After four years of struggling, the Government of India has cleared the proposal for fuel efficiency labels to be made mandatory on new cars. The action was taken under the Energy Conservation Act and pollution control exercise, and the automakers are expected to improve their fuel-efficiency figures over time. The norms will require the automakers to put government certified fuel efficiency labels on each vehicle they sell and labels have to be approved by an appointed government agency.
According to the proposal, top-ten auto manufacturers that add up to 96 percent of vehicle market offer an average fuel-economy of 16.42 kmpl. The government expects this figure to improve to 18.15 kmpl by 2015 and 20.79 kmpl by 2020. Since the companies will have to invest millions in R&D to improve the fuel economy figure, the government has given ample of time to reach the target number.
Any car rated below ‘one star’ will not be allowed on the roads after 2015. There have been several protests against the proposed norms, while SIAM has petitioned to ease the figures. The government refers to the proposals as invalid, and the improvement by ‘2.8 percent every year’ figure is not very steep for manufacturers. In addition, since India is emerging as a global leader in auto industry, it needs to display performance similar to other leading markets.
Violation of these rules could cost the company a penalty up to Rs 10 lacs, with an additional Rs 10,000 per day with a maximum of Rs 46 lacs. Models that are not compliant with the mandate could also be ordered to be pulled out of the market.
This means that the auto manufacturers will have to invest billions in R&D and come up to the challenge and offer fuel-efficient cars in the future. However, there is also a possibility that the auto manufacturers offer a stripped down, light weight version of the models to improve the fuel-economy.
Features like ABS and Airbags are not well received in India, and there is a possibility that the future cars will do away with these features. So is the government gambling for safety against fuel-economy?
