Almost all automotive brands have promised us that they'll stop making cars run on petrol and diesel and they will shift towards free electric cars. Amongst them are some car makers who have become too extreme about electric cars. For example, Jaguar said it would become a company to make fully electric cars by 2025. Alpha Romeo has promised to become fully electric by 2027. Chrysler gave us time till 2028, and Mercedes and Rolls Royce gave us time till 2030. Audi has promised to be a fully electric car maker by 2033. 

From America to Europe, China to Korea, all car makers are completely committed to EVs, except for Japanese car makers. Where we see a lot of electric cars made by luxury car companies like Audi, but Toyota, the biggest car maker in the world, has only one electric car named bZ4X, I am sure you might not have heard this name.

The second biggest Japanese car company, Honda, has a similar stand. They too have only three electric cars, they come under their NS series which are sold only in China and Europe. Similarly, Nissan has only a couple of electric cars, and Mitsubishi and Suzuki don't even have one electric car. Suzuki doesn't even have a plugged hybrid model.

Why are Japanese car manufacturers showing resistance towards the adoption of electric vehicles, especially at a time when the automotive industry as a whole is transitioning towards electric cars?

Comparison of Kodak and Electric Car Production

The way Japanese car makers are functioning reminds me of Kodak. You must have remembered Kodak, one of the biggest camera makers in the World. Still, when the demand for digital cameras rose instead of accepting this change, Kodak focussed on real cameras so they are almost extinct today's date. So the question here is like Kodak, the slow transition of Japanese companies will this be the end for them? Or, they have some secret plan we don't know about. So, now that I was given Kodak's example, if we talk about it, there is a difference between Kodak and the Japanese brands. And, it's because Kodak has never changed their technology while Japanese car makers became one of the first in the world who started making mass-produced electric car makers. 

Yes, Honda launched the Honda EV Plus electric car in 1997. Toyota launched the Rav4 in 1994, which hit the European market and next the American market. But something happened, which led these Japanese car companies to completely quit making electric cars. While these Japanese car companies launching their electric cars, GM has launched its mass-produced electric car EV1. This car was the first electric car which was a great success considering first-generation electric cars. But, obviously, this success was nothing compared to petrol or diesel cars. 

Well, whatever, this story took a 180° turn when GM sold the rights of NiMH battery to an oil company, and that oil company was later bought by a big oil company named Chevron. Actually, big oil companies like Chevron were interested in batteries because if they had the battery patents, they could stop anyone from making electric cars.

By this, the cars running on fossil fuels increase and also oil companies can make more profits. And this is what happened. Chevron, who became the owner of the battery patent, filed a case against Toyota because, as I said before, Toyota was making EVs, and the batteries they used those we based on the same technology, the rights of which were with Chevron. Now Toyota has faced these lawsuits but they also filed cases against Panasonic and other battery makers because they were providing components for the EV makers or they were giving them batteries altogether. 

Toyota's Dominance and Stance on Electric Cars

Situations turned so bad that America had to crush the unsold EV lots. And because of this, both the Japanese automakers stopped making EVs. But they didn't leave the electric batteries behind. They used this battery technology to promote hybrid cars, where they use both petrol and electricity to run the car. And because they also used petrol, Chevron hadn't had a problem with them. Toyota has launched its first mass-produced hybrid car; Prius. And right from the beginning, their sales went up. Every other guy bought a Prius, who wanted a highly efficient car. 

Today, the legacy of the Prius is so big for Toyota that out of all the hybrid cars that are sold in America today, 60% of them are sold by Toyota. Due to their hybrid car sales success, Toyota became so bullish and they have completely stopped making EVs, like I told you earlier. But as time passed by, Toyota's stance on electric cars became very negative. So much so they have refused to believe electric cars as the future of technology.

Challenges and Considerations in Toyota's Position on Electric Vehicles

Now, Toyota's view might sound one-sided because their obvious success in hybrids is so huge. But if we study this secret document then we understand they have a good point. Toyota has circulated this document to their dealers and they wanted the general public to read this document. So, despite being a secret, this document is on the internet. Toyota gave some reasons for this internal document for not supporting EVS. Like, there are some dealing hassles with EVs, for example, out of all the charging infrastructure, only 12% of them can help your car fully charge from 20 to 60 minutes. And other charging stations consume hours of your time. 

Apart from this, if you want to completely rely on the EVs then, only in America, do you need to install 12,00,000 charging stations, within the next 5 to 6 years. Also, they raised questions about the affordability of the EVs. They believe that costs cannot be justified unless an EV becomes as affordable as a petrol car. Now, we all know all this stuff. But Toyota has mentioned the 1:6:90 rule, and this particular piece of information sounded really concerning. The resources required to make these EV batters are completely rare elements. We are running out of these elements and once they are exhausted, we cannot reproduce them. This 1:6:90 rule tells us that with the rare elements and raw materials used in 1 electric car, you can make 6 plugin hybrids and 90 hybrid cars out of those.

Think about it, 90 hybrid cars can be made out of 1 electric car environment. Apart from this, this document also says that by the year 2030, 300 new Cobalt, Nickel, and Graphite mines if we want to go completely electric in terms of cars. 

Challenges and Controversies Surrounding Electric Vehicles in Japan

After reviewing Toyota's document, it is mentioned that electric vehicles (EVs) may not be sustainable in the long term due to the rare elements they use. However, the document also suggests that if alternative arrangements are made to manufacture EV batteries without these rare elements, sustainability could be achieved. Otherwise, it is implied that sustainability may not be possible as per the Toyota document. This could be a possible reason why the Japanese government is not as supportive of EVs as other countries. 

On one end, Chinese, Indian, American, and European governments are offering subsidies for electric cars. On the other end, Japan has more subsidies for fuel cell cars rather than electric cars. Though the Japanese government promised to become fully electric by 2035, they have included hybrids within this 100%. And Japanese government believes hybrids to be the future technology and they have no plans to ban hybrids, unlike the US and UK governments. Now that we know Japanese car companies and their government are not positive about EVs, so, they have become targets for international environmental organizations. An organization named Greenpeace published a report, some time ago. They ranked Toyota, Nissan, and Honda worst out of the top 10 global auto companies for their decarbonization efforts. On top of that, they ranked Toyota as the worst in terms of decarbonization. In simple language, according to them aren't putting enough effort into saving the environment.

The Shift to Electric Vehicles: Impact on Japan's Economy

According to The Climate Group report, there is a high probability that Japan's GDP could decline if the country does not adopt electric vehicles (EVs). This is because 89% of Japan's GDP comes from manufacturing, with the automobile sector playing a significant role. Japan generates a large portion of its revenue by exporting cars worldwide. If other countries decide to ban hybrid and internal combustion engine (ICE) cars, Japan could suffer significant losses. Several countries, including Britain, Israel, and Singapore, have already announced plans to ban internal combustion engines by 2030. If such bans are implemented, Japan may face challenges in selling their hybrid cars, as a large portion of their revenue comes from exports.

In response to these challenges, Japan has started shifting its focus towards EVs, although they currently do not produce notable electric cars. However, they have made announcements indicating their plans for the future. For instance, Toyota has announced that they will launch six new EV models by 2026, and Nissan, known for fully electric cars like the Leaf and Ariya, has pledged to sell 100% electric cars in Europe by 2030.

Japanese Automakers Driving Towards Electric Vehicles

Honda introduced their new EV lineup, where they introduced their Honda 0, is a complete electric car series. they will start producing them in 2026. Apart from this, Mitsubishi, the company with no electric cars, also said they are willing to launch 4 new electric cars which will help their goal of 100% EV by 2025. Talking about Suzuki, I don't know much but they are going to launch eVX, a fully electric car in India. So, knowing all this we can figure out that, though it's by force, Japanese automakers must have to bring electric cars to the market. Or else they will not sustain. 

After reading this article, you must understand that Japanese car manufacturers have a more favorable opinion of hydrogen fuel, flex fuel, and other hybrid technologies than electric vehicles. Please share your thoughts on this.

 Both small and big car companies make sports cars that reach many people. Some companies make supercars only millionaires can afford them and there are only a few companies that make hypercars, not IT startup founders only rich people with oil wells can afford them. Many companies make fast cars but I haven't made a dedicated article on them. Even if it's Porsche or McLaren. But there is one company that forced me to make this and that's the company, Koenigsegg by Christian von Koenigsegg.

