Citing low car affordability and industry growth, Maruti Suzuki chairman RC Bhargava has requested for the emission norms, set for April 2022 implementation, to be postponed.
There is growing opposition to the introduction of CAFE (Corporate Average Fuel Efficiency) emission II norms in India from April 2022. The latest salvo has come from RC Bhargava, chairman of Maruti Suzuki India, the country’s passenger vehicle market leader.
Auto industry growth in negative during COVID-19 period
SIAM urges postponement to April 2024
CAFE norms came into effect from April 1, 2017
“Not the right time for implementation”: RC Bhargava
Speaking to PTI, R C Bhargava, chairman of Maruti Suzuki, said: "I don't think it is the right time (to implement) the new stage of CAFE norms. Over the years, the price of the cars has been going up. Now the price has gone up so much that people are not able to afford cars, so the growth of the industry has come down to zero. To further increase the cost, especially when the income of people has not grown during the Covid period, the industry will further go down.”
"Customers have been unable to buy (cars) at the same rate now because the customer affordability has gone down. Two-wheeler sales are growing because people can only afford a two-wheeler," added Bhargava.
Maruti Suzuki’s chairman pointed out that the domestic auto industry has been reeling under a slowdown even before the pandemic struck.
"SIAM has done a study that up till 2010, the growth of the Indian car industry was at 12.9 percent annually. From 2010-2015, it dropped to 5.7 percent and 2015-20, and that is before Covid, it dropped to 1.3 percent. During the Covid period, it has become negative," Bhargava said.
CAFÉ norms Phase II: an overview
In March 2021, Transport Minister Nitin Gadkari discussed postponing CAFE Phase II norms with a SIAM (Society of Indian Automobile Manufacturers) delegation, which has urged postponement of implementation of CAFE Phase II regulations to April 1, 2024. SIAM said that the domestic automotive industry is still recovering from the impact of COVID-19 and slow consumer demand. The apex industry body is yet to hear from the government on whether the CAFE Phase II April 2022 plan will be deferred.
The words ‘Corporate Average’ in CAFE means the weighted average of sales volumes for vehicle manufacturers. CAFE standards are applicable for vehicles running on petrol, diesel, CNG and LPG.
CAFE norms came into force in India from April 1, 2017. In Phase 1 (2017-2022), CAFE norms require average corporate CO2 emissions to be less than 130 gm/km by 2022. Concurrently with BS6, to meet the CAFE targets, manufacturers need to find efficient and clean powertrain options. In Phase II (2022 onwards) – this stands reduced to less than 113 gm/km and could be further tightened to 108 or 104 gm/km.