led to interest in the production of electric vehicles. The first car manufacturer to jump on the band wagon to perform research and develop these electric cars.

Further development interests led to the production of an advanced battery that would allow the electric vehicles the opportunity to be suitable for highway use. Experimentation was done to enhance the number of charges these batteries could take to prolong their time on the roadways. The concentration on developing hybrid automobiles had reached a worldwide effort by the time the oil embargoes were affecting the prices of fuels around the world.

With the effects of pollution becoming worse in large cities, countries such as Germany and Japan took the production levels of the hybrid car center stage, with developments by Volkswagen and Toyota featuring prototype hybrid taxis and engines. The state of California was the first government to require a certain percentage of sales be automobiles that met the new Zero Emission Vehicle policies. This made the advancement of hybrid automobiles more prevalent in our society. Toyota was the first company to offer hybrid automobiles for sale to the public in December 1997. It was marketed solely to Japanese people.

For hybrid car sales in the United States, Honda was the first to offer a two-seated hybrid car in year 2000 and further expanded the offering of hybrid vehicles to the United States only two months later with a compact car model, the Prius. The classic style of the ever popular gas saving model, Civic, was then offered in hybrid car form in 2002 and received great reviews.

Other automakers followed suit, with Ford offering the Escape Hybrid in 2004. This was also the first hybrid that had a sports utility vehicle feature. The production of the hybrid car will continue, as popularity intensifies, and the American public will relish in the tax saving and economical features that the hybrid automobile brings to the benefit of the American people.

In conclusion, hybrid cars will be the next alternative to fuel vehicle. The trend is spreading, not only in American, but worldwide. Asia countries, such as Japan, Korea and Singapore owners of hybrid cars are enjoying tax relief from switching to hybrid motor. It is inevitable that fuel motor cars model will be going down to history and hybrid cars is making a history.

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Where to Sell Used Cars – Disposing of an Unwanted or Unneeded Automobile

Where to sell used cars is the question you’re asking? You’ve just bought another car, inherited a car or decided to get rid of an extra car so: Where to sell used cars?

Sometimes when you’re buying a new or used car the dealership may not want your old car. There are many reasons for this. Your car may be a model they do not sell. They may not have room for another used car or who knows why they didn’t offer you enough money?

Now you’re faced with disposing of your car.

Again you’re asking: Where to sell used cars?

You could list it in the local paper. They usually offer a better price to you than they will a dealer. You may or may not want to deal with the telephone calls or people coming over to look at it.

You could sell it on ebay. If you will sell the car as a No Reserve auction, it will definitely sell. On eBay lots of good pictures are a must. If you do not know what you are doing you may take less for the car than it is worth. If, however, you do post a lot of good, detailed pictures your car may do very well.

You may still want to list a phone number or at least respond quickly to questions. There are a few things that are must knows about selling on eBay motors. Use a low starting price to get immediate notice. If yours is just a plane jane auto that can be bought on any street corner then eBay may not be the place to sell it.

To sell on eBay lots of good pictures are a must. Using ebay’s photo hosting is expensive. I prefer Photobucket.com’s free service. Make sure to take clean photos of all sides of the car as well as all detail of the interior. Have the car washed and waxed and cleaned inside before taking the photos.

List all the good points about your auto. If it’s never been smoked in that is a good buying cue for those with allergies. Since no used car is perfect, be honest and tell all the bad points. Like the dent on the side from the lady at the grocery store parking lot.

Use paypal to allow a quick deposit and be specific about how long the winner has to come pick the auto up. Usually 10 days is sufficient. Require the buyer to call and discuss the details. I would follow up with an e-mail to make sure and confirm the details in writing.

You could list on AutoTrader or other online and print auto magazines. Autotrader.com has a service where your car ad runs until sold. First, research what others are asking for the same car and see what Edmunds.com says it is worth.

Be realistic and do not expect to sell for hundreds over retail or private party pricing. An overpriced car could set forever and not sell. Remember the car is going down in value everyday. The only exception to this are rare and collectible automobiles.

Advertise Free on Craigslist.Craigslist.com is available for most major metro areas. It is a good free service to put a classified on. Since it’s free a lot of people put their cars there. To get attention again you car needs to be priced right

Give the car away and take a tax deduction. There are many deserving organizations like Goodwill Industries here in Florida. M.A.D.D., Cars for Kids and others who will happily come pick up your used car and use the funds to improve the lives of others. They will give you a receipt to use when doing your taxes.

