Auto players are upset with the proposed changes to the vehicle testing rules, saying they will be hard to implement. The proposed changes, which mandate selecting 25% of the test vehicles from dealers at random, as opposed to the current practice of selecting all test vehicles only from the factory, are based on the suggestions of the Nitin Gokarn committee report on the General Motors’ (GM) fraud case.
A senior industry executive told FE that there will be several challenges in implementation of the new rules. For one, vehicles picked from dealers by official testing agencies like ARAI already have excise duties paid on them, so a refund mechanism will have to be put in place.
Moreover, dealer cars are usually assigned to a certain customer, who has already paid a booking amount. Such customers may find their wait extended if their car is picked by the testing agencies. Lastly, the industry feels that they will have to write off test cars because they cannot be sold after test agencies return them.
“We welcome the intention of the government, but they seem confused. Sometimes they talk of the US practices, at other times it is about the European system. The government now wants to pick vehicles from dealerships and we have issues with that. We feel there will be many administrative problems,” the official said.
To iron out a new mechanism, the industry association Society of Indian Automobile Manufacturers (Siam) has already held several meetings with officials of the ministry of road transport and highways, where they have communicated their reservations. However, sources say that the changes are inevitable because the government has firmed up its plans.
A road transport ministry official said that Siam had been given 15 days to come up with suggestions and it has now decided to go ahead with the changes. “Earlier, sample cars were collected from manufacturers but now we will collect them from dealers because we have evidence that in the GM case the fraud was done in the factory itself,” he said.
Among other changes to the testing norms, the government will also mandate each manufacturer to