BS-VI transition will make rest of the year difficult for auto industry: SIAM

Auto industry body SIAM on Wednesday said the industry, which has been reeling under a prolonged slump, is staring at a difficult road ahead for the rest of the year due to transition to BS-VI emission norm from BS-VI by April 2020.

Terming it as a "huge challenge", Society of Indian Automobile Manufacturers (SIAM) President Rajan Wadhera said on an average each vehicle manufacturer is spending close to ₹1,000 crore to upgrade all of their model line-up to meet the new emission norm within a short span.

"The auto industry, as we all have seen in the past eight months, has witnessed continuous de-growth and August being the worst at 30%," Wadhera said, while speaking at Federation of Automobile Dealers Associations (FADA) annual auto retail conclave.

He further said the entire value chain of the auto industry - from component suppliers to vehicles manufacturers and dealers - have been impacted by the slowdown.

"The road for the rest of the year is also looking difficult because there is a huge challenge of migration from BS-IV to BS-VI is awaiting us," Wadhera said.

New technologies coming into vehicle, which has to be done "in a span of three years across all models and have defect free products is a huge challenge", he added.

"On an average an OEM is spending about ₹1,000 crore to upgrade their product portfolio," Wadhera said.

In order to ensure a smooth transition, he said, "Sales forecasting and operational efficiency has become important on account of the upcoming BS-IV to BS-VI transition".

While the dealers will be managing the front-end, OEMs (original equipment manufacturers) need to ensure that there should neither be loss of sales on account of unavailability of products nor allow inventory build up or write-off which will create more hardships for the dealers, he added.

In the near future, Wadhera said the auto industry will not only have to deal with slowdown and BS-VI transition, but also has "actually prepare for the future mobility" - electric, connected and autonomous.