What should you fix? If your car has a major problem like a blown engine or transmission then you may want to sell for parts to an individual or auto salvage yard. Here it will bring only a fraction of what a similar running auto would bring. If it has a safety problem like bad brakes or inoperable wipers I would fix them before selling the car. Little things like a cigarette lighter not working should be mentioned, but are not that important.

After reading this list you now know where to sell used cars. So lets go sell that extra car and get it out of the driveway. You’ll save money by taking it off your insurance and be a hero with the neighbors.

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The Difference Between Rebuilding and Overhauling an Automobile Engine

There is a vast difference in rebuilding an engine and overhauling it.

When rebuilding an engine it is removed from the vehicle, disassembled, and the motor block is checked for the following:

  • cracks or broken components
  • excessive cylinder wear
  • crankshaft wear
  • condition of connecting rods
  • condition of camshaft, and
  • pistons checked for size and condition of piston ring grooves.

The cylinder head or heads should be taken to an automotive machine shop to have the valves and valve seats properly refaced and any other problems addressed. If the motor has extremely high mileage or has had over-heating problems, then most likely the motor will have to be bored out, the crankshaft re-ground, the connecting rods possibly re-sized and the cam bearings replaced. If the motor needs to be bored, the old pistons will have to be pressed off the connecting rods and the new pistons pressed on. The motor block needs to be cleaned thoroughly and it must be kept clean during the assembly process. Keeping everything as clean as possible during rebuilding will have a positive effect on the life of the motor after it is assembled. Once the block preparation has been done, then the master parts kit, with the proper piston and ring sizes, and rod and main bearing sizes, can be ordered for assembly of the motor. It is always best to replace the old camshaft and lifters with a new camshaft and a set of new lifters.

An overhauled engine is one that has all the accessories removed from the engine including the cylinder head, or heads, and the oil pan. The engine block is not normally removed from the vehicle. New piston rings and rod bearings are installed, with the proper sizes to correspond to the size of the piston and rod journal sizes. It is always a good idea to install a new oil pump also. New gaskets should be used when re-assembling the engine. The assembling of the accessories, when done right, includes cylinder head preparation by a good automotive machine shop. Quality machine work on the cylinder heads assures quality performance from those heads. Most engine re-builders from the automotive machine shops will tell you that re-building of cylinder heads is one of the most critical, if not the most critical operation that can be performed in the re-building of automotive engines. If these guidelines are followed, the overall performance of your completed engine rebuilds will be far superior.

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The Truth About Personal Injury Protection – & Some Myths

Trying to get insurance cover can be a real minefield to most people. It is almost always an unbelievably expensive item with respect to the family budget. Unfortunately however, it can be horrendously costly in another way if the cover is not appropriate or does not cover the intended items. Let’s look at the main kinds of cover and attempt to throw a little light on the subject.

The best automobile insurance policies will include the following items: uninsured motorist coverage, personal property liability, collision coverage, bodily injury liability, comprehensive coverage and personal injury protection (PIP). Some of these elements are required by all states whilst others are not required. Collision coverage pays for all damages to a automobile or other vehicle when it is in collision with another automobile or other vehicle or non-vehicular object, even if the insurance holder is at fault. Comprehensive insurance policies protect the insurance holder in the unfortunate situation that their automobile or other vehicle is taken without the owner’s permission, damaged illegally, harmed by an act of nature or damaged otherwise. Both of these kinds of insurance are always optional and are usually very costly.

Bodily injury and personal property insurance are required by all U.S. states in in one way or another. Where the states differ greatly is in the minimum guaranteed payout that is set for each. For example, in Alaska, a driver is required to carry coverage that has a guaranteed minimum bodily injury payout of $100,000. In Florida, a driver is only required to carry coverage worth $10,000.

Many elements of an auto insurance policy that could be optional are cover for the uninsured motorist and personal injury protection. The coverage for the uninsured motorist protects the insurance holder in case he or she has an accident with an uninsured person. It provides the insurance policies that should possibly have been supplied by the other party. PIP, in the event of an accident, pays for the medical expenses and other assorted damages incurred by the insurance holder and their passengers (or if the insurance holder is an injured pedestrian). Carrying personal injury protection is mandatory in: Colorado, Delaware, Florida, Hawaii, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon and Utah.

Even if personal injury protection is not mandatory in your state, you may still want to consider purchasing the insurance policies. PIP, in the event of an accident, will pay around 80% (depending on insurance policies limits) of the costs of the insurance holder and passengers. These costs include medical bills, lost wages and other assorted expenses. personal injury protection is a no-fault policy, so it will cover you and your passengers, even if the reason for claim was your fault.

personal injury protection, sometimes known as Medical Payment Insurance or Medpay, is a no-fault insurance policies for a couple of reasons. Firstly, the fact that blame does not have to be confirmed saves time and therefore allows medical payments to get into the pockets of the injured parties as soon as possible.

