Car prices in India to shoot up next year. Know why

Passenger and commercial vehicle prices are expected to increase as automakers are planning to invest in upgrading the models to meet stricter emission norms that are about to get implemented in April next year. According to a PTI report, the Indian automobile industry is working on its products to make them meet the second phase of Bharat Stage VI (BS VI) norms which is equivalent to Euro-VI emission norms.

To meet these new standards, sources in the automotive industry are expecting an increase in the overall production cost which could lead to a rise in the price of Four-wheeler passenger and commercial vehicles. These vehicles will need more sophisticated types of equipment like an onboard self-diagnostic device to monitor the real-time driving emission levels. This equipment will keep a check as the catalytic converter and oxygen sensors to regularise emissions.

In any case, if the emissions exceed the standard parameters, the device will indicate through warning lights that the vehicle needs to be submitted for service. In order to control the level of fuel burnt, the vehicles will also have programmed fuel injectors, which would control the timing and amount of fuel injected into the petrol engine.

Semiconductors that are used in the vehicles will also be upgraded to monitor throttle, crankshaft positions, air intake pressure, the temperature of the engine and the contents of the emissions from the exhaust (particulate matter, nitrogen oxide, CO2, Sulphur). ICRA Vice President & Sector Head, (Corporate Ratings) Rohan Kanwar Gupta said in the report, “The new norms are likely to lead to a marginal increase in the overall vehicle price, with the changes required relatively lower vis-à-vis the previous transition (BS IV to BS VI)." Gupta, however, added that as OEMs have been forced to take price hikes to counter inflation over the past 15 to 18 months, any further rise in the price of the vehicle could have a moderating impact on demand to an extent.