Government of India would implement BSV and BSVI emission standards across the country in the next two to eight years. These stricter emission standards, which are equivalent to EURO 5 and EURO 6, will lead to increase in prices of small diesel cars on offer in the country.
In order to adhere to these new emission norms, car manufacturers will need to make changes in their diesel cars which will entail added expenses thereby pushing the prices up significantly. Diesel engined vehicles will need to be upgraded with Diesel Particle Filter and Selective Catalytic Reduction to comply with the upcoming norms.
With more such emission reducing technologies on board, an average diesel car in India is estimated to get dearer by INR 65,000 to 1 lakhs. In fact, each time emission standards are increased, diesel car prices in India is expected to increase by INR 30,000-50,000. This will definitely affect sales, and the auto industry in general.
However, despite these emission norms coming into effect, it will not have any major effect on petrol engined vehicles for the fact that they are simpler where technology is concerned and would require only minor adjustments and ECU changes to achieve reduced emissions. The cost increase is estimated to be around INR 7,000 – 11,000 which is marginal compared to the case of the diesel engines.
It is with this in mind that major automakers in India have shifted focus to petrol engine vehicles. Tata Motors and Mahindra & Mahindra have already started showing greater emphasis on petrol vehicles while other automakers are expected to follow suit.