Car prices to rise with stricter emission rules

Passenger and commercial vehicle prices are expected to rise as automobile companies invest in upgrading vehicles to meet stricter emission norms that kick in from April next year. The Indian automobile industry is currently working to make their products meet the second phase of Bharat Stage VI, equivalent to Euro-VI emission norms, in real time driving conditions.

Four-wheeler passenger and commercial vehicles will need more sophisticated equipment to be added to meet the next level of emission standards. Industry players expect an increase in the overall production cost, which could be passed on to buyers starting next year.

Vehicles will need to have an on-board self-diagnostic device to monitor the real time driving emission levels. “The new norms are likely to lead to a marginal increase in the overall vehicle price, with the changes required relatively lower vis-a-vis the previous transition (BS IV to BS VI),” ICRA VP & sector head, (corporate ratings) Rohan Kanwar Gupta noted.

Mahindra & Mahindra president – Automotive Sector Veejay Nakra said, “There would be a marginal to moderate material cost impact both on gasoline and diesel engines on account of these changes.”

Commenting specifically on the passenger vehicle segment, Tata Motors MD, PV, Shailesh Chandra said the company is ready to transition to the next phase in a smooth manner. “I cannot comment immediately but it will not be as drastic as what we had seen in transition from BS IV to BS VI,” he said.

Maruti Suzuki India executive officer, corporate affairs, Rahul Bharti said,”We are on course for BS VI phase 2 transition also. Infact, out of the total 61 applications, we have already transitioned 31 applications to BS VI Phase 2 almost a year ahead of the compliance date. The remaining 30 applications will also be completed within time.”

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