A lot is going to change in the next one year and if you are planning to buy a new car or an SUV get ready to pay more starting April 2020 with the new emission norms setting in. The Indian government has been bullish on implementing new rules to reduce pollution and emissions from vehicles.
As we enter the festive season, we will see an array of new cars and SUV launches in the next 3 months and gradually into the latter half of 2019 the new launches will phase out as the carmakers gear up to develop and make BS-VI emission compliant vehicles that will see its implementation starting April 2020. Every automaker is currently investing heavily to meet the BS-VI criteria set by the Government and ordered by the Supreme Court.
At several occasions, Dharmendra Pradhan, Minister of Petroleum & Natural Gas has confirmed that the BS-VI compliant fuel will be available across the country by April 2020 and as early as April 2019 in Delhi/NCR. Oil companies have invested over Rs 70,000 crore to upgrade its oil refineries to make BS-VI compliant fuel. To reduce its emissions, Indian will be the first country to adapt to Euro 6 equivalent BS-VI emission norms by leapfrogging and skipping the BS-V completely. This will incur some big investments to roll out new vehicles that will work well with lesser polluting fuel.
So what is in it for the new car/SUV buyer and consumer? Product planning for any carmaker is a continuous process, every company invests in making new products and the cost is anywhere between Rs 1000-1500 crores depending on the make. Making all the existing models compliant to BS-VI norms is also a huge investment and will see the cost of new cars and SUVs going up by up to Rs 1 lakh for diesel-powered vehicles and about 60,000-70,000 for a petrol driven vehicles.
Dr Pawan Goenka, Mahindra and Mahindra confirmed that the shift to BS-VI norms will cost Mahindra Rs 1,000 crore which is less than the development of an all-new vehicle. But, the cost to suppliers and auto component manufacturers will be a lot, this will result in the cost of the vehicle going up and as a result, the consumer will have to pay more for a new car/SUV.
In an interview to Express Drives, Shekar Viswanathan, Vice Chairman & Whole-time Director, Toyota Kirloskar Motor had confirmed that the entire Toyota fleet will be BS-VI ready ahead of the April 2020 deadline but also said that cost of the cars will go up with the new emission norms and the company will pass down the cost burden to customers.
The company says it is on track to roll out its BS-VI compliant vehicles in India. It is very confident on the availability of BSVI compliant fuel in India by April 2020. However, the cost of the cars will go up with being BSVI compliant and the company will pass down the burden of new costs to its customers. While Toyota did not officially confirm this, it's widely known that under the partnership Suzuki will provide Toyota with two vehicles in return from one, which is expected to be slightly more premium.
For a price sensitive market like India, it is likely that the car sales might take a small dip with BS-VI coming in. Expert says that while it might not be a major slowdown, the buying decision might be put on hold just to get used to the market conditions. We also don't expect a major pre-buying in 2019, unlike the lack of clarity during the shift to BS-IV norms that saw banning of sales of two-wheelers and Commercial vehicles in April 2017, that saw automakers reporting major losses and selling its products with heavy discounts, the industry is now ready and it is very clear that it will not be allowed to manufacture BS-IV vehicles post April 2020.
Existing old cars that are not BS-VI compliant will have a grace time of two months till June 2020 for its sales and commercial vehicles can be sold till September 2020.
Now it's up to you to decide if you need to save that extra Rs 70,000-1 lakh and drive a BS-IV compliant car or take a step towards lesser emission cars and SUVs and buy a new BS-VI compliant car/SUV in India that is more healthy for the environment.