This is a company that broke all speed records of any production cars and that has been troubling even Bugatti that's batched by Volkswagen VW. This company with 500 employees did so many innovations within 3 to 4 years that not even Lamborghini could make in its whole run-time. A car from this company was priced at a price of a ton of Ferrari. In this article, we'll understand Koenigsegg's history the speed record efforts of their cars their hypercar records, and their innovations. So, stay attentive till the end.

Koenigsegg Founder's Childhood: Christian E.H. von Koenigsegg

Christian Erland Harald Von Koenigsegg was born on 2nd July 1972 in Stockholm, Sweden. And just after five years, the petrohead within him roses. Actually, at 5 years of age, Christian Von Koenigsegg went to watch a Norwegian animated movie, Flåklypa Grand Prix along with his father. In the movie, a boy makes a sports car out of scrap and wins the F1 race. Though it was an imaginary story, this made an impression on Koenigsegg. He decided to start a sports car company. He didn't think, he started making these in his childhood. Like, he made a go-cart at a very young age with his father's help. To keep his love for cars alive, he started selling mopeds at 15.

How did a chicken businessman shift to manufacturing luxury supercars? 

But we know this car business is very capital-intensive. Because of this when Mr. Koenigsegg wanted to start a car company, he needed a lot of capital. To arrange the capital, he started a frozen chicken business, where he buys frozen chicken and sells it to buyers at a profit. He could make an early success and he became a huge frozen chicken businessman in Sweden. And he made so much money by selling frozen chicken that now he can make his childhood dream into a reality. His dream was to start a car company. A Swedish automotive company.

Pursuing Automotive Excellence: His Dream Unfolds

In the year 1994, he opened a car company called Koenigsegg. Now, Mr. Koenigsegg wasn't an engineer, so hired a team of engineers, and within 2 years, in 1996 he launched his prototype called Koenigsegg CC. This looked so awesome it gave other supercars a run for their money, just by the look of it. Just two years after their prototype, their first production model hit the market, by the name of CC8S. Which was made between 2001 to 2003 and only 6 units of this car were made. Right from the very first car, their intent was clear to make the fastest car in the World. Because CC8C, with its 655hp engine, can go up to 390 km/h top speed. 

Now, you may understand that the speed they claimed in 2003, is so fast that many sports car companies couldn't achieve this kind of speed in their production of sports cars, not Lamborghini, Porsche, or Ferrari. Yes, Ferrari made two cars faster than Koenigsegg but they both weren't road-legal and were made for racing championships. Something even more interesting is that the Koenigsegg, in its CC8S, used a supercharged Ford Engine. And Ford is a company that doesn't make a car similar to Ferrari. After CC8S, comes Koenigsegg CCR, and this time, instead of using a Ford Engine, Koenigsegg made their block based on this engine. They did this to achieve their claimed 395 mph speed. 

What is the Guinness World Record for the fastest production of a hypercar?

If you notice, this is just a little more compared to their previous car. Then, why did they put so much effort into this? They did this to break the high-speed record set by my McLaren F1 in the 90s. From making Carbon material in their car so that it can be lightweight. And they did it on February 28, 2005, with their CCR and by doing this they made it into the Guinness Book of World Records for the fastest production car. But this record was broken by Bugatti in November 2005, and the car claimed this record under its name for a long time. Now that Bugatti is their rival, they needed even more faster cars. 

Crafting Power: Knowingness's Engine Innovation

They made CCX for Koenigsegg produced CCX from 2006 until 2010, and they made 29 cars in different series. For the first time, with this series, they could break the 400 km milestone. The first three models of CCX went up to 400 Kmph top speed but their Trevita broke this record with 410 Kmph of claimed top speed. But it was really hard to achieve this with a Ford-inspired engine block, and because of this, for the first time, they made a 4.7-liter twin supercharged V8 engine, which could produce 795 to 1004 hp in their later models.

Whose engines power which cars? Uncover the automotive collaborations.

If you think about it, it's a huge thing to make a performance engine of their own, especially for such a small company. And you can understand how hard it is when you compare it with similar-sized companies. Like, Pagani from Italy did not make their engine and they used Mercedes-AMG engines. Apollo, a super-niche hypercar company uses Audi Engines in their cars, many Maserati cars use Ferrari engines, and many Aston Martin cars are found using Mercedes engines, and similarly, Lamborghini Urus the engine is made by Audi. All these show how difficult it is to develop a performance engine.

Agera

But still, Koenigsegg made their engine and it was just the beginning. Agera came in 2010, and Koenigsegg fitted this with a 5-liter V8 engine this engine was so versatile that Koenigsegg produced it from 2010 to 2018 and they used this engine in special editions of Agera. Throughout this period, the power and the speed of these engines leveled up. In Agera, this engine produces 947hp with a top speed of 420 mph. 

Successor cars of Agera

This power and speed stopped at Agera RS with 1341 hp and 457.94 mph top speed. This speed was so high that this car, in its test, broke the Bugatti's previous record. But this is not the speed record of Koenigsegg because Agera is followed by Regera, was a successor to Agera, followed by Jesko and Gamera and, with Jesko, Koenigsegg broke all the top speed limits because this car of theirs can reach 310mph claimed speed; it means a speed of 500kmph. Imagine how would it feel to go at 500kmph.

Koenigsegg: What groundbreaking innovations are every 5 years till now?

Now, Koenigsegg had made over-engineered, powerful, high-speed cars, but along with this, this small company makes so many innovations every 5 years that not even big sports car companies like Lambhorgini might not have done in their whole lifetime.

Hydracoup: Regera

Like, Koenigsegg, in their Regera, an 1800hp hybrid hypercar installed a single-speed direct drive system. I mean, this car doesn't come with a conventional gear system this car runs on a single-gear ratio and this goes from 0 to 400 on a single gear. Koenigsegg invented their own highly rigid, over-engineered torque-converted system and called it hydracoup to make this possible. Apart from this, their battery pack is a work of art on its own. Because this can discharge ten times faster than a normal electric car. It can dump its power so its high-powered motors can work faster. And its regeneration is also ten times faster than any other car. Apart from this, the battery pack weight of this car is only 64kgs which is comparatively very light because a less powerful car, the McLaren P1 has a battery pack of 106kgs. 

Gemera car

Similarly, Koenigsegg made a four-seater hypercar named Gamera. And they made so many innovations to save space more than any of their cars. Like, Koenigsegg Gamera's electric motor is only 28kgs and it's slightly bigger than a cool drink can. But this single motor produces 355hp. Similarly, Koenigsegg made a 2 liter 3 cylinder engine for Gamera and this engine can produce 600hp. This is the first engine of its kind, and because of this Koenigsegg calls it a tiny friendly giant since it produces so much horsepower despite being very small. 

"Innovation in Flex Fuel Sensors"

Apart from engine and power trends, Koenigsegg has made many innovations, such as a flex fuel sensor, which allows these hypercars to run on any flex fuel. Think about it, today's sports cars ask for high-octane fuel but these hypercars are ready to run on any flex fuels to be environmentally friendly. 

Koenigsegg has innovated auto skin hinges, with the help of all Regera's all moving panels can be controlled hydraulically and this whole hydraulic system weighs only 5 kg. Now, all these innovations this company has made knowing all these make us think that these are made by companies like VW. Companies like VW have unlimited resources. And this thing about Koenigsegg always shocks me that this company has only 500 people. 

I mean, this small group of men make all the innovations that can shock even bigger car companies. And this proves that the quality of manpower is always superior to the quantity of manpower.

 Who will take this Chinese cart? We are insulting MG Motors too much. Now the company has officially become Indian. Like we treat Mahindra and Tata Motors in India. Now we will have to treat this company like them. Which counter of MG Operations in India did they take? Sachin Jindal (JSW Steel Chairman) bought the operations of MG India.

Shanghai Automotive Industry Corporation (SAIC) purchased MG UK in 2007. It is a big brand and they had terrible cars. So why don't we buy them and make wonderful cars in their name? Together with GM at this time, They were selling many cars in China and GM was working very well in India.

Why Did MG Cars Suddenly Face Performance Issues in India?

MG Launches MG India Pvt. Ltd.: A Game-Changing Move!

