NEW DELHI: The Union Road Transport and Highways Ministry’s most recent safety proposal that would require automakers to mandatorily include airbags for the passenger in the front seat is likely to make four-wheelers, especially in the entry level segment, a fair bit pricier. According to an industry executive, prices of small hatchbacks may increase by Rs 5,000- 10,000.
“At present, base variants of cars such as Alto, Kwid, and Santro follow the current norms of having only one airbag for drivers. The new proposal is aimed at making cars more safer, but it will come with a price. OEMs will have to make the changes in quick time to comply with the new norms,” said a senior executive of an automobile firm.
The ministry’s notification says that vehicles manufactured on and after the first day of April 2021, in the case of new models, and the first day of June 2021, in the case of existing models, should be fitted with airbag for the person occupying the front seat, other than the driver. “The requirement for such airbag shall be as per AIS 145... under the Bureau of Indian Standards act, 2016,” the notification read.
While the new norms are aimed at making car travel safer for passengers, it comes at a time when automakers are looking towards the government for incentives to push demand. Almost all the carmakers have already announced that they would be effecting price hikes for most models in the new year in order to counter the rising prices of raw material and highly volatile exchange rate fluctuations. This move, according to many experts, is likely to lead to a pull back in the recovery that the sector has seen recently.
Making things difficult for manufacturers is the sharp rise in steel prices—a critical raw material for the automobile industry. Steel prices in India have surged 45 per cent since the beginning of this year, while other materials used in automobile manufacturing have also seen a price hike of around 15-25 per cent during the period.
Passenger vehicles, commercial vehicles as well as two-wheelers had already seen a substantial price hike, of as much as 15 per cent, when the new Bharat Stage VI (BS VI) cleam emission norms came into effect from the first day of April this year.