Updated on 11 September, 2019
The Indian truck industry, which has been hit by the current economic slowdown, is likely to bounce back to growth by 2021.
Transition to BS-VI
- From 2014 to 2018, the sale of trucks more than doubled to 3.78 lakh units from 1.8 lakh units. However, from 2019, truck sales have been on the decline, due to several factors such as:
- Implementation of new axle norms
- Liquidity crunch
- The switchover to BS-VI norms.
- Year-to-date, the Indian truck industry had sold 1.94 lakh trucks, a drop of 24% compared with the January-August 2018 period.
- The market dipped in 2019 and will remain low key in 2020. As per the analysts, the sector is likely to witness 20-25% dip in 2019 (2.7 lakh units to 2.9 lakh units) and a 15% decline in 2020 (2.3 lakh units to 2.5 lakh units). The year 2021 would see a growth of 15% (2.7 lakh units to 2.9 lakh units).
- The implementation of a scrappage policy would go a long way in arresting the decline. But, it called for the setting up of an authorized scrap center with a mechanism to trade in scrap certificates.
- Non-availability of BS-VI fuel was a major concern while pushing sales, DICV had urged oil companies to ensure that the fuel was made available from April 2020 onwards.
What are Bharat Stage norms?
- DICV had invested Rs.500 crore to localize its Euro VI technology for India, completed two million kilometers of testing, developed new facilities and 1,000 new parts, and had achieved localization of more than 80%.
- India would become the global export hub for DICV’s BS-VI trucks and buses.
- Depending upon the availability of BS-VI fuel in India, DICV would officially launch an upgraded range of trucks and buses during the first quarter of 2020.
Differences between the two stages
- The Bharat Stage are standards instituted by the govt to regulate the emission of air pollutants from motor vehicles. The norms were introduced in 2000. With appropriate fuel and technology, they limit the release of air pollutants such as nitrogen oxides, carbon monoxide, hydrocarbons, particulate matter (PM) and sulfur oxides from vehicles using internal combustion engines. As the stage goes up, the control of emissions becomes stricter.
- Thus BS-VI norms are two stages ahead of the present BSIV norms in regulating emissions. These norms are based on similar norms in Europe called Euro 4 and Euro 6.
Impact on Automakers
- The extent of sulfur is the major difference between Bharat Stage IV and Bharat Stage VI norms. BS-IV fuels contain 50 parts per million (ppm) sulfur, the BS-VI grade fuel only has 10 ppm sulfur.
- BS-VI can bring PM in diesel cars down by 80%. The new norms will bring down nitrogen oxides from diesel cars by 70% and in petrol cars by 25%. BS-VI also make on-board diagnostics (OBD) mandatory for all vehicles.
- OBD device informs the vehicle owner or the repair technician how efficient the systems in the vehicle are.
Impact on Buyers
- Compliance with BS-VI norms will require higher investment in technology to upgrade vehicles in stock and making new vehicles. This will also mean fewer launches until the deadline.
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- Those who buy Bharat Stage VI-compliant vehicles will have to pay more since such vehicles will cost automakers more and they will pass on the additional cost to the buyers. The Bharat Stage VI-compliant fuel too will be more expensive.
- Oil companies have already begun selling fuel complying with new emission standards in Delhi. The companies are working on meeting the instruction by the Supreme Court to make available BS-VI fuel to 13 metro cities besides the national capital region by April 2019.
- State companies don’t plan to recover the incremental cost incurred in producing higher grade fuel from customers immediately but may do so after April 2020 when the BS-VI petrol and diesel begin selling across the country.