Even though GM has failed in India. We will launch affordable cars, and we will try the Indian market. Then in 2017, they registered a company named MG Motors India Private Limited in India. So this means that they do not sell cars in India in their name, they are going to sell in the name of MG which is a very smart move. Because in 1924 India sold cars in MG. But MG already has a powerful brand value, as compared to SAIC. MG is still fine Then it launches Hector in 2019 for around Rs 12 lakh. It's quite a decent price. This vehicle gets a very strong response and then this brand unveils its Gloster. Then Aster, and then ZSEV.

The problem was that in the last 2-3 years the sales of this company have almost tapered off and have become almost saturated. Around 50,000 units per year, if this brand has to be done above this this brand needs more investment SAIC is not ready to invest much because they are scared of the Indian Government. Because our Indian Government had already stopped investment in BYD and Wall. Also, a lot of investigation is going into the Indian operations of Chinese companies. They are making high profits but they are not paying tax on the profit to the Government of India. Because a lot of investigation is going on, So SAIC is afraid that if we invest the money and the government blocks the money then what will we do?

MG Seeking Indian Partner to Strengthen India Operations

That's why they have been looking for Indian partners for a long time to run their Indian operations. Who can invest money with them and grow their India operations? It can reduce their risk and both parties can earn a lot of money. Some time ago news was coming that many Indian companies are interested in this. Like Reliance Group Hinduja groups, Jindal Group Tata Motors, and some said that Mahindra has a valuation of around 80,000 crores. 

People were also saying this because setting up a car company is tough. MG has already built a strong brand value. Also, if they get more investment, they can create even better money. Imagine if Tata Motors or Mahindra had bought it, then what a great title we would have! And anyway, this brand would have got a good upliftment. Because these brands have a strong reach in the market. They can conquer quite well. These brands have ₹ 35,000-40,000 crore cash lying there to invest in MG. The one whose valuation is Rs 80,000 crore was too much. That much valuation can't be obvious because Mahindra has a valuation of Rs 2 lakh crore in India. Force Motor's has a valuation of 4,000 crores. So MG Motor is selling cars at less than them and is asking for almost 20 times more valuation from them.

Official: MG Motors Forms Strategic Partnership with JSW

But, now JSW has officially bought a huge portion of MG motors for India operation. it has also been confirmed. Now this is no such Skeptical news. JSW Group Chairman Sachin Jindal and SAIC President Wang Xiaoqui met at MG headquarters in the UK and signed this deal. JSW Group is currently going to buy a 35% stake in MG Motors India Private Limited. In the coming time, he will make his majority stake by investing some more around 51%. With this, this company will no longer be a Chinese company and will become a completely Indian company. Because the majority of stakes are owned by Indians only, Around 5-6% stake is of employees. So, now it has become an Indian company. We used to make fun of it, no one can make fun of it. In the coming days, just like you respect Tata Motors or Mahindra, you can also give respect to this company, if not completely, then a little at least. 

Because profits are coming in India more than half. Because JSW group holds a 35% stake in this company. So valuation is not confirmed yet. You can assume it to be around Rs 10,000 crore. So JSW group is going to invest between Rs 2,000- 4,000 crore in this company. And this will be used to increase the production output and scale of the company. It is not that any promoters should exit, owners exit or sell their shares. And in this, SAIC still provides their support and new models. So that MG can launch in India by changing them. They will provide better technology and whatever technology they are making in the international market. All that is going to be given to this Indian group. So that it does not happen that SAIC has washed its hands that now we are not going to support anything because our share was sold.

JSW's Indigenous Part Manufacturing: Key MG Advantage

Elsewhere, JSW Group will focus on expanding its Indian operations. Will also focus on its Indianisation. Most of the parts of cars this company come from outside the market, especially from China. But now this brand is focusing on the Indianisation of its parts, For example, the small motherboards, electrical parts or lights, etc. Also, JSW Steel is a stronger steel manufacturer than whatever steel it will use in the car. They will source directly from there. They will bring raw materials from the company and sell them on their own and will conquer the market very well.

SAIC and JSW Chairman: Exploring Their Business Relationship

This is very good and in this, the President of SAIC says, “The automobile business is a global industry, and like any other similar industry, access and collaboration are crucial for its healthy growth”. Wow! What a line. Wang Xiaoqui wow! We are very pleased. He also says "SAIC has always adhered to the 'win-win cooperation Our approach is core capabilities and expanding our scale of production and sales in the growing Indian automotive market.

Both partners shall work closely to bring in the best of innovation, in creating greener and smaller mobility products and serving our consumers Seizing market opportunities, continuously expanding the brand influence and market share of products, and achieving greater success for MG in India" Wow! What a line! Mr. Wang Xiaoqui, you are a very good person.

 After this, the Chairman of Jindal's JSW Group said “We would like to thank SAIC and MG Motors for choosing JSW as the partners of their choice and look forward to building one of India's largest automobile companies together”.

MG boasts a storied history and undeniable success. It's an immense privilege to steer this brand and company forward, partnering with the formidable global entity SAIC. The anticipation is palpable as we embark on this journey after 6-7 months of ongoing discussions.

 Nowadays car companies in many countries in the world make sports cars. These include German, American, Japanese, French, and British companies from all countries. But several decades ago, in all these countries, sports cars did not exist or only one or two companies made sports cars with great difficulty.

It was challenging to make these cars and to find customers for such expensive sports cars at that time. But there was one country whose car companies were very expert in doing both these things, and that was Italy.

Italy was a country where every car manufacturer used to make only sports cars and even today, if we see, seven out of eight car companies here make only sports cars.

Among these, the most famous sports car manufacturers today are four in Italy. Those are Ferrari, Lamborghini, Alfa Romeo, and Pagani. People must have heard many stories about them but perhaps no one knows one thing and that is, Ferrari started with Alfa Romeo, Ferrari started with Lamborghini and Lamborghini started with Pagani. The primary reason for the opening of all these three companies was disagreements and feelings of revenge. 

This article will disseminate a story that you must have heard less frequently. This is also an opportunity to learn from the experiences of great people on how and when you leave your comfort zone and experiment differently, you reach the greatest heights.

ALFA ROMEO

This story starts with Alfa Romeo. This company started in 1910. This was the time when cars used to be so expensive that only rich people of the same level as today's private jets could afford them and if you had to sell your cars to such rich people, your cars had to prove they were capable. Simply printing advertisements for cars in pamphlets and newspapers did not work. That's why most European car brands used to participate in races and Alfa Romeo also started doing this. That's why in 1920, Alfa Romeo released its first sports car named Torpedo and this car could produce 30 horsepower.

Enzo Ferrari working as a racer in Alfa Romeo

As soon as it was launched, this company started winning races continuously. In which he won the first race in 1920. When the Giuseppe company won the race in Mugello he came number one and positioned second in the Targa Florio race, none other than Enzo Ferrari. Yes, Ferrari's founder. Enzo Ferrari started his racing career in 1908. At that time he was only 10 years old. After racing for a few years, i.e. in 1919, he joined the racing team of Alfa Romeo. Now he was working as a racing driver in Alfa Romeo he used to participate in the races that were organized locally and at the same time, he also used to work in the Milan sales depot of Alfa Romeos. But in 1929 he left his permanent job at Alfa Romeo and founded his racing team called Scuderia Ferrari. 

To build this team he took a loan of one million Liras from the local bank. Apart from this he also got backing from some fellow elite, amateur racers. At the same time, he also got support from Italy's famous tire company Pirelli. Now, even though Ferrari had received a lot of support, despite all this, the money they received was only that much that they could only set up a racing team. And just setting up a racing team is not enough, you also need cars to race. So to source these racing cars, he went to George Remini who was the commercial director at Alfa Romeo. In this meeting, both of them set up a partnership due to which they would get cars from Alfa Romeo to participate in racing events. 

But there was a twist in it. See alfa also participated in racing events as I told you earlier. And he knew that if he gave his new racing cars to Enzo Ferrari then Alfa would not be able to win against him. That's why this agreement was reached between the two, and that was that Scuderia or Ferrari would use Alfa's cars to participate in the new race and Alfa would race with its new cars based on new technology. But these things did not last long. Because Alfa Romeo's factory was acquired by the Italian government when World War 1 was going on. 

