The clean challenge is all about getting the consumer metrics right

V Rishi Kumar Buying your first car or the next one? It is time to pause and do some research before finalising your dream vehicle.

This is because the country’s automotive sector is faced with the uphill task of meeting the April 2020 deadline to gear up for the far stricter Bharat Stage VI norms (from the existing Bharat Stage IV), which seek to cut down further on automotive emissions.

According to Mayank Pareek, President of Passenger Vehicles Business Unit, Tata Motors, “the automotive sector transition to BS VI norms, set for April 1, 2020, will be the single biggest challenge for sector players.” He made this pertinent observation to BusinessLine in Hyderabad last week where he had come to launch the company’s latest sports utility vehicle, Harrier.

The implications of these norms are not only far-reaching in terms of how the sector braces for the challenge but also in terms of a hike in the price of petrol cars — between ₹15,000 and ₹25,000. Diesel cars will see a steeper increase in the ₹80,000-₹1 lakh range per car.

While buyers of diesel cars priced at ₹20 lakh and above may be able to absorb the price hike, it will be a tough call for buyers of cheaper vehicles. Potentially a diesel car could deplete your purse by ₹1.5-2 lakh over a petrol one.

Race against time

For automotive companies, the transition to the new norms has become a race against time with the deadline barely a year away. The manufacturers will also have to ensure staggered production so that they do not end up with BS IV models on April 1, 2020. This is because a manufacturer cannot sell a BS IV car made on March 31, 2020, on April 1, 2020.

Says Pareek: “At Tata Motors we will be ready for the BS VI transition ahead of the deadline. This may mean doing away with some of the older models which have completed their product life cycle. As for cars such as Tiago, launched about three years ago, they will be upgraded.”

In view of the transition, there is the possibility of at least a section of buyers opting for a ‘wait and watch’ approach till the new norms come into force. Meanwhile, the automotive companies are not only competing against each other but are seeking to be ready for the deadline for compliance with BS VI norms. While the country’s largest car company Maruti Suzuki has indicated that it will transition to the BS VI norm vehicles by January 2020, other manufacturers, including Hyundai, are also on course for the transition.

Says Manohar Bhat, Head, Sales and Marketing Group, Kia Motors India, “As a global automotive company, we have a wide range of models. We will offer models that suit the Indian market and ensure they conform to the latest emission norms.”

This assumes importance in the backdrop of the company starting trial production from its facility in India to offer its first India-made car from July this year.

The market share of diesel cars is likely to come down from a peak in 2012. While the cost of the diesel car is likely to go up significantly, the price gap between the fuels diesel and petrol has been coming down, from ₹32 in 2012 to a single digit currently. This will also pose a challenge for buyers as well as sellers.

Significantly, this will mean the phasing out of a number of current models across different manufacturers as they will become too expensive to upgrade. Hence, it may be more prudent for carmakers to come up with new models.

Cleaner fuels

The new BS VI norms will be supported by cleaner fuels from oil companies. The sulphur content in the fuel will be much lower, harmful nitrogen oxides will also be brought down, leading to lower emissions.

The new cars will have upgraded catalytic converters, improved fuel injection systems and for diesel engines, they will come with better engines and a number of enhanced safety features, including meeting crash-test norms.

Apart from significant focus on emission norms, there will be importance for safety features that come with ABS, airbags, as a standard across all models, including entry models.

Through BS VI norms, the Government seeks to regulate emission of air pollutants from motor vehicles, seen as a major cause of pollution in the urban areas of the country, more so in metropolitan cities.

With superior emission systems in new cars, it is expected that they will release less carbon, sulphur and particulate matter.

BS VI norms will be a two-stage boost to emission norms akin to Euro 6. For some of the leading manufacturers already operating in developed markets, the transition may be easier than for others only operating in the domestic market.

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