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Double standards continue...
The decision to switch to Bharat IV norms was taken years earlier. One wonders why vehicle manufacturers should not have worked towards this target well ahead.

Despite the slow growth of the economy, passenger vehicle sales were at a record 30.46 lakh units in 2016-17. This marked a growth of 9.2 per cent in the domestic market. Maruti Suzuki maintained its high market share at 47 per cent followed by Hyundai Motors at 17 per cent and Mahindra & Mahindra at 8 per cent.  Even Tata Motors that has been losing market share in recent years reported good reception to its two new launches - Tigor and Tiago - and seems to have overtaken Honda cars to gain the fourth position.

Sales of commercial vehicles also grew by 4.2 per cent to 7.14 lakh units. Sales of two-wheelers showed an increase of 6.9 per cent to 17.6 million vehicles. 

Industry captains are understandably ecstatic over this record. The doyen of component manufacturers, Suresh Krishna, enthusiastically referred to India racing to a production volume of ten million cars in quick time. 

All this is encouraging. However, related to the hiccups of the industry to switch over to the Bharat IV norms; it is disappointing. Look at the lament of the Director General of the Society of Indian Automobile Manufacturers (SIAM) on  the inventory of 1.2 lakh vehicles, compliant with the old BS III emission norms worth Rs 5000 crore piled up with the manufacturers and dealers. SIAM estimated the revenue loss of around Rs 1200 crore and said that the industry required a ‘predictable and consistent policy environment.’

 

Industry opted for minimal standards

I am intrigued at this lament. Look at the evolution of standards: Indian manufacturers have been opting for minimum standards. For decades from the 1950s the Bureau of Indian Standards (BIS) used to be dependant on the expertise of multinationals to set the standards for various industrial products. These took care to opt for the minimum. A number of manufacturers did not bother even to opt for these. 

I recall the instance when D C Kothari was the chairman of the Indian Standards Institution and was bidding for election as President, International Standards Organisation. At the press meet I raised the question of how many of the nearly 50 products manufactured by his group had the ISI mark. An embarrassed DC admitted none, but, nonchalantly responded: “there are standards and standards. ISI prescribed the minimum standards. My products are way ahead of these. If I put ISI mark there will be the perception that my standards have fallen.” Of course, he was elected President, ISO and continued to harangue on the virtues of standards. 

BS IV norms are way below the Euro standards. The decision to go for BS IV was taken months ahead. In December 2016 the Supreme Court rejected vehicle manufacturers’ plea to extend time for implementation. Still, production to old standards continued. The manufacturers again approached the Supreme Court.  On 29 March the highest court again rejected their plea and rightfully so.

Alert two-wheeler manufacturers, worried over the cost involved in recalling 6.8 lakh vehicles, refitting these and sending back to the market, offered hefty discounts and liquidated bulk of the stocks. Manufacturers of cars and commercial vehicles did not exert overmuch and now complain of the loss and the plan to shove off the BS III vehicles to export markets compliant with old BS III emission norms. 

 

Why they continued production to BS III standards?

The decision to switch to Bharat IV norms was taken years earlier. One wonders why vehicle manufacturers should not have worked towards this target well ahead. Of course it may have involved higher expenditure in terms of better engine design, exhaust system, catalytic converters, etc... but they could afford it and perhaps could have recovered the higher costs through higher prices. Frequent upward revision of car prices, despite competition, is not uncommon in the Indian market. 

Four decades ago when the Hindujas acquired control over Ashok Leyland, the company chairman expressed his intent to upgrade the quality of commercial vehicles to global standards: “our vehicles would compete for custom in G8 countries,” he assured. Though it was slow in coming, liberalisation and globalisation provided the trigger. There has been welcome thrusts on R&D with large vehicle manufacturers employing engineers and scientists in thousands to upgrade constantly the quality of vehicles. Yet one finds in most of the heavy vehicles produced in the country vast lags in the quantum of electronics, fuel efficiency and emissions, compared to Europe, Japan and the US. This despite the comfort of increased volumes.

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