New safety, emission norms will make petrol cars costlier by at least Rs 40,000

New cars will cost a lot more than today when the industry adopts more than half a dozen changes such as mandatory fitment of passive and active safety features and emission related costs in the vehicle.

The automobile industry expects such safety features and upgradation to new emission norms will push up vehicle costs by at least Rs 40,000 on petrol cars and Rs 80,000 on diesel cars by April 1, 2020.

Raw material prices and forex-related cost escalations are likely to make cars dearer by another Rs 20,000 -- considering an annual average car price rise of about 1.5 percent. Hence, in the three years to 2020, the effective price rise may be as high as Rs 50,000 considering this parameter alone.

Carmakers will have been mandated to fit in air bags, anti-lock braking system, high speed alert mechanism, reverse parking assist and seat belt reminder in all cars produced after July 1, 2019. The move is part of the government's aim to curb fatalities caused in road accidents.

As per government data more than 140,000 people die on Indian roads every year in cases of vehicular accidents which is 400 times the number of deaths the country witnessed in terrorism-related cases in 2016. In about 78 percent of such cases, the accident was caused due to driver’s fault.

Airbag Protection

While some carmakers offer dual front airbags (for driver and passenger)  as standard across all variants on some models, airbag protection will become mandatory for all variants of every model sold in India less than two years later. Each airbag fitment, along with wiring harness, costs around Rs 10,000.

While Bharat NCAP (New Car Assessment Program), the India equivalent of Europe's Global NCAP of Europe, will lay guidelines for crash testing of vehicles, the government has formed instructions for passive safety such as reverse parking sensors. Such fitments will cost a minimum of Rs 1,000, whereas a unit equipped with camera and display will cost around Rs 8,000.

Speed Check

To curb overspeeding, carmakers will have to install speed alert system warn the driver once the car travels faster than 80 kmph. This system won't limit speed of the vehicle.

“The speed alert system shall be designed in such a way that the warning signal cannot be stopped by means other than control of the speed by the driver,” a notification from the government stated.

BS VI Blitz

Perhaps the biggest increase in costs will come in 2020 when the industry switches to Bharat Stage VI. Research and rating agency ICRA expects prices of petrol cars to go up by Rs 20,000-30,000 and that of diesel by Rs 80,000-100,000.

The pricing gap between petrol and diesel cars will rise with the onset of BS-VI as upgrading a compact diesel-powered car will be much more expensive than upgrading a petrol-powered small car. At present the difference between the two options is Rs 80,000-100,000.