New regulations will help Indian auto component manufacturers: Report

19 Jan 2023 CW Team

According to a report, the trend towards electrification and regulations pertaining to vehicle safety and emissions are a blessing for auto component manufacturers in India. The requirement for content per vehicle is rising as a result of the new regulations and trends, which is assisting businesses in growing their sales and earnings. According to Ashwath Ram, Managing Director, Cummins India, business has improved for "every automaker" as a result of the stricter emission rules.

He further claimed, “The regulations will help us grow our share in the pie and grow our pie. Cummins aspires to double its business growth relative to the GDP of the nation. While doing that, we want to grow our profits by 1% each year until we reach our highest historical levels of profit, which are between 18% and 20%.”

The Indian automotive sector will switch to Bharat Stage VI-B emission norms from 1 st April onwards. The passenger vehicles will be required to disclose their corporate average fuel economy (CAFE-II) scores with the government. The companies must also adhere to Real Driving Emissions (RDE) regulations. These adjustments may result in a price rise for the new components across all categories. According to the research, prices for gasoline automobiles might increase by 2% and for diesel vehicles by 3-3.5%.

Additionally, the Center is anticipated to adopt new safety elements like six airbags, etc. beginning in October. Vehicle costs are probably going to increase as a result of this. According to Hemal Thakkar, Director, Crisil Research, “Addition of every airbag will improve the realisation for the airbag manufacturer and cost for the buyer.” He added that the cost of the car will increase by anywhere between INR 15,000 and 25,000 for adding four additional airbags.

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