Secondly, it saves everybody from the cost of lawsuits being filed so that responsibility can be proved for an accident and therefore who has responsibility for the bills. One time a personal injury protection policy might allow for a lawsuit is when serious injury or death occurs.

Before you purchase personal injury protection, you would be advised to take a look at your current policies and see whether or not the insurance policies offered by personal injury protection is duplicated elsewhere. It could be that the cost of lost wages and medical bills may be recovered through an existing health insurance policy. If this is the case, then you may need minimal personal injury protection or none at all. Your driving habits will also help determine whether or not you need personal injury protection. Do you carry passengers on a regular basis? While your health insurance might cover your own medical expenses, it won’t cover those of your passengers (unless they are members of your family who are on your health plan). Ask your regular passengers about their own health insurance policies and its coverage. If they are inadequately covered or not covered at all, you need personal injury protection in order to keep them covered. This may seem like the thin end of the wedge, especially if you’re the one driving an office car pool, however, the safety of any passenger riding in your car is always going to be your responsibility.

If you reside in a state that requires personal injury protection you will need to know the minimum amount of cover you must have because this has already been decided for you. If you live in a state where personal injury protection is not mandatory however, you might decide that you need the extra insurance policies anyway. How much insurance policies you need depends, mainly, on your age. If you are middle-aged or older, have good health and liability insurance policies, then you will need minimal personal injury protection insurance policies. If, on the other hand, you are young, just starting out and still don’t have much in the way of health and liability insurance, you will want to protect yourself, your family and your future by carrying as much insurance as you can afford. This is especially true if you have a young family or if you constantly carry others in your automobile or other vehicle.

So there we have it, whether you require PIP and at what level, depends on several factors: where you live, your driving habits, your employment, your health, your personal circumstances and your level of existing cover. Whatever your circumstances however, you need to research it carefully so that you can rest easy knowing that you are safely covered.

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Maserati – The Luxurious Partner

If you are crazy about Maserati then congratulations! You are not alone in the world, there are countless people out there who can die for any of these luxurious beauties. Maserati with vehicles like Maserati Quattroporte, Maserati GranTurismo in their fleet, is among top of line car manufactures in the world. Maserati is originally from Italy. The main theme behind these vehicles is always luxury. Although, through the course of time Maserati has gone through many changes but this factor remain the USP for Maserati always.

Since its inauguration Maserati has been associated with motor sports vehicles, but their non sports car is also very famous among the common household. Whether it is about the sports vehicles or domestic automobiles, the tag line of Maserati has to be the luxury. Maserati Brothers the founders of Maserati automobiles had the dream of making the dream cars that can compete with the best on the race tracks, highways and intra city roads. So far, Maserati has lived up to the expectations of its founder. The moment you hold the keys of your Maserati in your hand, you will yourself feel the comfort and pleasure of driving. It always strives to present the beginning of art vehicles that are prepared with best available parts to ensure a hassle-free experience overall. That is why you see that there are so many loyal fans who cannot appreciate any other automobile at all. You can check more information over the World Wide Web related to Maserati automobiles.

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Selling Automobile Dealerships to Public Companies – Effect of Framework Agreements

A framework agreement provides the basis for the business relationship between a factory and a public company (Public). It includes the terms and standards for a Public’s acquisition and ownership of new car automobile dealerships. Each factory has its own restrictions on a Public’s ability to acquire and operate its dealerships.

Most framework agreements are, by their own terms confidential. However, if one is anticipating selling a dealership to a Public, it would be wise to become familiar with its framework agreement and how it might affect a potential sale.

When I was negotiating the sale Lexus of Stevens Creek, a Public indicated it wanted to purchase the dealership, but it already owned 4 Lexus stores (the maximum allowed nationwide at the time). The Public told the factory it would sell one if it entered into a buy-sell with my dealer; however, the factory told them it had to sell one before it put a deal together.

The relationship between Publics and factories has been an interesting metamorphosis to observe. When Publics first came on the scene the factories kicked and screamed. Lawsuits were filed and the concept of public ownership of automobile dealerships was vigorously opposed by the manufacturers.

Later, the confrontational attitude subsided and the factories embraced the Publics as a way to replace certain dealers and as a means to have new facilities built. The glow came off the relationships when a number of the Publics did not perform the way the factory wanted: poor CSI, broken promises, poor sales performance.

