India has its own set of challenges to deal with

If global brands have their work cut out in an unpredictable arena, the Indian auto industry is also gearing up for a challenging 2019.

This is going to be a year of political uncertainty as an existing government at the Centre will try and stake its claim to win over voters for another five years. National elections are due to be held in the middle of this year and there is absolutely no indication if the BJP is assured of a second term.

Apart from the political theatre, the real challenge for auto-makers is to meet the Bharat Stage VI emission norms, which become a reality in April 2020. This will see big investments made in cleaner technology which, in turn, will make cars, trucks and two-wheelers pricier.

How customers react to this new pricing regime is anyone’s guess except that the silver lining in the cloud is that there could be a fair deal of pre-BS VI buying. Customers will typically opt for less expensive BS IV models if it means saving a few lakh rupees especially in the commercial vehicle space.

Two-wheelers have safety norms and ABS and CBS to fulfil in April this year, which will again see a revision upwards in their price traps. It remains to be seen how this will impact customer sentiment but it is a fair guess to say that entry-level commuter motorcycles will continue to be the biggest draws.

Companies will also be hoping that there is assured availability of BS VI fuel across the country when the emission norms become mandatory. Oil companies are confident that they can pull off this marathon exercise, which will involve very careful planning across their refineries, depots, pipelines and retail outlets in order to make a smooth transition.

The cleaner BS VI fuel is also going to be costlier, which means the following decade is one where customers will just need to get used to the idea of paying more. Yet, if this means breathing a lot more comfortably with cleaner emissions in place, this price will be well worth it.

COMMENT NOW