Beginning of Ferrari

That's why Ferrari focused on making its cars and started R&D. The amazing thing is that he also started winning with his car. Meanwhile, Alfa Romeo has returned to the game and the thing to note is that the partnership between Alfa and Ferrari has not ended yet. And when Alfa returns to the races, they find that their partnership has become a joke and Ferrari continues to win races. So Alfa Romeo bought 80% shares of Scuderia and they became the owner. Enzo Ferrari worked as a manager in this racing team for some time, but in 1939 he was thrown out from his racing team by Alfa Romeo. And this thing reminds me of that phase of Steve Jobs when he was thrown out of the Apple he created himself.

Well, Enzo Ferrari was very angry with all these things, and what he did was that with his savings and the money, he got by selling the racing team, he decided to start his own sportscar company. At the end of 1938, he started it and the name of this company was Auto Avio Costruzioni. This is the same company that later became Ferrari. But for the first four years, he could not change the name due to a non-compete agreement with Alfa Romeo. Well, anyway Ferrari started. 

Ferrari started making many cars; throughout the 40s, 50s, and 60s, they made many sports cars. Ferrari emerged as the world's largest and most advanced supercar manufacturer. All Ferrari sports cars were made in very limited quantities and hence were super expensive. For that reason, only a few millionaires and billionaires could buy Ferrari.

How Ferrari owner’s insult created Lamborgini

There was a person, Ferruccio Lamborghini. Who was the owner of Italy's largest tractor manufacturing company and he used to own many Ferrari cars. But he often seemed a little unhappy with his Ferrari cars. And the biggest reason for this was the clutch of these cars. He believed that Ferraris' clutches break very easily. That's why one morning in 1963, he goes to a neighboring village in Maranello with his complaint and knocks on the door of a person and the person whose door he knocked on was Enzo Ferrari himself. It is believed that this meeting was very small. 

In this, Mr. Lamborghini explains to Mr. Ferrari how the quality of his clutches is very bad. He gives many suggestions as to how he can improve the clutches of his cars so that they last longer. Ferruccio Lamborghini told his point to Enzo Ferrari but Mr. Ferrari didn't like this constructive criticism. And instead of thinking about it, he tells Mr. Lamborghini something that has changed the entire sports car industry. Go back to your tractors, farmer.

Beginning of Automobili Lamborgini

Mr. Lamborghini felt very bad after this insult. Because he was also an engineer and his tractors were considered the best in Italy, he felt that Mr. Ferrari underestimated him and because of that very insult, he made a fitful decision. And that decision was that now he will also start a sportscar manufacturing company which will make faster and better cars than Ferrari and this time the work is also started very quickly. A small factory was opened in Sant'Agata, in which, within four months, Lemborgany made its first sports car, which was named Lamborghini 350 GT.

 Now if you pay attention, this is more shocking, isn't it? when a brand that had only made tractors to date, made a full-fledged sports car in just four months, how did Lamborghini do this? Ferrari itself was involved in the success of Lamborghini, not directly but indirectly. Because allegedly Enzo's wife Laura Ferrari was making very important decisions on the factory floor. And Ferrari's senior executives were very happy with this. Instead of listening to him and finding a way out, Enzo threw them out of the company. 

Someone's Trash, Another's Treasure!

And these five gentlemen who left Ferrari included Ferrari's chief engineer and development manager. And these senior employees approached Lamborghini and included it in their company. These five people, along with the rest of the tractor-making engineers, very quickly made a beautiful sports car. 350 GT received a good response and 13 customers bought the car immediately. And within its total timeline, 120 units of this car were sold. But this car did not make much difference to Ferrari. He was not afraid of this car, he believed that we make a perfect car from it. But the next car launched by Lamborghini shook not only Ferrari but all the companies around the world because that was the Miura. 

This car used to look too futuristic for the mid-60s. And it was a rear mid-engine car like F1 cars have always been. And this thing was very rare at that time for any car to come with a rear mid-engine configuration. And because of all these things, Miura proved to be a huge commercial hit. The production of this car started in 1967 and continued till 1973 and within that time, 764 units of this car were sold, which was a huge number for cars of this type at that time. After this, Lamborghini started launching sports cars one after the other. After this Espada was launched, then came Islero, then came Jarama, and then came Urraco. Now Lamborghini is launching sports cars one after the other but none has become as famous as Miura until Countach. Looking at the Countach, it seemed as if this car had come from another world and it was also the fastest Lamborghini ever.

How Pagani was diverse from Lamborgini?

But the most powerful variant of it came in the last days i.e. in 1998. The person who was leading this project was none other than Horacio Pagani. Yes, the same person who today owns Italy's most exclusive car company. Mr. Pagani was very fond of cars since childhood, he even made a Formula Three sports car at the age of twenty. Due to this, he got a job at Renault. But after spending some time there, he reached Lamborghini and started his career there by doing basic jobs like sweeping, etc. But due to his hard work and talent, he got recognition in Lamborghini. And he gradually climbed the company's corporate ladder and at one point he reached the chief engineer position. He also started working on the final version of the Lamborghini Countach as I told you. But there came a time when things got worse between Lamborghini and him. Mr. Pagani always used to work on the body and design language of cars. The recognition he got was because of his skill and even in Renault, he was called to improve the body of racing cars where he worked before Lamborghini. And he also wanted to do some big work for Lamborghini and that big work was autoclave.

Pagani’s reason for leaving Lamborgini

An autoclave is a machine inside which a very strong vacuum is created so that carbon fiber parts can be made. Mr. Pagani wanted Lamborghini to invest in the autoclave so that Lamborghini's cars could become much lighter and more rigid and could get ahead of the competition. But his statement was rejected by saying that when Ferrari does not have an autoclave, what will we do with it? As if Lamborghini's goal was only to follow Ferrari. Well, that was not even their mistake because in the 80s, no one used to make carbon fiber cars. But still, Mr. Pagani was very ambitious and he was not going to stop at these things and that is why he resigned from Lamborghini, by borrowing money, he bought an autoclave in 1987. And started his own design consultancy company, whose name was Moderna Design. 

This company had big clients like Aprilia, Daimler, and even Lamborghini's enemy company Ferrari. But the design form was probably only a stepping stone for him because later he launched his own car company, whose name was Pagani Automobile. In the late 90s, he launched his first car, Zonda and later Huayra also came. They released many different variants of only two cars over the years. But this car is so exclusive that till 2022, Pagani has sold only 450 such cars. Some of their models are so exclusive and so expensive that the worth of one of their cars is twenty times that of a Ferrari.

Carbon Fiber Body Speciality of Pagani

Well, apart from the exclusivity, Pagani also had one specialty. As we know, his love for autoclave was also visible in his car company and that is why Pagani became the only company that started giving carbon fiber cars from the very beginning and also became a company whose all the cars were made only with carbon fiber. He set such a trend in the market that if any sports car brand wants to call its car a hypercar, then its car should be completely made of carbon fiber. 

Well, this was the story due to which, due to resentment and disagreement, three big supercar manufacturers were born in Italy. What did you learn from this story today? Please tell me in the comments.

 You must know about this legend if you were also born in the 90s like me or even earlier than that. This scooter was used to carry both people and heavy luggage and it used to have a very strong body. If this scooter crashed in TATA Punch, even that could also break isn't it too much that LML NV and Bajaj Chetak used to be rivals at one time? Just like Mahindra Scorpio and TATA Safari with the changing times, Bajaj Chetak was discontinued. But the complete brand LML was closed you might get amused after knowing that. During the early 2000s, LML was the second biggest scooter manufacturer in India. 

However, in 2017, LML was discontinued because of too many losses. I know, these scooters had superb engines these scooters used to have exceptional build quality and these scooters used to come with a classic design just like Vespa they used to look wonderful. But if the scooters manufactured by LML were so wonderful Why did the company have to close its operations? If we look on the other side, The other Indian two-wheeler companies have become the biggest two-wheeler brands in the world Bajaj, Hero, and TVS.

How did they do so? 

In this article, let's understand this two-wheeler brand's business case study and get the answer to this question in detail. The primary business of Lohia Machinery Limited, LML revolves around Finished Leather Goods and Synthetic Yarns, and this company was established in the year 1972 In Kanpur, Uttar Pradesh. LML was focussing on its primary business and was also trying to enter more businesses, the other business in which LML was involved was the manufacturing of sophisticated machinery. These machineries were used in the fiber industry Like crimping machines, row texturing machines, Assembly Twisting Machines, screen printing Claridges, up, Twisting Machines, and more machines like these.