For the factories and the Publics, the drafting of the original framework agreements was like composing pre-nuptial agreements without ever having been married or divorced. As the factories learned from experience, the agreements were massaged and modified.

Several years ago while helping obtain the first factory approval for an Indian Nation to become a dealer, a generic Sales and Service Agreement was not adequate to cover the uniqueness of the tribes and modifications had to be made.

The factory knew how to deal with large dealership groups, both public and private, but how does one transact business with a Sovereign Nation (a Native American tribe) that has immunity from lawsuits and does not have to pay taxes? These were some of the issues that had to be addressed (with the factory, the state dealer association and the selling dealer). In hindsight, similar to the Publics’ framework agreements, some of the anticipated problems were imaginary and some were missed.

Publics are rated daily according to the market value of their stock, which value, when they first began buying dealerships, was affected dramatically by increasing the sales volume of the companies through the acquisition of new dealerships.

Dealers, on the other hand, are rated by how things turn out when the game is over and they sell their stores. Consequently, while it might be good for a Public to sell a hypothetical dealership property to a REIT (Real Estate Investment Trust), it may or may not be wise for a private dealer to sell that same property even if given the same terms, or vice-versa.

Privates and Publics have different rules and different motives and, in my opinion, until recently, some Publics did not think they had to act very much like dealers. With the slow-down in their acquisitions, however, Publics have had to act more like dealers and get the most out of each store. As most dealers would agree, the task of successfully operating an automobile dealership is substantially more difficult than buying one with someone else’s money.

In the long-run I believe framework agreements are good because they keep the Publics from controlling too great a percentage of the distribution channels of manufacturers, while simultaneously forcing them to operate more like car dealers.

Although framework agreements are redefined at times, at one time or another the following factories had the following requirements:

TOYOTA/LEXUS

1. Had a limit on the number of Toyota and Lexus dealerships that a Public may own: (a) on a national level; (b) in each Toyota-defined geographic region or distributor area; and (c) in each Toyota or Lexus-defined metropolitan market.

2. Prohibited ownership of contiguous dealerships in the same market.

3. Nationally, the limitations on dealerships owned were for specific time periods and based on certain percentages of total Toyota unit sales in the United States.

4. In geographic regions or distributor areas, the limitations on dealerships owned by Publics were specified by the applicable Toyota regional limitations policy or distributor’s policy in effect at such time.

5. In metropolitan markets, the limitations on dealerships owned by Publics were based on Toyota’s metro markets limitation policy then in effect, which provided a limitation based on the total number of Toyota dealerships in the particular market.

With respect to Lexus, a Public could own no more than one Lexus dealership in any one Lexus-defined metropolitan market and no more than five Lexus dealerships nationally.

HONDA

1. Honda limited the number of Honda and Acura dealerships a Public could own (a) on a national level; (b) in each Honda and Acura-defined geographic zone; and (c) in each Honda-defined metropolitan market.

2. Nationally, the limitations on Honda dealerships owned by Publics were based on specified percentages of total Honda unit sales in the United States.

3. In Honda-defined geographic zones, the limitations on Honda dealerships owned by Publics were based on specified percentages of total Honda unit sales in each of 10 Honda-defined geographic zones.

4. In Honda-defined metropolitan markets, the limitations on Honda dealerships owned by Publics were specified numbers of dealerships in each market, which numerical limits varied based mainly on the total number of Honda dealerships in a particular market.

5. With respect to Acura, Publics could own no more than (a) two Acura dealerships in a Honda-defined metropolitan market, (b) three Acura dealerships in any one of six Honda-defined geographic zones and (c) five Acura dealerships nationally.

6. Honda also prohibited ownership of contiguous dealerships.

MERCEDES-BENZ

Mercedes restricted any company from owning Mercedes dealerships with sales of more than 3% of total sales of Mercedes vehicles in the U.S. during the previous calendar year.

FORD MOTOR COMPANY

1. 80% of the Public’s Ford dealerships had to meet Ford’s performance criteria.

2. Could not make an acquisition that would result in owning Ford or Lincoln Mercury dealerships with sales exceeding 5% of the total Ford or total Lincoln Mercury retail sales of new vehicles in the United States for the preceding calendar year.

3. Could not acquire additional Ford or Lincoln Mercury dealerships in a particular state if such an acquisition would result in the public company owning Ford or Lincoln Mercury dealerships with sales exceeding 5% of the total Ford or total Lincoln Mercury retail sales of new vehicles in that state for the preceding calendar year.

