Transition to BS6 will hit vehicle demand

Kenichi Ayukawa, managing director and CEO, Maruti Suzuki said that there may be fluctuations in supply chain due to the shift to BS6 engines in the Indian auto industry. It will soften demand for cars, cautioned Kenichi Ayukawa, “Let us accept, during this transition we may experience fluctuations and even some contraction in demand…It may take a little time, till BS6 becomes the new normal for the customers,” Ayukawa said at the BS6 conclave in New Delhi.

Kenichi Ayukawa, MD and CEO, Maruti Suzuki
Kenichi Ayukawa, MD and CEO, Maruti Suzuki

“Worldwide, the transition has been in phases first from Euro 4 to Euro 5, subsequently to Euro 6. He said the shift is one of the biggest, boldest and fastest for any nation to leapfrog from BS4 to BS6.

Maruti is said to be ahead of the deadline for BS6 transition i.e April 2020. however, due to such technological interventions come with additional investment, which will make cars pricier. According to estimates, diesel cars are expected to get dearer by up to Rs 1 lakh while petrols will get pricier by about Rs 25,000.
He also called for speedy availability of BS6 fuel, saying, “the real impact of BS6, will come only if BS6 fuel is available across India.” and mentioned that it will be key to ensure customers are aware of the significant benefits of this shift.

 

Ayukawa  also called for government intervention to revive consumer sentiment saying, “some GST relaxation will go a long way to bring back sales on track.” At present, a rate of 28 percent GST is levied on passenger vehicles.