Name Behind LML

The company was also named Lohia Machinery Limited because it was involved in the manufacturing of Machinery, the machinery manufactured by LML used to have exceptional quality because of their magnetic crimping machines. The production capacity increased manifolds and in the year 1982, this machine was generating a production capacity of 3 tonnes in a single day. During this time, the French and Italian engineering firms established strong relationships with LML at that time, LML had just started to manufacture its twisting machines. In collaboration with these foreign firms the French Lesanie and Italian Mario, the relations of LML with French and Italian firms were becoming strong because of their primary machinery manufacturing business. But the chairman of LML was looking somewhere else as well, He knew that French and Italian brands manufacture superb two-wheelers.

The links LML has created with these foreign firms because of their primary business with the help of those foreign firms, LML can launch its scooters in India and they can lead the scooter market in India Because, at that time, the majority of the Indian population could not afford four-wheelers, That's why the majority of the Indians used to own two-wheelers looking at this opportunity, 

In 1982, Indian LML and Italian Piaggio formed a technical collaboration. Yes, it is the same Piaggio that is famous all around the world for its Vespa Scooters. But this collaboration between LML and Piaggio was not straightforward and why am I saying this? To understand this we need to go a little back in time before LML, the Italian Piaggio was involved in a collaboration with Bajaj under the collaboration of Piaggio and Bajaj, the Vespa 150 scooter was launched in India. This was a complete metal body, 150 CC two-stroke engine. But later on, this Vespa 150 Scooter was converted into Bajaj 150 and Bajaj made many changes to the looks of this scooter's headlights, etc. In the year 1977, the collaboration between Bajaj and Piaggio ended, and with this, Piaggio filed a lawsuit against Bajaj for patent infringement Piaggio asked the court to stop Bajaj from selling this scooter in foreign markets immediately and after this, Piaggio and LML came into the picture. We had just discussed this the scooters manufactured by LML that looked like Vespa were introduced in the market during the early 90s. During this time, the Italian Agnelli family that owned Piaggio decided to form a proper joint venture with LML and launch their scooters in India with this, a joint venture was established between Piaggio and LML And Piaggio had also acquired 28.5% stakes in the LML-Piaggio joint venture In this joint venture, many scooters were launched in India. Earlier LML Vespa NV 2 Stroke, select 2, and select 4 scooters were famous during that time because of their Superb Look, good fuel efficiency, and strong metal body. These scooters could be used for both personal use and carrying heavy luggage as soon as these scooters were launched in India. These scooters were loved by the Indian population and during the 90s, LML became the second biggest scooter manufacturer in India after Bajaj. But this success did not last for long and today, there is no existence of LML. Why did this happen? 

There are two main reasons behind this

The first reason is the Agnelli family They used to own the Piaggio brand. All the scooters of LML were based on the Vespa Scooters or their technology through this, we can understand that LML was completely dependent on Piaggio for its scooter business. Due to this fact, this collaboration was formed during the early 80s some problems were observed in both of these brands after some time. This Piaggio brand was owned by the family as mentioned earlier and this family had a huge reputation in Italy at that time the head of Piaggio was Giovanni Agnelli. He was only 26 years old, his uncle was Gianni Agnelli and at that time he was the head of the Fiat group with this fact, you can understand that the Agnelli family had a strong grip on the automotive market in Italy. Why I have told you all this about the family? Because the decisions made by the Agnelli family were the reason behind the downfall of LML, the first choice of the family was Bajaj. Even after their prior experience with them and this statement was even given by Giovanni publically. But still, the Agnelli family formed a tie-up with LML, unfortunately, this tie-up was broken when at the early age of 33 years Giovanni Agnelli died because of Intestinal Cancer. Immediately after this family announced to end of the tie-up with LML and after this the situation became poor Deepak Singhania who was the chairman of LML at that time took back the stakes of Piaggio in LML and in the year 1999, Piaggio and LML settled outside the court and this joint venture was ended in the year 1999, this distress became a huge reason behind the downfall of LML, now they can sell only those scooters whose designs were not provided to LML by Piaggio. That means scooters from the P series but LML at its end made these P series scooters highly innovative because, of course, LML was already in trouble and debt as well. Hence, according to me, they could not innovate much Because a huge amount of money is required for Research and Development everybody knows about this the effects of this were even visible in the sales of LML Because LML used to keep 25% of the share in the Indian scooter market in the year 1998 it was at second place in terms of sales of scooters. 

In the year 2000, the market share of LML was reduced to 22% Now, this change might not look significant to you but the share of other minor companies was increasing continuously. In the scooter market in India if we look at TVS-Suzuki. In the year 1998, this joint venture only had a market share of 7.1%. In the year 2010, this share was increased to 10.2% and obviously, it was happening because the majority of the Indian two-wheeler brands were involved in joint ventures with Japanese brands. Due to this, these Indian two-wheeler brands had access to the technology that LML did not have but Japanese brands did one more thing that destroyed LML and that was motorcycles. During the early 2000s, Indians preferred buying motorcycles because of their mileage and speed because of the Japanese tie-up Indian two-wheeler brands like Bajaj, Hero, and TVS became experts in manufacturing motorcycles. But LML did not have any such expertise which is why LML could not introduce motorcycles in India for a very long time and that's why LML lost its control over the Indian market in terms of motorcycles LML introduced motorcycles like Freedom, etc India and even made Shahrukh Khan their brand ambassador. But still, the sales of LML continued to decline. 

One more problem was also associated with LML apart from the motorcycles and that was the Honda Activa that was launched in the year 2005. When Activa was launched in India in the year 2005 at that time there was no such scooter in India that was so refined and had such an automatic gearbox Activa proved problematic not only for LML. But it also destroyed Bajaj, Bajaj had other star products in its fleet apart from Chetak Like Pulsar. Bajaj discontinued manufacturing scooters gradually and they shifted their complete focus to Motorcycles but LML did not have any other means to save itself and neither of their scooters came close to Activa. That's why LML continued to suffer losses and in the year 2017, LML was discontinued. But I would say one thing because I had driven the Chetak scooter of my father a lot during my childhood that's why I liked these bulky and heavy metal scooters very much and the scooters introduced by LML in its last days. Those scooters were only for niche enthusiasts because in the end, for its revival LML introduced the 200 CC 4-stroke scooter this scooter was named Star Euro 200. LML also launched a similar-looking 150 CC automatic scooter and trust me, driving these scooters would be fun. Especially the geared scooters because a 4-stroke Chetak scooter and any present-day scooter could not match its torque.

Re-Entry of LML

Now, what happened cannot be changed but LML is soon going to re-enter the Indian market this time they are going to launch EVs, and the EV scooter showcased by them on their website looks very high-tech. But a personal request and suggestion for LML is that they should also launch a scooter in India that has the shape of Star Euro. It would be joyful if a similar scooter was launched in India.

 Around 12 years ago, the world's most prestigious motorsport event was organized in India. The Indian Grand Prix Formula 1 racing event was inaugurated in 2011. The event took place at the Buddha International Circuit near the Yamuna Expressway in Greater Noida, Uttar Pradesh. Formula 1 entered India on a contract of five years from the year 2011 to 2015, Formula 1 event was to be organized every year at the racing circuit developed by the Jaypee Group.

But something counter happened and the organizers were in such a situation that all the races were concluded in three years. After this, Formula 1 racing was never organized in India The Jaypee Group found itself amid a financial crisis. Because of the development of the racing tracks to promote the event Jaypee Group had invested a considerable amount of money. But a very big question arises here why did the Formula 1 racing event exit from India?

Why did the Formula 1 racing event stop taking place in India?

The Government of Uttar Pradesh was the biggest culprit behind this when the Formula 1 event was organized in India. Many problems were to be addressed before it was to be organized in India when Formula 1 cars and other stuff were imported to India. The organizers had to face heavy difficulties in getting clearance from the customs and the organizers had to cope with several bureaucrats as well even for minute jobs, this was also because both the central government and state government were not supporting the race organizers, but all these problems were minute. 