4. Could not acquire additional Ford dealerships in a Ford-defined market area if such an acquisition would result in the Public owning more than one Ford dealership in a market having a total of three or less Ford dealerships or owning more than 25% of the Ford dealerships in a market having a total of four or more Ford dealerships. An identical market area restriction applies for Lincoln Mercury dealerships.

5. The factory could impose conditions, such as requiring facilities improvements at the acquired dealership.

GENERAL MOTORS

General Motors limited the maximum number of General Motors dealerships that a Public could acquire to 50% of the General Motors dealerships, by brand line, in a General Motors-defined geographic market area having multiple General Motors dealers.

SUBARU

Subaru limited Publics to (a) no more than two Subaru dealerships within certain designated market areas; (b) four Subaru dealerships within its Mid-America region; and (c) 12 dealerships within Subaru’s entire area of distribution.

BMW

BMW prohibited publicly held companies from owning BMW dealerships representing (a) more than 10% of all BMW sales in the U.S. or (b) more than 50% of BMW dealerships in a given metropolitan market.

Other manufacturers may impose different restrictions and conditions which may or may not be more stringent.

As a condition to granting their consent to acquisitions, a number of manufacturers required additional restrictions or conditions, such as prohibiting:

1. Material changes in the Public, or extraordinary corporate transactions such as a merger, sale of a material amount of assets or change in the Public’s board of directors or management that could have a material adverse effect on the manufacturer’s image or reputation or could be materially incompatible with the manufacturer’s interests.

2. The removal of a dealership general manager without the consent of the manufacturer.

3. Dualing with another brand without the factory’s consent.

If a buyer cannot comply with the restrictions of its framework agreement with the factory, it will not be approved. Consequently, if one intends to sell a dealership to a Public it would be wise to know the requirements to of its framework agreement before investing a substantial amount of time and energy into negotiating with the Public.

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Automobile Sector – The Indian Scenario!

Introduction:

During early 60s & 70s, automobiles came largely in twos.

In scooters, you had a Lambretta or a Vespa.

In motorcycles, you had a Bullet or a Java.

In cars, you had to choose between an Ambassador and a Fiat.

In trucks, it was either an Ashok Leyland or a Tata.

In tractors, it was between a Swaraj and a Mahindra.

This situation reflected the India of yester years. Economic reforms and deregulation have transformed that scene. Automobile industry has written a new inspirational tale. It is a tale of exciting multiplicity, unparalleled growth and amusing consumer experience – all within a few years. India has already become one of the fastest growing automobile markets in the world. This is a tribute to leaders and managers in the industry and, equally to policy planners. The automobile industry has the opportunity to go beyond this remarkable achievement. It is standing on the doorsteps of a quantum leap.

The Indian automobile industry is going through a technological change where each firm is engaged in changing its processes and technologies to maintain the competitive advantage and provide customers with the optimized products and services. Starting from the two wheelers, trucks, and tractors to the multi utility vehicles, commercial vehicles and the luxury vehicles, the Indian automobile industry has achieved splendid achievement in the recent years.

"The opportunity is staring in your face. It comes only once. If you miss it, you will not get it again"

On the canvas of the Indian economy, auto industry maintains a high-flying place. Due to its deep frontward and rearward linkages with several key segments of the economy, automobile industry has a strong multiplier effect and is capable of being the driver of economic growth. A sound transportation system plays an essential role in the country's rapid economic and industrial development. The well-developed Indian automotive industry skillfully fulfils this catalytic role by producing a wide variety of vehicles: passenger cars, light, medium and heavy commercial vehicles, multi-utility vehicles such as jeeps, scooters, motorcycles, mopeds, three wheelsers, tractors etc .

The automotive sector is one of the core industries of the Indian economy, whose prospect is reflective of the economic resilience of the country. Continuous economic liberalization over the years by the government of India has resulted in making India as one of the prime business destination for many global automotive players. The automotive sector in India is growing at around 18 per cent per annum.

"The auto industry is just a multiplier, a driver for employment, for investment, for technology"
The Indian automotive industry started its new journey from 1991 with delicensing of the sector and subsequent opening up for 100 per cent FDI through automatic route. Since then almost all the global majors have set up their facilities in India taking the production of vehicle from 2 million in 1991 to 9.7 million in 2006 (nearly 7 per cent of global automobiles production and 2.4 per cent of four wheeler production).

The cumulative annual growth rate of production of the automotive industry from the year 2000-2001 to 2005-2006 was 17 per cent. The cumulative annual growth rate of exports during the period 2000-01 to 2005-06 was 32.92 per cent. The production of the automotive industry is expected to achieve a growth rate of over 20 per cent in 2006-07 and about 15 per cent in 2007-08. The export during the same period is expected to grow over 20 per cent.

