The automotive industry wants the government to offer it tax incentives, make available better grades of fuel in the country and put in place advanced traffic management systems before imposing any fuel efficiency measures on vehicles sold.
Some companies have also called for carbon-dioxide emission curbs similar to Europe’s instead of measuring efficiency in km per litre.
On Tuesday, the first meeting of the stakeholders to set fuel efficiency standards for the automobile industry will take place in the Capital.
The automotive industry’s reaction to this development is guarded since it’s not clear how the government will go about imposing these norms.
“Since at this juncture the picture is not clear, it is difficult to estimate the R&D-related costs involved,” said Arvind Saxena, vice-president, marketing, at Hyundai Motor India Ltd. The company didn’t reveal the costs it incurred while making its cars comply with the government’s current emission norms that came into effect in 2005.
People familiar with the government agencies’ plan said the fuel-efficiency norms could either be based on vehicle weight or engine size.
“If the objective is to reduce fuel consumption in the transportation sector, then there is a need for a comprehensive approach,” said Dilip Chenoy, director general of the Society of Indian Automobile Manufacturers, an industry body. “This has to include in-use vehicles, traffic management, enforcement of regulations regarding over crowding and overloading, quality of fuel, fuel adulteration and road tax,” he added.
An estimated 90 million vehicles ply on Indian roads and there are questions whether these would also be included in the fuel efficiency norms. About 10 million vehicles are added to the roads every year.
“In our view, we have reached a consensus—what should be mandated is carbon-dioxide emissions since sustainability and global warming are impacted by carbon dioxide,” said Pawan Goenka, president (automotive) at Mahindra & Mahindra Ltd, India’s largest utility vehicle maker.
“We also need to consider the different types of fuels that are available across India,” said Saxena. In April 2005, the shift from Bharat Stage-I to Bharat Stage-II norms for emission standards had run into trouble with several states such as Punjab and Uttaranchal having to postpone the implementation since the required grade of fuel was in short supply.
“The track record of India (in enforcement of norms) is not very good,” said Asvin Chotai, Asian automobile market analyst with consultancy firm Global Insight. “In Europe, people are going for smaller cars—can’t do much more (of that) in India.”
Some auto industry executives such as Toyota Kirloskar Motor Pvt. Ltd’s deputy managing director K.K. Swamy and TVS Motor Co.’s chairman and managing director Venu Srinivasan want incentives to implement these norms.
“I think norms need to be in place for emissions and efficiency,” Srinivasan said. “But those who exceed the norms should be rewarded, say with lower value-added tax. In other countries, hybrids have lower taxes. We should also have similar incentives,” he added.