 "C V Raman")
The government will enforce safety norms (crash test, mandatory airbags and ABS) from 2017 onwards. Will the bulk of products shift to that even before date?
Absolutely. Maruti Suzuki will be much ahead. For the customer today, we have started giving option packages. The earlier experience showed there was limited interest in safety options. We want to propagate it again. In both the Nexa models (S Cross and Baleno) we have made air bags standard. We will definitely comply before all the regulations come in place.
What challenges you foresee as the industry graduates to the new safety and emission standards?
We need to improve our engines and technology. We need to have a good supply chain in place to meet all regulations. Every vehicle of ours (new and existing) in next 3-4 year needs to meet all the norms. So, supply chain also needs to keep pace. We need to book capacities of high tensile steel both in India and outside, get in place supplies of seat belt pre-tensioner and force limiter. The vendors also need to plan capacities. These are available now but in limited numbers. We have penetration of about 10 per cent in air bags, implying the existing need is for only 250,000 vehicles. This needs to go up to about 1 million by 2017 and to 2 million by 2020 for all the vehicles.
How will the customer get impacted by these changes?
Customers will have an option of choosing a vehicle based on star rating. These ratings will be for fuel efficiency and safety. The Bureau of Energy Efficiency is developing these ratings on efficiency. We will need to allot a star rating to a vehicle, calling it a 5-star or 4- or 3-star, like it happens for ACs and refrigerators. Rating will also come for crash standards. We want to ensure that we have 4-star or 5-star rating for all our vehicles.
But shouldn't every vehicle have a 5-star rating?
It is not necessary. The basic offering will be 1 star. There is a big discussion happening that our vehicles are unsafe. It is not unsafe. It has got a lower level of safety. If you want more, you can go and put up to 8 air bags. But if people don't follow basic rule (like using seat belt) any number of air bags is not going to help us. Why do we provide seat belt for the rear seat? It is not for the traffic police to catch you but it is for your own safety.
In what way will vehicles pricing change?
It will vary from product to product. We may even need to change the design and body of a vehicle. The cost of two front airbags ranges from Rs 10,000 to Rs 20,000. An ABS will come for Rs 10,000-15,000. There will be a cost addition due to changes in emission norms as well. In petrol cars, the cost will be minimal at Rs 5.000-6,000. In diesel vehicles, we will have to change hardware, install diesel particulate filter and the cost will be in the range of Rs 30,000-40,000.
Where will the Indian industry fit in the supply chain of components like airbag and ABS?
We need to have suppliers for all these. But no technology is available with the Indian manufacturers. So, the MNCs are going to be doing all of these. A number of these companies are already present in India. Many more may set up bases. Some may come through JV (with an Indian partner) or come on their own. In both cases, they will control the technology.
Maruti has experimented with mild hybrid technology in Ciaz and Ertiga. How far are you from a full hybrid offering?
Mild hybrid is a step towards educating the people. Customers first need to understand how this technology works and then graduate to the next stage. The cost of technology and battery has to come down. Then things will change. It will not happen on its own. We need to work with government and explore ways to localise production, especially for the electronic components.