The state government of Uttar Pradesh itself created the most significant problem Akhilesh Yadav was the chief minister of Uttar Pradesh back then. The government of Akhilesh Yadav refused to consider Formula 1 racing as a sporting event and a 25% entertainment tax was levied on this racing event. According to the government of Uttar Pradesh motorsports is not any kind of sport. But it is an entertainment event due to this high amount of entertainment tax Formula 1 exited from India and has yet to return. 

Now, from the beginning of this Mega event of racing that is Formula 1. We can observe that, the different governments of India were never interested in motorsports and how Formula 1 was completely burned in the dirty politics of India. But everything has not been completely finished because another significant motorsport event is being organized in India. Yes, here I am talking about MotoGP and do you know?

MotoGP Bharat 

Things that hampered the growth of Motorsport In India!

This article will be related to MotoGP and will address the causes behind hampering this motorsport. As discussed previously the failure of the Formula 1 racing event and the state government of that time was responsible for that failure. I have done this because the state government was completely against the organizers for organizing this event at one time. But today as the government has changed, the BJP is in power in both the centre and the state of Uttar Pradesh. This situation has completely reversed today we can observe that if Yogi Adityanath was the chief minister of Uttar Pradesh. This event would have never been organized in India I am not making any of these statements on my own. This is told by the organizers of Moto GP the organizers of Moto GP have highly appreciated the enthusiasm shown by Yogi Adityanath and later in this article, we will understand step-by-step. 

How state government has contributed heavily to organizing this motorsport event. But before that, I want to give you a disclaimer this article does not hurt any sentiments politically. Whether it is inducing a ban on car modifications or increasing taxes on cars. But being a motorhead we should definitely appreciate the government if something good is done by them. If these motorsports events are not organized in India. It is not a positive thing for India because today, India has the third-largest automobile market and Motorsport events act as fuel for these types of markets.

What is MotoGP?

First of all, let's understand the MotoGP and then we will discuss the other things. Motorcycle races have been organized for around 100 years. This means from the time motorcycles came into existence. But these races were considered motorsports in 1949 by FIM FIM (Fédération Internationale De Motorcycle). After the introduction of this organization in motorcycle racing everything started happening in an organized manner and motorcycle racing was converted into a worldwide championship event. During the early stages, many teams from European countries used to participate in these races, and today, countries all around the world participate in these sporting events. Races were categorized based on the size of the engine of the motorcycle bikes from 80 CC to 750 CC used to be a part of these races.

But during the late 90s, the premiere class that means the most powerful bikes. These bikes used to have an engine capacity of only 500 CC, these engines used to have 2 strokes only. But Moto GP was introduced in the year 2002 till now, the premiere class of motorcycles was not called Moto GP. This name was given in the year 2002 and in the year 2002. The capacity of the engine was increased to 990 CC and motorcycles with four-stroke engines were introduced.

Different Types of Races

Later, the size of the engines was modified many times but the size of the engine was fixed at 1000 CC or 1 Litre. And even if we observe today Bikes with engine capacity of 1000 CC or 1 Litre are the most powerful machines on the racing. But Moto GP is not alone in participating in the race. Moto 2, Moto 3, and Moto E are also organized along with the Moto GP. The size of the engines of motorcycles is smaller in Moto 2 and Moto E racing events and only electric bikes are a part of the Moto E racing event If we talk about the rules of the Racing Events. 

The rules are very simple 22 riders take part in a race that belongs to different teams and they start the race from a grid position which bike has to withdraw from the front of the grid and the last position is decided by the qualifying speed. I talk about the Moto GP race, It is simple sprint racing. The team that completes all the laps early and stands at the first position at the end of the race as well. Is the winner of the race. The teams participating in these races could have different names like Ducati Corso, Gresini racing team, or Repsol Honda.

Who makes MotoGP Bikes?

However, the motorcycles used in these races are developed only by legacy motorcycle manufacturers. Because not all can perform this type of extreme engineering, Riders from any country can participate in these events. But they are exclusively bound to their respective teams and I take the name of the world's most respected rider. He is Valentino Rossi He is top-ranked in the Moto GP titles. Now all the history and rules that we have just got to know I have only provided you with a summary of these. If we would have gone into detail, the whole aim of this article could have been disturbed. You can get all the other details related to these motorsports events on the internet. You can read it from Wikipedia and after this, watch the Moto GP racing event on Jio Cinema on Sunday. Now let's talk about the main motive of this article and that is Moto GP Bharat. 

How did Moto GP succeed despite Formula 1's failure?

Let's understand how the Moto GP event became successful despite the failure of the Formula 1 racing event. Similar to Formula 1, Moto GP is also getting organized by a private enterprise and Fair Street Sports is organizing this event. But unlike last time the central government of India and the state government of Uttar Pradesh have highly supported the organizers in organizing this event. 

In an interview with the Hindustan Times, the COO of Fair Street Sports, Mr Pushkar Rajsrivastava said that Promoters have signed a deal for seven years with Moto GP and this is a huge fact. But he also said that he and his partner Got the inspiration to introduce Moto GP in India when Motorsports was announced as a sporting activity in the year 2019. Now unlike Formula 1, organizing this huge motorsports event does not require paying high amounts of tax. But Dorna is the commercial rights owner of Moto GP, It was not easy to convince Dorna to organize Moto GP in India because Dorna was not sure about the efforts of the Indian government as they knew what happened with Formula 1.

How Motor Sport was introduced in India?

But still, they entered India They met with the Cheif Minister of Uttar Pradesh, Yogi Adityanath, and Union Minister, Anurag Thakur, and Dorna quickly realized that these people were highly passionate about organizing this motorsports event and this enthusiasm was not only visible in their conversation. However, we observed that all the approvals and compliance processes were very smoothly addressed by the government, and all the NOCs were issued on time. 

Organizers did not have to visit multiple offices to get their processes done and recently Moto GP through their official X account thanked the CM of Uttar Pradesh and PM of India. For their help and last-minute visa approval for all the riders, the racing event could not have been organized without any riders. Here the government is mentioned many times because support from the government is highly crucial in organizing these events the government of many countries even funds racing events like Moto GP and Formula 1.

Advantages of Motorsport event in India

The Indian government also funds other sports but in a country like India where people have a low-capita income. It is not adequate to spend the money of the taxpayers on these types of events still the passion of the Indian government towards motorsports this time Is very positive whether it is including motorsports in the category of sports. Working dedicatedly to organize this event on time because tourism also increases by organizing these types of world-class motorsports events recently Shri Narendra Modi has also spoken about increasing tourism in India through sports as it is done in Qatar and not only tourism. 

India is the capital of the world in terms of two-wheeler riders and that's why it is considered that India has more passionate fans of events like Moto GP instead of the European countries if you are also a big fan of these motorsports events. Do watch Moto GP on the Jio Cinema app.

 In September 2022, the road, transport, and highway minister of India Mr. Nitin Gadkari told all the car makers in India to stop selling unsafe cars to poor Indians. Nitin Gadkari said this because the secretary of the road, transport, and highway minister of India, Mr. Anurag Jain said that all the deaths happening due to road accidents in India have been observed at a speed less than that of the other countries. This means that if any car met with an accident in Europe due to high-speed, still, there are fewer chances that the occupant would die. But the chances of a fatal accident are higher in India even at low speeds.

But why is this so?

This is because the cars running in the US and Europe are safer in comparison to India and we have discussed it many times in the past that the cars that have a 5-star rating in Europe. The same models have got 2–3-star ratings in India. An Indian NGO has even cleared this fact an NGO named “Save Life”. When investigating the crash accidents that happened in India, they found in 66% of the accidents that the passenger compartments in the car have been impacted as well seats were deformed in 34% of the cases and 30% of the accidents were a result of absence of safety braking system in the cars.

What is Bharat NCAP?

The Bharat New Car Assessment Programme (Bharat NCAP) is a game-changer for India's automotive industry. It signifies a monumental shift in prioritizing safety standards in vehicle manufacturing. By rigorously testing and rating cars for their safety, it empowers consumers to make informed choices, ultimately leading to safer roads and reducing accidents. This revolutionary program elevates the safety bar for cars in India, saving lives and enhancing road safety.

Why are large quantities of unsafe cars being sold in India?

So, the question arises, India has the 3rd largest car market in the world, Why unsafe cars are being sold in huge numbers in India? The biggest reason behind this is the absence of India's own dedicated car assessment program. As you might have observed some of the bigger countries or groups of smaller countries have their own assessment programs, like NCAPs Latin, NCAP for Latin America, CNCAP in China, USNCAP and IIHS for the US, and European NCAP in Europe.

