Extension Of BS-IV Emission Norms Deadline Unfair And Unnecessary, Says Bajaj Auto

Bajaj Auto has an axe to grind with other Indian vehicle manufacturers.
Auto-rickshaws kick up dust as they travel near the Delhi city boundary in Faridabad, Haryana. (Photographer: Prashanth Vishwanathan/Bloomberg)
Auto-rickshaws kick up dust as they travel near the Delhi city boundary in Faridabad, Haryana. (Photographer: Prashanth Vishwanathan/Bloomberg)

Requests from some Indian vehicle manufacturers to extend the April 1 deadline to implement Bharat Stage-IV emission norms have no basis and such an extension would be unfair to companies that have already implemented them, said Bajaj Auto Ltd.’s Managing Director Rajiv Bajaj on Wednesday.

The Pune-based manufacturer has already adopted the new technology, making some of its products more expensive compared to players that are yet to conform to the new emission standards.

There is confusion about the switch to BS-IV on April 1. There is a group of people in the industry who think the deadline should relate to the manufacturing date of vehicles, while a minority of one or two companies have interpreted the deadline to require vehicles to conform with the norms on the basis of their sale or registration date.
Rajiv Bajaj, Managing Director, Bajaj Auto

The norms are being implemented in two phases, and are scheduled to fully come into effect on April 1 this year. The first phase requires all vehicles launched in India after April 1, 2016 to be compatible with the BS-IV norms.

Starting April 1, all existing models will have to conform to the norms as well.

The Environment Pollution Control Authority (EPCA) in October said all vehicles with a sale or registration date of April 1 should meet the norms, he said. "The industry balked at this; this would effectively amount to bringing forward the deadline by a month or two," said Bajaj.

The reason for the alleged consternation is that automotive companies keep an inventory of vehicles at their manufacturing facilities and with their dealers. This, as a standard practice, ranges between three to five weeks based on demand for the vehicle.

A change in the norms entails a higher cost, which is passed on to customers. For two and three-wheelers, according to Bajaj, this price increase ranges between Rs 1,000 and Rs 7,000.

"The industry wants to keep pumping (the cheaper) BS-III stock into the market," Bajaj alleged. Theoretically, if an auto manufacturer decided to increase production of vehicles conforming with BS-III till March 31, it could benefit from a cost advantage in the near term over companies that have already made the shift to BS-IV.

Bajaj Auto began upgrading the technology of its older vehicles in September, and completed the transition in January. Barring one or two vehicles, Bajaj Auto has already passed on the cost increase in the form of price hikes, Bajaj said.

Bajaj said industry body Society of Indian Automobile Manufacturers (SIAM), was planning on sending a letter to the EPCA seeking an extension to the deadline. However, Sugato Sen, deputy director general of SIAM told BloombergQuint that the association had sought no such extension on implementing the deadline, since it has already been decided that the norm will apply for vehicles manufactured from the first day of the next financial year.

SIAM has not put forward any request for postponement of the deadline to move to BS-IV emission norms from April 1, nor has any SIAM member company done so. The position today is where companies will start manufacturing only BS-IV compliant vehicles from April 1, and every company has agreed to that.
Sugato Sen, Deputy Director General, SIAM.


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