New regulations to boost profits for auto parts companies
Equipment

New regulations to boost profits for auto parts companies

Manufacturers of automotive components have benefited greatly from the enormous trend toward electrification and the forthcoming slew of safety and emission regulations. According to top executives at auto component companies the new regulations and the trend toward electrification are resulting in an increase in the amount of content per vehicle, thereby increasing their revenue and profitability.

According to Ashwath Ram, Managing Director, Cummins India, businesses like Cummins have succeeded and managed to increase business with every automaker whenever emission standards have become stricter and fuel economy regulations have become more stringent. Beginning on April 1, the auto industry in India will switch to Bharat Stage VI-B emission standards. By the beginning of the following fiscal year, manufacturers of passenger vehicles would also be required to share with the government their corporate average fuel economy (CAFE-II) scores.

Companies must also comply with RDE (Real Driving Emissions) regulations in accordance with BSVI-B standards. Because vehicles will require new components, this is likely to result in an increase in prices across all categories. According to Hemal Thakkar, Director, CRISIL Research “The price increase for gasoline vehicles could be less than two per cent, while it could be between 3.0 per cent and 3.5 per cent for diesel vehicles.

Ram of Cummins stated the regulations will help the company grow and the intention is to expand its business at a rate twice as fast as the country's GDP growth. "While we are doing that, we want to increase our profits by one percent annually until we reach our highest historical profit levels of 18 to 20 percent," he said.

Manufacturers of automotive components have benefited greatly from the enormous trend toward electrification and the forthcoming slew of safety and emission regulations. According to top executives at auto component companies the new regulations and the trend toward electrification are resulting in an increase in the amount of content per vehicle, thereby increasing their revenue and profitability. According to Ashwath Ram, Managing Director, Cummins India, businesses like Cummins have succeeded and managed to increase business with every automaker whenever emission standards have become stricter and fuel economy regulations have become more stringent. Beginning on April 1, the auto industry in India will switch to Bharat Stage VI-B emission standards. By the beginning of the following fiscal year, manufacturers of passenger vehicles would also be required to share with the government their corporate average fuel economy (CAFE-II) scores. Companies must also comply with RDE (Real Driving Emissions) regulations in accordance with BSVI-B standards. Because vehicles will require new components, this is likely to result in an increase in prices across all categories. According to Hemal Thakkar, Director, CRISIL Research “The price increase for gasoline vehicles could be less than two per cent, while it could be between 3.0 per cent and 3.5 per cent for diesel vehicles. Ram of Cummins stated the regulations will help the company grow and the intention is to expand its business at a rate twice as fast as the country's GDP growth. While we are doing that, we want to increase our profits by one percent annually until we reach our highest historical profit levels of 18 to 20 percent, he said.

Next Story
Infrastructure Urban

DRI Introduces Advanced Fresh Air Solutions for Large Buildings

DRI has unveiled its latest solutions for indoor air quality (IAQ) and energy-efficient ventilation in large enclosed buildings: the Treated Fresh Air Handling Units (TFA) and Dedicated Outdoor Air Systems (DOAS). The TFA units integrate EcoFresh Molecular Sieve Coated Heat Wheels to deliver optimal IAQ while promoting energy savings. The modular design allows additional functions such as cooling, heating, humidification, high-efficiency filtration, mixing, and sound attenuation. Maintenance is minimal, with standard filters and fan assemblies designed for reliability and ease of service. TFA..

Next Story
Infrastructure Urban

Dia Mirza-backed Without® Launches FOAK Recycling Plant in Pune

Without®, an impact-first deep-tech material science enterprise, has inaugurated its first-of-a-kind (FOAK) recycling demonstration plant in Pune. The 1,030 sq. m facility can process up to 5 tons per month of “unrecyclable” plastic waste, offering end-to-end operations from material intake and separation to chemical transformation, purification, product manufacturing, and quality testing. The demonstration plant serves as a precursor to a commercial facility planned for next year. The launch follows the successful closure of a $1.9 million (approx. Rs 16.8 crore) seed funding round led ..

Next Story
Infrastructure Transport

Tata, Airbus to Build India’s First Private Helicopter Line

In a landmark development for India’s aerospace sector, Tata Advanced Systems Limited (TASL) and Airbus will establish the country’s first private-sector helicopter assembly line in Vemagal, Karnataka. The facility will manufacture the Airbus H125 and H125M, marking a significant milestone in India’s push for self-reliance in aviation and defence manufacturing. The new Final Assembly Line (FAL) will produce the H125, the world’s best-selling single-engine helicopter, known for its versatility and performance in extreme environments. The first ‘Made in India’ H125 is expected to ro..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?