But in the year 2022, Mr. Nitin Gadkari said “It is highly essential for the cars that are getting sold in India to be assessed in Bharat NCAP because many lives are lost in India due to road accidents”. It also hampers the Indian economy because the people who lost their lives in road accidents are youngsters in the majority of the cases and these are the future of India. This is why Bharat NCAP will become fully operational from October 2023 and the most surprising fact is that all the major car brands in India, have already sent around 30 cars for testing all the mass market car brands have given statements in support of the Bharat NCAP.

Whether it is Hyundai, TATA Motors, Mahindra and Mahindra, Kia, or Skoda everybody is in support of Bharat NCAP and even Maruti Suzuki has said to support this initiative not only this, the executive officer of Maruti Suzuki, Mr. Rahul Bharti has said that Maruti Suzuki has already sent at least three of their cars for testing at Bharat NCAP.

But do you know, the active participation of Maruti Suzuki in this program, which is sending three cars together for testing? Is a very surprising fact, do you know why I am saying this? Because Bharat NCAP is not mandatory and through this statement, I mean that achieving a certain Bharat NCAP rating to sell cars in India is not at all mandatory. Even the brand could also choose not to send any of its cars. It's totally up to the brand whether it sends any vehicle for testing or not. This is because the job of Bharat NCAP is only to provide details to the public about the number of ratings any particular vehicle has achieved. It has become similar to the warnings written on any cigarette pack. But smoking and chewing tobacco is not at all illegal.

Is Ncap really necessary? 

Now it is not like this is the case with the Bharat NCAP only NCAP ratings are not made mandatory anywhere in the world. This means any brand can sell its vehicles without these ratings as well whether it is Euro NCAP or the American IIHS and that's why I have said that the momentary participation of Maruti Suzuki in this program and sending three of its cars for testing together is a massive fact. We observed that the performance of Maruti Suzuki in the Global NCAP has always remained poor and no magic is going to be observed in the Bharat NCAP. Because almost every testing that would be done in Bharat NCAP would follow the norms completely. As it is done in the Global NCAP testing this is because Bharat NCAP has been associated with the Global NCAP And that's why I am not going to discuss every point.

This article is not related to How Bharat NCAP is good or poor concerning Global NCAP. Or how does Bharat NCAP stand in front of Global NCAP? If you want to know about that there are ample numbers of articles on Google and even there are several videos about that on YouTube as well you can refer to them.

The main purpose of this article is that when Bharat NCAP is exactly similar to the global NCAP, and it is not mandatory as well why are so many car makers especially Maruti Suzuki participating actively in this program? Poor ratings can hamper their reputation as well, 

There are primarily two reasons for this:

1. The cost of testing is the first reason we need to discuss Global NCAP.

At Global NCAP, the procurement of vehicles is done in two ways. In one way, Global NCAP takes the vehicle anonymously from the showroom and then they test the vehicle. But it is done only when OEMs deny to provide their vehicles for testing. Like, Maruti Suzuki denied providing its cars for testing, but the majority of the car makers sent their cars for testing. Because they know in advance that their cars will perform better and every car maker from India to Germany is included. 

In this process, an executive from the Global NCAP randomly selects a car from the production line. Then the brand sends the car to the UK bearing all the costs. The car is tested in the UK three to four units of any vehicle are taken. The cost of those units, the cost of transportation of sending the cars from India to the UK, the expenses of the manpower used in the crash tests, and the cost of facilities that are going to be used. Every type of expense is to be borne by the car manufacturer and this cost is in the range of a few crores. As I have heard it takes around INR 2-3 crores. 

The cost also depends on the car And now if we talk about the Bharat NCAP. The way of procurement of cars by Bharat NCAP is exactly similar to the path of Global NCAP. Every piece of expense is to be born by the manufacturer here as well. But there lies a difference here and it is that Unlike the Global NCAP, the cars would not be sent to the UK now. But to do this, already 6-8 government-certified test centers have already been inaugurated in India. These are situated near the different auto-hubs in India Like Gurugram, Chennai, and Pune. The test centers are situated near these sites. It has been estimated that this will reduce the expense of the car manufacturer by almost 75%. This was the minor reason car manufacturers actively participated in the Bharat NCAP program.

2. Public trust in the government and car makers' advertising are the main reasons.

Due to this as discussed earlier in this article in the major car markets. The cars don't need to get a certain number of ratings in the NCAP. But still, the cars available in those markets are highly safe and the biggest reason behind this is the public's trust in these ratings. In the majority of the car markets, NCAPs were introduced many decades ago like IIHS. It was made by many insurance companies in the US. This organization became active in the year 1959 and in the year 1995, this organization also started front-end crash testing, and then gradually, many NCAPs were introduced Euro NCAP was introduced in the year 1986 and A-NCAP was introduced in the year 1983. The benefit of the early introduction of these NCAPs was that the customers of cars in these countries became highly educated about the importance of car safety. It was also because the governments of these countries were supporting these organizations and people trusted their government more than any random organization. 

Similar could be observed with Global NCAP in India and that's why without any governmental forced mandate. Only safe cars are being sold in these countries because the people in these countries don't want to buy any unsafe car and if you want an example, you can look at the recently launched Scorpio-N in Australia. When this car was launched in Australia this car was reviewed by the media of Australia. They had provided this Verdict. If you are one of those people who puts safety as one of your top priorities when it comes to buying a new car. Especially in 2023, then it not might be right for you this is probably something that disappoints me about this car there is no autonomous emergency braking. The fact that it doesn't come with any active safety is a real letdown, especially in 2023 and if this is your family car, you want your car to be as safe as possible.

Reviews of Australia

Australian reviewers are criticizing Mahindra and Mahindra for not providing a high-end safety feature like ADAS in a family car. Even though this car is available in Australia at a price of half that of Everest the Fortuner Scorpio-N competes with this car neck-to-neck. Still, they are highly concerned regarding this and in India, ADAS is not provided in 90% of the cars, and from here we can understand that due to the presence of A-NCAP in Australia for many years. The people of Australia are highly concerned about the safety features provided in cars. 

A similar is going to be observed with the Bharat NCAP in India Because here the government is testing the vehicles and now people would become highly aware of the safety provided in cars in India. Therefore, they would demand their car manufacturers to provide the government safety level sticker on the car and this is the main reason behind providing so many cars together in a short period Companies like Maruti Suzuki and Hyundai are also participating in this program. Because they know that they used to ignore the Global NCAP, they would not be able to deny Bharat NCAP because the Indian government is involved in this and I believe if every brand starts providing its car to Bharat NCAP considering it to be mandatory.

Maruti Suzuki testing for Bharat NCAP

Maruti Suzuki would also be forced to provide its cars as well in the future This can lead to two things – Either their sales would decline sharply because of poor ratings or they could become the car brand with the best safety ratings. But still, I believe that Bharat NCAP should have been made mandatory or at least some points should be made to be followed strictly like if any car obtains less than two stars. That car would not be allowed for sale in the market. The car companies that completely neglect the safety features in their cars would definitely need to follow these rules. Do let me know in the comment section whether you agree with me or not 

 You are likely familiar with various car companies' brands, such as Volkswagen, Toyota, BMW, etc. unless you have been living under a rock for the past few decades. The Japanese giant Toyota is the most prominent of these well-known companies, producing the largest number of vehicles worldwide. However, this list does not highlight the most valuable car companies. Instead, it reveals the companies that have paid the most debt globally. It is not uncommon for businesses to acquire debts to function, so being in debt is not necessarily a significant issue for these companies.

If you look closely at the list, you'll notice a peculiar trend. Out of the 12 companies listed, 6 of them are automotive companies, with Toyota being the company that has acquired the most debt at $186 billion. It's strange to see this trend persist not just in the current year, but in the past as well. In 2019, the most indebted companies also included automotive companies like VW AG, Daimler, Ford Motor Company, and BMW. Upon analyzing data from the past five years, I found that aside from major players in the automobile industry, no other industry had acquired such a large amount of debt. While telecom companies do acquire high amounts of debt, this trend is not as consistent as it is with automotive companies.

