Countdown for BS6 begins..!!

Posted by MarketsandMarkets on Jul 1, 2019 6:03:43 PM
MarketsandMarkets

Maruti Suzuki – an Indian car manufacturer giant, recently announced to phase out production of diesel cars by next year i.e. April 2020. This announcement from Maruti Suzuki is in sync with the implementation of BS6 norms in India and mirrors emerging global trends. The company’s decision is anticipated to be majorly driven by high cost of upgrading diesel engines to BS6 norms. However, to fill this void, the company aims to shift its focus towards hybrid technology driven vehicles and compressed natural gas (CNG) vehicles.

India, though being the market largely driven by diesel commercial vehicles in past years, is witnessing sluggish demand of diesel vehicle. The trend is projected to follow in years ahead, one of the key reasons being narrowing cost of diesel as compared to petrol. India had ~74% of gasoline passenger cars in 2018, which is expected to reach to ~80% by 2025. This can only be contradicted with growing demand of SUVs/MPVs.


The country being place for world’s top 10 most polluted cities, the implementation of BS6 norm is likely to bring necessary pollutant emission changes in the Indian automobile industry. Some of the benefits of BS6 includes NOx emission reduction by 25% for petrol vehicles and 78% in case of diesel vehicles, PM emission decrease by 80% in diesel engine, and introduction of RDE (real driving emission) etc.

Introduction of Advanced Technologies with BS6

With the reduction in emission limits, engine downsizing coupled with cost-effectiveness of car can be achieved using gasoline turbocharged direct injection engines. The recent example of this is Maruti Suzuki Baleno RS, and Hyundai Venue, which are launched at economic price range in the Indian Market. Another change which would be expected in the technology is Start-Stop or mild-hybrid technology, which most of the OEMs have now started offering. The next level technology which industry was awaiting - the 48V architecture, is too now commercialized in India with the launch of MG Hector.

The implementation of BS6 would also impact the transmission technologies. Presently, the market is dominated by manual transmissions, whereas Automatic Transmission (&/or CVT & DCT) are still occupying a limited space. However, with launch of Honda Amaze, Honda City CVT models, the CVT share has also picked up in recent times. Hyundai Venue launched with DCT option has also paved the way for OEMs. With an initial success of AMT, Maruti has launched this feature in most of its vehicles. Biggest advantage is the CVTs or AMTs offer fuel efficiency which can compete with manual transmission and hence, are now being well accepted in the Indian market.

The OBD requirements for BS6 are planned to be introduced in two phases - preliminary OBD thresholds (BS6-1 OBD) applicable for all vehicles manufactured on or after April 1, 2020, and final thresholds (BS6-2 OBD) applicable from April 1, 2023.

Before the implementation of BS6, the passenger car industry is expected to showcase slight increase in the sales, which would be sell-off of BS4 models, where OEMs are expected to throw some attractive discounts on old models. However, as implementation of BS6 is expected to increase the passenger car cost by INR 20,000 to INR 30,000 (gasoline cars) and 75,000 to 100,000 (for Diesel cars), post April 2020.

India Transmission Share

Change in Your Client’s Business - MarketsandMarkets&trade Viewpoint

Amey Amanaji  - Associate Manager, Automotive & Transportation, shares his point of view as mentioned below:

The mega leap from BS4 to BS6 is likely to be game changer for auto parts manufacturers and OEMs. To counter the challenges ahead, the key industry participants have this opportunity to join forces to deliver the desired result with utmost precision. Moreover, with these ongoing changes, the automotive tier 1 suppliers and product engineering players have high probability to move up the value chain.

BS6 will not only bring the changes at OEM end, however, the whole ecosystem would be changed. With introduction of gasoline direct injection engines, the turbocharger suppliers will now have to focus on the gasoline turbochargers, piston manufacturers will have to modify their product line. Alternatively, there will be a new requirement at exhaust supplier ends such as gasoline particulate filter (GPF), diesel oxidation catalyst (DOC) and diesel particulate filter (DPF).

Conclusion

In long run, the implementation of BS6 is anticipated to create positive impact on India automotive industry. Although, some of the manufacturers namely Mahindra, TATA, and up to certain extent Maruti, which focus on diesel passenger vehicles, will have to soon switch towards manufacturing of gasoline engine vehicles. When everyone is discussing about electric vehicles or gasoline engines, alternative fuels such as CNG/LNG would be good options for OEMs. Additionally, some of the key market players already export BS6 compliance engines to Europe, and hence technology implementation doesn’t seem to be a big challenge as compared to mass production of same. Overall, India is ready for the implementation of BS6.

Topics: Automotive and Transportation, exhaust system

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