Car manufacturers should absorb the price hike which will ensue due to the government’s mandatory dual front airbags rule, the Federation of Automobile Dealers Associations (FADA) has said.
In an attempt to make passenger cars sold in the country safer, the Union Ministry of Road Transport and Highways has proposed to make front passenger airbag standard on all cars.
New cars sold from 1st April 2021 will have to comply with the rule, while existing cars will have to follow it from 1st June 2021 onwards.
Stakeholders will be able to offer their comments on the government proposal next month. Note that all cars already come with a driver’s side airbag from July last year.
President of FADA, Vinkesh Gulati, has welcomed the mandatory dual front airbags rule, stating it is a much-needed safety norm.
He, however warned this would further increase the price of cars which has already increased significantly due to adoption of BS6 emissions regulations.
Gulati says further increase in passenger car retail prices will impact sales in the short-term which will be bad for the industry that is currently showing growth on a month-on-month basis, yet lagging in the year-on-year front.
Thus, the FADA president says, manufacturers should absorb the major cost of input with the addition of the second airbag.
Almost all carmakers have announced a price hike come 2021 citing rising input costs and another hike in only a few months might indeed hurt sales.
Dual Front Airbags Rule
- FADA wants cost hike due to dual front airbags rule to be absorbed by OEMs
- Says industry will struggle with another price hike
- Industry is only showing a month-on-month growth now
Source – LiveMint.com