MSIL Head Puzzled Over India's New Safety Norms

MSIL chief said that the automaker will not falter from stopping its small PV, if they prove to be unfeasible.

Maruti Suzuki India Limited's Chairman R C Bhargava is in a predicament, at a time when India is bracing itself towards safer roads through new traffic rules and vehicle laws. The MSIL boss in a recent interview said that the car manufacturer will stop or “discontinue" its small vehicles without delay, if they become unfeasible or unprofitable as an effect of the Indian government's new policies and programme interferences, like the proposition to implement six airbags in cars, effective from the 1st of October 2022.

The Minister of Road, Transport and Highways of India, Mr Nitin Gadkari, has issued a new policy to car manufacturing companies with respect to road safety rules and vehicle safety norms. However, it did not impress senior automotive professional and experienced leader, R C Bhargava, as he cites a problem: will the hatchback buyer or small car customer, who may have just updated their personal vehicle from a scooter to a car and who is also facing food and fuel price rise - be ready to pay extra for new safety norms?

The chairman, of the biggest car manufacturing company in India that makes up for almost half the passenger cars made in India, has a gut feeling, he will not.

The ministry under the government of India is placing data reports in contrast to this instinctive feeling: one lakh fifty thousand people die and almost five lakh people get injured each year in the country because of road mishaps, vehicle collisions and other tragedies.

According to a report by the World Bank published in June 2022, with only about one percent of vehicles globally, India ranks dangerously high with around ten percent of overall fatalities related to crash accidents.

Yes, for sure the situational apathy of the condition of roads in the country needs serious attention and repair, but, as of now, the government is concentrating more on car safety standards, and the crack down has made the situation more difficult for automotive manufacturers by making them liable and responsible.

The Maruti Suzuki chief is in the face of a challenge when the country is gearing up to new safety benchmarks, road regulations, and vehicle standards.

Maruti brand has always been a popular choice of customers as they offer budget-friendly small cars in a high competitively priced car market.

Mr Bhargava said, ”If the programme scheme leads to such a situation where small passenger cars don't continue to be feasible or profitable, we will stop them," and he further added, in the end the organization hardly makes any notable profits with the Maruti small car sales. "The pertinent point we make is that is it beneficial for the nation if cheap passenger vehicles vanish from the domestic market... the car manufacturing industry will hang up. There will be low number of employment level in the automobile industry." Mr. Bhargava also said Maruti company's reliance on small passenger cars is not as much big as it is anticipated to be. "Our financial gains or net profits don't rely on small passenger vehicles. People have an incorrect conception. We retail small cars nearly sans any net gains if you see the Maruti cars like for example, the Alto.”

Mr. Bhargava’s organization, Maruti Suzuki India is also against a ministry policy notice that aims to include star ratings that designates passenger car safety on the basis of their presentation results in collision experiments.The company says that it will agree to car safety rankings or vehicle protection ratings only if car buyers demand or like it. Maruti asserts that taking into consideration that acceleration or speed on the roads of the country are slow, passenger cars should be tested for collisions at steady pace compared to international norms. But statistics reveal that even though average speeds on Indian roads are actually slower, sixty seven percent of deaths happen due to fast acceleration or over-speeding, for the most part on highways, or frequently on wide arterial roads or mainly on open routes on the outskirts or near the cities. Maruti Suzuki’s passenger cars are usually built cheap and lightweight compared to rival brand’s vehicles in the category. The Indian carmaker has been protesting and resisting regulatory price as that is what hurts the most often.

However, this is the most intrusive and sharpest resistance and conflict of interest to an administration or a ministerial policy that has happened in a while.