The automobile sector has been contributing its share to the shining economic performance of India in the recent years. With the Indian middle class earning higher per capita income, more people are ready to own private vehicles including cars and two-wheelers. Product movements and manned services have boosted in the sales of medium and sized commercial vehicles for passenger and goods transport.

Side by side with fresh vehicle sales growth, the automotive components sector has witnessed big growth. The domestic auto components consumption has crossed rupees 9000 crore and an export of one half size of this figure.

Eye-Catching FDI Destination – INDIA!

India is on the peak of the Foreign Direct Investment wave. FDI flows into India trebled from $ 6 billion in 2004-05 to $ 19 billion in 2006-07 and are expected to quadruple to $ 25 billion in 2007-08. By AT Kearney's FDI Confidence Index 2006, India is the second most attractive FDI destination after China, pushing the US to the third position. It is commonly believed that soon India will catch up with China. This may also happen as China attempts to cool the economy and its protectionism measures that are eclipsing the Middle Kingdom's attractiveness. With rising wages and high land prices in the eastern regions, China may be losing its edge as a low-cost manufacturing hub. India seems to be the natural choice.

India is up-and-coming a significant manufacturer, especially of electrical and electronic equipment, automobiles and auto-parts. During 2000-2005 of the total FDI inflow, electrical and electronic (including computer software) and automobile accounted for 13.7 per cent and 8.4 per cent respectively.

In services sectors, the lead players are the US, Singapore and the UK. During 2000-2005, the total investment from these three countries accounted for about 40 per cent of the FDI in the services sector. In automobiles, the key player is Japan. During 2000-2005, Japan accounted for about 41 per cent of the total FDI in automobile, surpassing all its competitors by a big margin.
India's vast domestic market and the large pool of technically skilled manpower were the magnetism for the foreign investors. Hitherto, known for knowledge-based industries, India is emerging a powerhouse of conventional manufacturing too. The manufacturing sector in the Index for Industrial Production has grown at an annual rate of over 9 per cent over the last three years.
Korean auto-makers think India is a better destination than China. Though China provides a bigger market for automobiles, India offers a potential for higher growth. Clearly, manufacturing and service-led growth and the increasing consumerization makes India one of the most important destinations for FDI.

Automotive Mission Plan 2016

The bumper-to-bumper traffic of global automobile biggies on the passage to India has finally made government sit up and take notice. In a bid to drive greater investments into the sector, ministry of heavy industries has decided to put together a 10-year mission plan to make India a global hub for automotive industry.

"The ten year mission plan will also set the roadmap for budgetary fiscal incentives"
The Government of India is drawing up an Automotive Mission Plan 2016 that aims to make India a global automotive hub. The idea is to draw an innovative plan of action with full participation of the citizens and to implement it in mission mode to meet the challenges coming in the way of growth of industry. Through this Automotive Mission Plan, Government also wants to provide a level playing field to the players in the sector and to lay a predictable future direction of growth to enable the manufacturers in making a more informed investment decision.

Major players in the automobile sector are:

o Tata

o Mahindra

o Ashok Leyland

o Bajaj

o Hero Honda

o Daimler Chrysler

o Suzuki

o Ford

o Fiat

o Hyundai

o General Motors

o Volvo

o Yamaha

o Mazda

Foreign Companies in the Indian auto-sector

Until the mid-1990s, automobile industry in India consisted of just a handful of local companies with small capacities and obsolete technologies. Nevertheless, after the sector was thrown open to foreign direct investment in 1996, some of the global majors moved in and, by 2002, Hyundai, Honda, Toyota, General Motors, Ford and Mitsubishi set up their manufacturing bases.

Over the past four to five years, the country has seen the launch of several domestic and foreign models of passenger cars, multi-utility vehicles (MUVs), commercial vehicles and two-wheelers and a robust growth in the production of all kinds of vehicles . Moreover, owing to its low-cost, high-quality manufacturing, India has also emerged as a significant outsourcing hub for auto components and auto engineering design, rivaling Thailand. German auto-maker Volkswagen AG, too, is looking to enter India.

India is expected to be the small car hub for Japanese major Toyota. The car, a hot hatch like the Swift or Getz is likely to be exported to markets like Brazil and other Asian countries. This global car is crucial for Toyota, which is looking to improve its sales in the BRIC (Brazil, Russia, India, China) markets.

Two multi-national car majors – Suzuki Motor Corporation of Japan and Hyundai Motor Company of Korea – have indicated that their manufacturing facilities will be used as a global source for small cars. The spurt in in-house product development skills and the uniquely high concentration of small cars will influence the country's ability to become a sourcing hub for sub-compact cars.