It appears that the same situation is now occurring with car companies. This raises a significant question: Why is this exception limited to car companies? Additionally, there is concern over whether these companies may face bankruptcy after acquiring such substantial loans. However, there is no need to worry about this colossal debt causing trouble for these companies, as such an outcome is highly unlikely to occur.

What is the reason for car companies to never go into debt?

Keep the thought of going bankrupt aside, Volkswagen and Toyota are highly profitable automotive brands at this point in time almost every car company acquires a particular amount of debt. Whether it is a significant company or a minor one, this is because operating a car company requires a massive amount of capital. This factor alone is not sufficient, to keep these companies in the list of the top 10 most indebted car companies from around lakhs of the automobile companies around the world. The reason behind that is the finance wings in these companies. 

Did you know that big car companies like Ford, Toyota, and Volkswagen have their own finance departments? These departments help the companies' dealers keep their stock and assist consumers in acquiring loans. To do this, car companies receive a large amount of capital from banks at a lower interest rate. They provide this capital to individuals at a slightly higher interest rate than the one at which they acquired it, resulting in a profit. Due to this approach, car companies have acquired billions of dollars in loans. Although the majority of this capital is acquired by their finance departments, there may be more to the story.

How do Indian Car companies bear the debt?

Let's understand this with two Indian car brands. TATA Motors also has a finance wing. It is called TATA Car Finance and they provide loans exclusively for TATA cars, This finance wing comes under TATA Motors. But if we talk about Mahindra and Mahindra the name of their financial wing is Mahindra and Mahindra Financial Services. But this wing does not come under the Mahindra and Mahindra car company and that's why it is listed as a separate entity in the Indian Stock Market. That's why Mahindra and Mahindra Financial Services can also provide loans on different types of vehicles manufactured by Mahindra and Mahindra and even on the vehicles of other brands unlike TATA Car Finance, etc. However, the car companies that had acquired the most amount of debt in the world provide loans exclusively on their cars just like TATA Motors. We could observe one more thing from here and it is that more car companies are present in this list. More is the amount of debt they have acquired, Toyota, Volkswagen, Ford, and Mercedes are the top companies in the world in terms of revenue we can observe here that the debt size is directly proportional to the size of the company. The bigger the brand, the bigger the debt.

Debt is directly proportional to the size of the company because these companies are selling more vehicles. As discussed earlier these car companies have to first acquire a loan from a bank. The more cars they sell, the more amount of debt these companies would acquire, That is the reason the bigger the brand, the more the amount of debt acquired by them from this, we can also understand that increasing debt figures means that these companies are performing well. 

The debt of Ford.

Since they are selling more vehicles that's the amount of debt is increasing and if we especially talk about Ford then they are escaping from going bankrupt only because of their lending firm. Do you want to know how? The sale figures of Ford is continuously declining in its home market and we can also observe internationally that they are stopping their operations in various markets one after the other. They had exited from Japan and India and are also declining in China. That's why the situation of Ford has become so critical in recent years that if they did not have any financial subsidiary. They could have reported bankruptcy according to a report published in the year 2020 The lending firm under Ford is generating 50% of the overall profit generated by Ford. This means the number of vehicles Ford is selling similar is to the profit they are earning through the interest from the loans they are providing to their customers. But usually, it is observed that the finance arm of any company generates only 15-20% of the profit for the company that's why it has been considered. In the case of Ford if they did not have any finance arm they were not capable of spending capital on the R&D of electric vehicles.

Now we understand that this mountainous debt on the car companies. Is not at all like any typical debt some car companies are even performing exceptionally but debt is acquired by almost every car company. Whether they have a financial wing under them or not are all such companies also profitable? No and from where there comes a U-turn in the story of the debt of these car companies. Now do read very carefully what I am going to say If you follow the car industry closely. You might have also noticed that apart from a few countries in the world. The majority of the countries in the world have only one or two car brands India has only two major car companies TATA Motors, and Mahindra and Mahindra. Korea also has only three major car companies Hyundai, Kia, and Ssangyong, While a country like Australia does not have any car brands and countries that had multiple or successful car companies in the past, the majority of those companies have been already sold out.

Why do car brands do not have any ownership of their own?

Let's talk about the United Kingdom Rolls Royce and Mini Cooper are owned by the BMW group. Bentley is owned by the Volkswagen group. Jaguar and Land Rover are owned by TATA Motors and this leaves only one car brand Aston Martin Its condition is so poor that It can file for bankruptcy anytime. Britain is not the only one that has such a condition. The majority of the European and American car companies have experienced this. It is considered that at one time there were around 300-400 car brands in Britain. But today it can be observed that the brands that are left today do not have any ownership of their own. This is not the case in Britain there are only two companies in the US i.e., Ford and Tesla. They have not filed for bankruptcy till now, according to a tweet written by Elon Musk The US had 1000 Auto start-ups at one time. But today all have become non-existent.

Why have so many brands shut down or been sold?

Even though they had a huge brand value. The answer is Debt other than lending departments, car companies require a tremendous amount of capital for their operations and it is considered that the car business is the toughest in the whole world. It is so difficult to operate a car company that developing a rocket and sending it to the moon is easier. Hear it from the owner of a space company car companies require heavy capital to set up their manufacturing plants to acquire the raw material, to manufacture their cars, to provide the salaries, and to ship their products as well. Apart from this, if the companies observe any problem in the whole batch of any car. They have to recall the cars, remove the flaws, and deliver them back to the customers and if I talk about the year 2023 only General Motors had recalled 6.5 Lakhs SUVs Jeep had recalled 2.19 Lakh cars. In the year 2023 alone Honda has recalled 5 Lakh cars.

Regarding the safety belt issues similarly Indian car companies have also done thousands of recalls. Alone in the year 2023, these expenses are highly diminished in front of a tremendous expense. It is also associated with the car companies and it is R&D For launching new models, And to also upgrade the current models, Automotive Brands have to spend a massive amount of capital. If you don't know, R&D stands for Research and Development apart from this, they have to spend huge capital on the R&D of the engines to continuously get stricter emission norms. Apart from this, safety norms are also getting highly strict around the world and that's why automotive companies have to spend a huge amount of capital on the R&D of both active and passive safety features the biggest transition that the world is experiencing at present. That is the world is shifting from IC Engines vehicles to Electric vehicles Car companies have to spend a huge amount of capital on this due to the same reason.

Debt of Tata Motors and Mahindra

TATA Motors and Mahindra Mahindra are the most cash-rich companies in India and come under the top 10 most indebted companies in India. Yes, because these companies also use the majority of the debt in the R&D of cars. You can observe the same in the chart car companies spend huge amounts of capital on the R&D of cars. What is the intensity of the R&D of these car companies? From this chart, we can understand that all the car companies that are present in this chart Volkswagen Group has spent the most capital on the R&D of cars. According to this list, TATA Motors has the biggest intensity in the R&D of cars, and take into account that here we are talking about the whole world, not India. Here R&D intensity means that what percentage of the sales these companies are spending on R&D of the cars? and TATA Motors has the biggest R&D intensity. This could be because the market capitalization of TATA Motors is less in comparison to the other companies present in this chart and TATA Motors is only limited to India. But obviously, since they want to grow, that's why they are spending huge amounts of money. In the R&D of their vehicles, As discussed previously almost every car brand has acquired a huge amount of debt. There is an exception as well, this brand has not acquired any amount of loan, and this company is Tesla!

How can Tesla accomplish this?

Because Elon Musk has created massive hype around him and Tesla. Due to this, the value of this company is touching the sky. A high value means that the stock price of Tesla in the stock market is very high. It is so high that the valuation of Tesla is double the valuation of Toyota. Even though Tesla has twice the brand value of Toyota. But, Toyota is far ahead of Tesla in terms of its sales since Toyota is a monstrous company. That's why the expenses of companies like Toyota are very high compared to companies like Tesla. But still, Tesla is not so small company it should have definitely acquired a certain amount of debt. However, Tesla has not acquired any debt because due to its increased share prices, they indulge in equity funding. They have acquired an almost negligible amount of debt Now, after reading this article, you might have understood, how difficult it is to operate a car company!

Next time you are about to criticize any car company blindly. You should keep one thing in mind. These companies are in a fight with many government policies and several odds as well and it takes a considerable amount of risk to deliver an affordable car to you. If you have loved reading this article please share this little piece of blog and don't forget to mention your thoughts in the comment section.