The Indian auto industry is going through its worst phase seen in the last 19 years, with sales dropping as high as 30 percent when compared on a Y-o-Y basis. While market factors like global recession and high-interest rates are all contributing to this negative growth, many trade pundits and analysts are blaming the confusion around the upcoming BS-VI emission norms for the negative sentiments.
There’s an air of uncertainty prevailing among the vehicle buyers, especially the car buyers that has resulted in a huge drop in sales over the last six months. A lot of people are confused whether to hold the money now and buy a BS-VI car after 1st April 2020 (The date set by Supreme Court to implement the stringent emission norms) or go ahead to buy a new vehicle now to avail offers and deals.
We try to debunk the Myths and Confusions on the BS-IV and BS-VI vehicles and answer why it is the right time to buy a car now-State of BS-IV Vehicles After 1st April
The biggest myth of all the myths among the buyers is whether the BS-IV vehicles will continue to run on the roads after the new emission norms come into effect. YES, the BS-IV vehicles will keep running on the road, much like when the BS-IV norms were implemented and we can still see older BS3 vehicles on road. While announcing a slew of relief measures for the auto industry, Finance Minister Nirmala Sitharaman said, “BS-IV vehicles which are purchased up to March 2020 will remain operational for their entire duration of registration”. High BS-VI Vehicle Prices
It goes without saying that technology comes at a cost and the BS-VI technology is no different. Once the BS-VI emission norms come into force, customers will have to shell extra bucks to buy a vehicle. Depending on the engine capacity, the cost of diesel cars will be significantly higher by anywhere between Rs 1 lakh to Rs 1.5 lakh. The increase for petrol vehicles is likely to be in the range of Rs 20,000 to Rs 50,000. Interestingly, car makers who are launching the BS-VI vehicles ahead of time are offering their updated cars at a lucrative introductory prices to lure the buyers. Case in point, the Hyundai Grand i10 Nios with the BS-VI engine is launched in India at Rs 4.99 Lakh. Impact of BS-VI Fuel on BS-IV Vehicles
There’s a theory that BS-VI fuel will damage the BS-IV vehicles, or worst, the current BS-IV fuel will impact the newer BS-VI cars. This myth is stopping people from buying both BS-IV and BS-VI cars, resulting in such sales crunch. As a matter of fact, there’s a negligible impact of BS-IV fuel on BS-VI cars and vice versa when it comes to petrol models. On the flip side, BS-IV diesel cars will be impacted by BS-VI fuel.
The difference between BS-IV and BS-VI fuel is the significant reduction of Sulphur, which will come down to 10ppm in BS-VI fuel as compared to 50 ppm in BS-IV fuel. Interestingly, Sulphur also contributes to the smooth running of diesel cars. Now if you use BS-VI fuel with low content of Sulphur in BS-IV cars, they will face some glitch in the longer run. High Discounts
Auto sales are at their lowest levels in nearly two decades and dealers are saddled with huge inventory. To push sales in such an environment and clear the network, manufacturers are offering huge discounts on several models. This certainly proves to be the best time for consumers to make a purchase as they will be able to avail attractive discounts, special gifts and offers for the festive season. Almost all automakers Maruti Suzuki, Hyundai, Tata, Toyota, Honda, Volkswagen, Mahendra, and Skoda are offering discounts ranging up to Rs 5 lakh depending on the model and vehicle manufacturer. To sweeten the deal further, carmakers are also offering extended warranty along with their cars.High Fuel Cost, Lower Efficiency
Whilst it will be mandatory to buy a BS-VI vehicle post 1st April, 2020, the fact of the matter is cleaner fuel comes at a cost. Not only the implementation of technology rises the one-time vehicle cost, but the fuel cost will also be higher and fuel companies have indicated to raise the fuel prices by at least Rs 1, and the burden will be borne by the vehicle owners. Also, the BS-VI fuel lowers the fuel efficiency of the car, as proven by various studies, although the deviation is minute. That being said, places like Delhi/NCR has started dispensing cleaner fuel at no additional cost. Your Chance to Buy Diesel Cars
Since the cost of converting BS-IV to BS-VI is very high in diesel cars, many car makers have announced to stop selling the diesel cars from 1st April, 2020. Manufacturers like Maruti Suzuki and Renault have announced that converting the cars to meet new emission norms will not be profitable and hence they won’t go ahead with the BS-VI diesel cars, although they are immensely fuel efficient, a must for a market like India. So this is your chance to get hands on a diesel car.Increased Registration Charges
While the Government has put this proposal at hold, it is in consideration to increase the vehicle registration cost to push the electric vehicle sales. Holding your buying decision may impact the on-road vehicle cost if the Government of India implements this proposal.
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