Homegrown auto major Mahindra and Mahindra Monday said it is ready to launch its BS VI compliant vehicles next year and will be able to roll out the petrol range in 2019 itself.
"We will be ready with our first gasoline BS VI ready vehicles by the end of second quarter of this year," M&M Managing Director Pawan Goenka told reporters here.
"We would probably be able to launch gasoline vehicles as soon as we are ready because it does not require a BS VI fuel but we will not be able to launch the diesel vehicle till the fuel becomes available throughout India. I am assuming it to be somewhere in late December and early January," Goenka said.
The Bharat Stage VI (or BS-VI) emission norms would come into force from April 1, 2020 across the country. Currently, the vehicles sold in the country conform to BS-IV emission standards.
"The only entrant we are not taking to BS-VI is the 1.2 diesel. Which means the only passenger vehicle which does not go to BS VI is the KUV100. Everything else will go to BS VI. We have also stopped the Jeeto van because of very high cost of meeting the emission requirement," he added.
However, he said, even on the 1.2 litre, the company has done all the initial work. If somehow it is found that there is a pull for 1.2 diesel, that work can be done in a year and a half.
The company has invested Rs 1,000 crore for transition to BS VI.
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On the cost increase due to the transition, Goenka said it is too early to talk about that as some fine tuning is going on which may reduce the cost further.
"Of course the diesel cost increase will be more than petrol but it is not so much that diesel will become unaffordable except the small engine like 1.2 litre," he said.
"We believe that for passenger vehicle the 1.2 litre diesel would be hardly justified because that is a vehicle that costs Rs 6 lakh and therefore the cost impact of 1.2 diesel would be hard to justify and therefore many of the OEMs are deciding not to do the 1.2 diesel," he added.
Asked if the company would absorb the cost, Goenka said it is impossible for the company to absorb that cost delta. Also, there is a GST impact.
"We have to recover our Rs 1,000 crore investment and also make some profit. When you add up all these there is going to be a reasonable increase in price and it's impossible for us to absorb," he said.
He said customers would be happy if the price increase for larger vehicles would be around a lakh and for smaller vehicles Rs 80,000.
The last date of selling BS IV vehicles is March 31, 2020, which Goenka said was a problem.
"Therefore we have to start selling BS VI from sometime January or latest by February but we cannot delay beyond February because we won't get the portfolio right. The fuel has to be available in place pan-India latest by January."
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