BackAuto industry agrees to govt’s BS-VI timeline
In return, the industry seeks availability of BS-VI fuel across India at once and scrappage of BS-I, II, III vehicles
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New Delhi: In what could help India combat vehicular pollution, the automobile industry on Thursday agreed to skip one stage and move straight to Bharat Stage-VI (BS-VI) emission norms from 2020.
In return, it sought assurance that BS-VI fuel would be available across India at once, unlike a partial roll-out of BS-IV fuel, which is only available in top 50 cities even after five years of India accepting that standard.
It also asked the government to scrap vehicles that comply with older BS-I, II, and III norms as well as even older ones that do not comply to any norms at all. This would result in an increase in demand for vehicles that comply with BS-VI norms.
Nitin Gadkari, the minister of road transport and highways, and chief executives of about 26 automobile firms met Thursday.
“We had a discussion on the challenges that we are facing. One of the key concerns is apart from the technology road map, the success of this proposal is dependent on fuel availability. The fact is a BS-VI vehicle cannot run on any other fuel (but a BS-IV vehicle can run on BS-VI fuel)," Sumit Sawhney, managing director and chief executive officer, Renault India Pvt. Ltd, said in a phone interview.
According to a government official, who spoke on condition of anonymity, Gadkari informed the companies about India’s programme to bring down pollution at a national scale.
“CEOs were told that the matter has become very sensitive, and judiciary is also very active in this area. Since the prime minister himself is concerned, it will be good if industry complies with the proactive measures and supports the government," said the official, adding that industry representatives did not raise objections about moving to the BS-VI norms directly but sought more time to do so.
Earlier on Thursday, at a press conference, Gadkari argued that Indian companies exported 2.5 lakh cars in 2015, of which 1 lakh units complied to BS-VI norms.
“If they can export such cars, why can’t they make for India?" Gadkari asked.
According to the CEO of an automobile company who asked not to be identified, the minister was not in a mood to compromise.
“His point is: I am doing a lot for you guys (in terms of road building and infrastructure development) and in return, you will have to step up on these issues," this executive said. “He assured us that the oil ministry will be ready with BS-VI fuel by October 2019, across the country."
While there is not much difference in the quality of BS-V and BS-VI fuel—the sulphur content is nearly the same—moving to BS-VI directly requires a significant technology upgrade and additional investments by the auto industry.
The decision to graduate to BS-VI—the immediate motivation appears to be the poor air quality in Delhi—will make cars, sports utility vehicles (SUVs), trucks and buses more expensive. Auto companies and parts makers doubted whether they would be ready in time.
“If there is a regulation, that comes tomorrow and says, we need to do it, the industry will try its best to do it. Whether we will be successful or not...(we) can’t say today," Vinod Dasari, managing director of Ashok Leyland and president of Society of Indian Automobile Manufacturers, said. “Let me also say: European and American technologies simply cannot be applied in India. It’s not that simple. Indian driving conditions are different."
It is estimated that auto firms, parts makers, and oil refiners will end up spending anything between ₹ 70,000 crore and ₹ 90,000 crore on the change.
“My guess is investments required will be ₹ 50- ₹ 100 crore for each model to upgrade to BS- VI norms," said Pawan Goenka, executive director, Mahindra and Mahindra Ltd.
Goenka’s firm, along with Tata Motors Ltd, are the companies impacted most after Supreme Court banned until 31 March the registration of vehicles with more than 2,000cc-capacity diesel engines in Delhi.
The auto CEO mentioned in the first instance said that graduating to the BS-VI norms is a big issue for the Indian manufacturers, as they are not technologically advanced as their global peers.
“How you re-engineer your entire portfolio is a big challenge. It is technically doable but requires a lot of money and innovation," this person added.
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