A heartening feature of the changing automobile scene in India over the past five years is the newfound success and confidence of domestic manufacturers. They are no longer afraid of competition from the international auto majors.

For instance, today, Tata Motor's Indigo leads the popular customer category, while its Indica is neck-to-neck with Hyundai's Santro in the race for the top-slot in the B category. Meanwhile M & M's Scorpio has beaten back the challenge from Toyota's Qualis to lead the SUV segment.
Similarly, a few Indian winners have emerged in the motorbike market – the 150 and 180 cc Pulsar from Bajaj and 110 cc Victor from the TVS stable. The 93 cc Bike from Bajaj and 110 cc Freedom bike from LML have also emerged as winners.

Evidently, Indian players have learnt from past mistakes and developed the skills to build cheaper automobiles using `appropriate 'technologies. TVS, for instance, paid an overseas source $ 100,000 to fine-tune home-grown engines rather than $ 1.5 million to import the entire engine. Similarly, M&M adapted available systems and off-the-shelf components from global suppliers to keep costs down and go for aggressive pricing. True, Indian players are still lacking in scale of operation. While economies of scale no doubt play an important role in the auto sector, a few Indian manufacturers relied on innovation rather than scale of operation for competitive advantage. For instance, Sundram Fasteners was able to achieve the feat of directly supplying radiator caps to General Motors purely on the strength of innovation in product quality. The domestic tooling industry bagged the order for the Toyota Kirloskar transmission plant in the face of stiff competition from multinational corporations. The cost of the entire job turned out to be only a fraction of the original estimate.

As the automobile industry has matured over the past decade, the auto components industry has also grown at a rapid pace and is fast achieving global competitiveness both in terms of cost and quality.

In fact, the industry will believe that while the automobile market will grow at a measured pace, the components industry is poised for a take-off. For it is among the handful of industries where India has a distinct competitive advantage. International automobile majors, such as Hyundai, Ford, Toyota and GM, which set up their bases in India in the 1990s, persuaded some of their overseas component suppliers to set up manufacturing facilities in India.

Consequently, the value of cumulative output of the auto components industry rose rapidly to Rs 30,640 crore at end-2003-04 from just Rs 11,475 crore in 1996-97. Foreign companies such as Delphi, which followed General Motors in 1995, and Visteon, that followed Ford Motors in 1998, soon realized the substantial cost advantage of manufacturing components in India.

Finding the cost lower by about 30 per cent, they began exploring the possibility of exporting back these low-cost, high-quality components to their global factories and, thus, reducing their overall costs. Not surprisingly, the industry's exports registered a more than four-fold jump to Rs 4,800 crore in 2003-04 from just Rs 1,033 crore in 1996-97.

Automobile majors such as Maruti Udyog, Toyota, Hyundai have now finalized their plans to invest in some of the critical auto components. According to the Automotive Component Manufacturers Association of India (ACMA) officials, auto component manufacturers are expected to invest about Rs 10,000 crore over the next five years at the rate of Rs 2,000 crore per annum.

According to analysts, the auto component industry could emerge as the next success story after software, pharmaceuticals, BPO and textiles. The size of the global auto component industry is estimated at $ 1 trillion and is set to grow further. Against this backdrop, McKinsey's latest report has estimated that the sector has the potential of increasing its exports to $ 25 billion by 2015 from $ 1.1 billion in 2004.

Threat to the Dream!

India's expedition to become a global auto manufacturing hub could be seriously challenged by its inability to uphold its low-cost production base. A survey conducted by the research, KMPMG firm reveals that the Indian auto component manufacturers are increasingly becoming skeptical about sustaining the low-cost base as overheads including labor costs and complex tax regime are constantly rising.

The survey said many executives believe that India's cost advantage is grinding down fast as labor costs are constantly increasing and retaining employees is becoming more and more difficult. Increased presence of global automotive companies in the country was cited as one of the reasons for the high erosion rate.

Indian auto businesses will only flourish if they boost investments in automation. In the longer term, cost advantage will only be retained if Indian capital can be used to develop low-cost automation in manufacturing. This is the way to preserve our low cost.

Global auto majors are also cynical about India's low cost manufacturing base. India taxation remains a big disadvantage. This is not about tax rates it is just about unnecessary complexity. But some companies also believe there is scope for reducing the cost of doing business.

