Why Maruti Suzuki Chairman RC Bhargava is critical of govt’s proposed six-airbag rule

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It’s a battle between cost and safety, as far as Maruti Suzuki Chairman RC Bhargava is concerned. The former bureaucrat-turned-businessman recently stated, in an interview with CNBC-TV18, that the entry-level car market, battered by rising commodity and fuel prices, had shrunk by 28 percent. Now, Bhargava is asking the government to reconsider its proposed rule of making six airbags a mandatory offering for all vehicles.

Although no country across the world has mandated six airbags as a standard feature across all cars, India’s road fatality statistics suggest that stern measures need to be taken to ensure driver and passenger safety. According to a report by the World Bank, India accounts for 11 percent of global deaths in road accidents, despite having only one percent of the total number of cars.

According to Bhargava, the consequences of the airbag rule could be harmful in different ways. With the domestic small car industry, of which Maruti Suzuki is the undisputed market leader, already affected by the switch to BSVI, among other things, increased costs due to six airbags could drive away a vast majority of the buyers. The exact amount of increase in the overall ex-showroom price varies. While Bhargava claims it could add around Rs 20,000 to 25,000 to the overall cost, an analysis by auto market analyst JATO Dynamics states that the price rise is around Rs 17,600. However, it’s not as simple as that since several small cars will need structural changes to accommodate airbags, that could further add to the costs. These include changes made to the body shell, along with interior fitments installed to ensure the timely deployment of airbags. Add to that the cost of making cars flex-fuel compatible, and there’s plenty there to deter a first-time car buyer. With the government’s target of making all cars E20 (20 percent ethanol mixed with petrol) compatible, costs could go further up by Rs 18,000 to Rs 25,000 with changes having to be made to cylinder heads, injectors etc.

While six additional airbags could help tremendously in mitigating road fatality rates, Bhargava argues that the added costs will keep aspiring car buyers from graduating to four wheels from two wheels – a category that comes with no mandatory safety measures other than ABS. Bhargava’s contention is that, from a purely statistical point of view, on-road fatalities for four-wheelers might come down, and the fatality rate for two-wheelers will come up. At present all cars must have a driver and passenger airbag as standard, which is common in most countries. Maruti Suzuki, which has been criticised over the years for its low crash safety ratings, has taken cognizance of this matter and has begun offering its newly launched, updated cars with 4-6 airbags, albeit as optional extras found in the top trims. The newly launched Baleno gets six airbags, in Zeta and Alpha trim, much like the newly launched XL6 while the Ertiga gets four airbags (for now). According to the government, the six-airbag rule will go into effect by October this year.

Some of the most affordable cars sold by Maruti Suzuki India include the Alto, Celerio and the S-Presso, all of which routinely feature on the best-selling list of cars per month despite the recent addition in cost. In the month of May 2022 alone, the Wagon R along with the Alto, Ertiga, Swift and Baleno remained the top sellers. With the exception of the Ertiga, no car offers more than two airbags as standard. In fact, with the exception of the Tata Nexon (which has seen a jump in sales, in part, because of its safety rating) and the Hyundai Creta, all the cars on the top 10 bestseller list have been Maruti Suzuki cars, something that Bhargava fears will change with the implementation of the six-airbag rule. However, apart from affordable service costs and a wide service network, Maruti Suzuki is one of the few brands to offer factory-fitted CNG compatibility in cars like the WagonR, Ertiga, Alto and Celerio. In fact, Maruti Suzuki has the most extensive CNG portfolio that is likely to hold it in good stead despite the rise in costs due to airbags. According to data shown by MoRTH, total road deaths from 2011 to 2018 have only increased going up to 151.4 k deaths in 2018, as compared to the 147.9 k deaths in 2017. In 2020 the number dropped to 133,000 with cars accounting for 13 percent of total deaths.