Auto component makers, especially those engaged in engine technology and emission-related machine parts, have opposed the postponement proposal for the next generation emission norms that kick in from 2022.
Corporate Average Fuel Economy (CAFE) and Real Driving Emission (RDE), which are embedded in Bharat Stage-VI (BS-VI) emission system regulations, are part of the government’s efforts to reduce vehicular carbon footprint.
These norms entail further investments, which is making the financially-battered vehicle makers seek a deferment of its implementation date.
SIAM seeks postponement
On September 4, outgoing president of the Society of Indian Automobile Manufacturers (SIAM), Rajan Wadhera, appealed to the government to put the new norms on hold. He was speaking at the 60th annual general meeting of SIAM, in which Union Minister for Road Transport and Highways Nitin Gadkari was among the three guests from the government who were invited for the virtual meet.
According to sources, SIAM requested the government to defer the new norms by two years, stating that it will be impossible for vehicle manufacturers to recoup the investments made for BS-VI before 2022, given the impact of the lockdown measures. The government has not responded so far.
Estimates suggest that the auto industry invested close to Rs 80,000 crore in switching to BS-VI from BS-IV, 40-50 percent of which was done by the component industry.
What are CAFÉ, RDE norms?
CAFE norms propose improvement in fuel efficiency by 10 percent or more by 2021-end, before reaching a 30 percent target from 2022.
Under CAFE, a car’s mileage will be decided on the amount of fuel it consumes for running 100 km. To be sure, CAFE 1 norms are already in practice. CAFE 2 norms are to be brought into practice in 2022.
RDE is the most preferred emission regulation method in the world since it is aimed at reducing the gap between type-approval emission, which occurs during the certification (homologation) testing phase, and those in the real world.
Girish Ramaswamy, Head of System Engineering, Vitesco (Part of Continental AG), opposes the deferment of norms.
Speaking to Moneycontrol, he said: “We introduced BS-VI and did that in a record time, simply because we skipped BS-V. BS-VI is a huge step because we are now in line with the global emission trend, after having wiped out the lag of 3-4 years. Whatever we produce today, there is an enormous amount of opportunity to sell these vehicles outside India. Now, if there is a demand for deferment by two years, we will miss this opportunity”.
ACMA also wants relaxation
The Auto Component Manufacturers Association (ACMA), the apex lobby body of parts manufacturers, has joined SIAM in seeking a relaxation in the timelines for the new norms.
Speaking to PTI, Deepak Jain, President, ACMA, said: “Regulations will keep on coming, so we have asked for a breather to recalibrate what are the most requisite regulations”.
But component makers believe that investments for the new norms would be just 10-15 percent of the investments made for the BS-VI changeover and should not be a problem for the industry.
“CAFE 2 is a kind of marginal step where the technology of BS-VI is already available and we need to tinker it a bit but not to the extent of changeover from BS-IV to BS-VI. If you have to compare, only 10-15 percent of effort is involved. Most companies, which are part of ACMA, have made investments towards it and we are ready to support the OEMs,” a component maker said.
While the government is believed to have contemplated enforcing the RDE norms much before April 1, 2020 (which is when BS-VI was introduced), the auto industry requested the Ministry of Road Transport and Highways to implement the norms only after BS-VI fuel was made available throughout India.