In spite of this there are opportunities to exploit lower costs right across the board. It's true that labor costs are definitely increasing but they are still five per cent of the total operational costs. The labor costs can be further reduced if companies are successful in bringing down other costs like reducing power costs. Low-cost base can never last long. The company said Indian industry has till now relied on very labor intensive model but it would have to switch to a more capital intensive model now.

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5 Connectivity Trends That Will Shape the Future of the Automotive Industry

Innovation is already behind the wheel of the modern automobiles. Yes, smart connectivity is now shaping the automotive sector in a never before way. While some of these technologies are already on the verge of becoming mainstream, there are other technologies that are just on their nascent state and are on the making. Most automotive management services predict that together these technologies will shape the future of the connected automobiles of the future.

Here are the 5 trends that will shape the future of the connectivity in automotive industry.

1. Self-driving cars

Self-driving cars that can run on the road without the intervention of the driver behind the wheel is already a reality with several automakers having come with their respective models of such cars. Already out through several successful test-runs Driverless cars truly holds the future of the automobile in the world. But according to expertise of leading automotive management services, driverless cars in spite of being already a reality, still a decade or so is required for such cars to become public and hit the road as regular vehicles.

2. AI-powered car infotainment systems

The infotainment systems of the modern cars are increasingly getting powerful and responsive and already they are all apt to respond to most regular commands including voice commands. The AI-powered virtual assistants will rule the future car infotainment systems of the cars to respond to passengers and driver in more responsive ways. AI is supposed to be introduced in the car infotainment systems of the future cars in just one or two years from now.

3. Blockchain-Powered Maintenance and Repair

We all are aware how the counterfeit car parts cause performance failure and in the long run damage vehicles. But as of now, in many countries to prevent such counterfeit parts entering the market there is no trusted system in place. In this respect, Blockchain based maintenance and repair mechanism can really play a revolutionary role in authenticating car parts. Blockchain which as a distributed ledger system allows no deletion or tampering of data while offering open and widespread access to data can actually help to authenticate car parts through an easily accessible distributed ledger of car parts.

4. Vehicle-to-Vehicle Connectivity

Vehicle to Vehicle connectivity commonly referred to as V2V technology allows cars on the road sharing information and keeping in touch with each other. On the road, a car can share information concerning speed, traffic, road conditions, any dangerous threats, etc. Automotive management services maintains that such V2V communication not only dramatically improves car safety and security it also actively helps cars avoiding routes that may take longer to reach the destination because of the heavy traffic. Already some cars are having a better in-car communication system and there are already highly equipped fleet management systems in place. All these together will shape the fully equipped Vehicle to Vehicle connectivity system of the future.

5. AR powered maintenance

Augmented Reality technology which already penetrated many industries and niches because of the unique capability of integrating the digital interaction to the real world around. Just like finding the digital game character of Pokemon in a popular AR game like Pokemon Go in an AR powered vehicle repair and maintenance environment the servicemen can render their services with guidance from a digital interface showing each and every part of the car.

A service engineer being able to see the entire car starting from the car seats to the interior features to the engine and bonnet can easily have a guided experience in repairing the entire car. This will help the car industry saving huge on maintenance and services. For customers also, this will ensure more precision, timely service and longer durability of the vehicle.

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Antique Ohio Electric Car

Electrically operated automobiles are amongst the earliest vehicles, and are more energy efficient than all the conventional vehicles that use ICE (internal combustion engine) technology. Fortunately, for us the electric car doesn’t produce any exhaust fumes, and causes minimal or no pollution even if it charges from most renewable forms of energy. Besides this, these ‘green’ or ‘hybrid’ cars are capable of reducing our dependence on traditional fuels, while helping to mitigate global warming by providing relief from the greenhouse effect.

Electric cars are among the earliest automobiles, more so since electric vehicles predate petroleum and diesel cars. It’s believed that a Scottish businessman, Robert Anderson invented the first proto type electric coach somewhere around 1832-1839. However, it was the year 1835, that Professor Sibrandus Stratingh of Groningen, Netherlands, helped his assistant Christopher Becker design and build the first small electric car.

The antique Ohio electric car is a vintage car now. The Ohio Electric Car Company produced electric cars, which were mainly bought by rich customers during the late 1800s and early part of 1900s. Electric vehicles were also produced by Edison, Anthony, Bakers and others during the early 1900s and even out-sold the conventional vehicles for some time! But due to technological limitations, besides other factors, these vehicles were limited to a maximum speed of 32 km/hr.

However, in 1913, Cadillac introduced the electric starter car, the sales of electric cars experienced a down slide and soon antique Ohio electric cars became just that, antiques. Now, electric cars are more popular than they have ever been with the fear of global warming and the increasing cost of gas.

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