Earlier this year, the Department of Transportation said it will oblige car manufacturers to supply a minimum of six airbags in motor vehicles from October this year that can carry a maximum of 8 passengers for improved occupant safety.
In an interaction with PTI, MSI President RC Bhargava said that the cost of entry-level cars has already risen sharply due to the implementation of various regulatory standards in recent years, including the BSVI emissions regime of 1 April 2020.
As prices rise, sales of small cars are particularly affected in non-metro markets across the country, the veteran industry leader said.
He warned that with the implementation of the six airbag scheme, prices will continue to rise, leading to further shrinkage of the domestic small car industry.
“So, the fear is that through this (six airbags) the market will get smaller. The car manufacturing sector is important because it is a big creator of employment. When the car sells in the market, it creates a lot of jobs – drivers , maintenance, repairs, accessories etc., “said Bhargava.
He added: “If the car market does not grow as it has in the last three years, it will have a negative effect on job creation and economic growth.”
When Bhargava was asked how much the price of cars could go up due to the addition of airbags, Bhargava said: “I’m not sure, but it could be in the range of Rs 20,000-25,000, what for a small car buyer a a lot of money. ”
He noted that there were not many countries around the world that might have implemented such regulations.
“I think we’ll be among the first countries to do that … so we in the industry think it’s not the right time to introduce six airbag regulations. We would like the government to reconsider this matter, “said Bhargava.
According to the government, the airbags will ensure the safety of passengers in all segments, regardless of the cost / variant of the car.
According to the latest government data, in 2020 a total of 1,16,496 traffic accidents occurred on national highways (NHs), including highways, in 2020, causing 47,984 deaths.
While acknowledging that airbags help save lives in the event of a traffic accident, Bhargava noted that the cost increase due to the scheme will, however, discourage many riding two-wheelers from upgrading to entry-level cars.
“Driving a two-wheeler is safer every day than driving a car. So, overall deaths from car accidents can come down. While the chances of deaths in the two-wheeler can go up. So, generally if there are advantage is in all this it is a matter of thinking, “he said.
The case needs to be looked at in total, Bhargava noted.
He stated that the impact on small cars is more compared to larger cars as the costs go up.
“That’s what happened and now we will have these extra costs of extra airbags again, so the industry has expressed an opinion that the market for the small cars will be further smaller,” said Bhargava.
He noted that with a hit on the affordable factor, small car decline is shrinking in the smaller cities, towns and countryside, while the market for expensive cars in urban centers went up across the country.
MSI is the dominant player in the hatchback segment with a market share of more than 70 percent. It sells models such as Alto, S-Presso, and Celerio, among others, in the vertical.