Mumbai: The government’s decision to move directly to stringent BS-VI norms by April 2020, four years ahead of the earlier schedule, is likely to make diesel vehicles costlier as compared to their petrol variants and may deter demand for diesel vehicles.
While the cost of petrol passenger vehicles is expected to increase by Rs 20,000- Rs 30,000 per vehicle, the increase for diesel passenger vehicles could be in the range of Rs 75,000- Rs 1 lakh per vehicle, rating agency ICRA said on Monday.
For medium and heavy commercial vehicles, the cost differential is expected to be Rs 1 lakh to Rs 1.5 lakh, the rating agency added.
While the availability of technology is not an issue, the key challenge bef-ore original equipment manufacturers (OEM), according to the rating agency ICRA, would be to adapt the available solutions to Indian market conditions in a relatively short time frame, in a cost-effective manner.
“Further, given the past experience with respect to delays in the availability of BS-IV compliant fuel, the availability of cleaner fuel by 2020 on nationwide basis may also become a bottleneck. Our interaction with industry participants suggests that investments by OEMs are unlikely to be sizeable to meet BS-VI norms; however, OEMs with higher dependence on diesel models may accelerate their focus on petrol segment, while hybrids and other clean technologies would take centre stage in their R&D plans,” the rating agency said.
Overall, the proposed emission standards will push vehicle prices upwards with diesel segment likely to witness sizeable cost increase due to introduction additional components. At present, two and three wheelers in India follow BS-III emission norms, which are expected to move to BS-IV by April 2017.
