Anurag Garg: One year of BS-VI

Over a year ago, on 01 April 2020, India took a historic step in vehicle technology. BS-VI emission standards were implemented across the country, leapfrogging from BS-IV. The move put India on par with global emission standards for the first time, opening up more opportunities worldwide. The move also paves the way to cleaner technologies in the future, eventually leading towards electric mobility.

However, the jump from BS-IV to BS-VI created some challenges. R&D had to be ramped up by companies, requiring additional investments. Manufacturing had to be realigned to suit the new norms.

The biggest challenge, however, was brought upon by the pandemic. Despite all the preparation, the country was in a historic lockdown in April 2020, when the BS-VI norms came into vogue. Let’s take a look at the journey thus far.

Looking back
The Indian automotive industry has come a long way in adopting the emission norms announced over the years. They journeyed from tailpipe emissions in vehicles to the Bharat Stage I (BS-I) emission standards in 2000. From there, we saw incremental strictness in the emission standards as we moved to BS-II. BS-III, and BS-IV.

In 2016, when India signed the Paris Climate Agreement, India committed to bringing down the carbon footprint by 33--55% (from 2005 levels) in the following 12 years. Thus, leading to a monumental decision to skip BS-V and transform directly to BS-VI.

This required a considerable realignment within the automotive companies. But the industry has done a commendable job in making the necessary upgrades to meet the deadline. In addition, the Indian automotive sector has ramped up its investment in new technologies and is looking to partner with more local manufacturing partners to be cost-effective.

The implementation of BS-VI norms has not only had an impact on the OEMs but also on auto-component manufacturers - both local and international.

Local manufacturers had to invest in R&D or acquire technologies and ramp up production capabilities to move up the value chains. On the other hand, multinational manufacturers had to develop a solution for the Indian market - a unique and value-conscious market.

Understanding the Indian consumer behavior and buying patterns over the years, it is essential to understand the cost dynamics. In addition, the vehicle needs to undergo significant upgrading with significant changes in engine design and after-treatment systems to comply with the stringent norms.

Auto-parts manufacturers had to create an economy of scale for low-cost emission control systems and technologies for the value-conscious consumers of the Indian market.

One of the most prominent challenges of BS-VI was that each variant had to transform to meet the norm. This created a strain on supply chains for Indian auto manufacturers.

The BS-VI emission standard has created the much-needed groundwork for other policies to create a sustainable ecosystem. However, with the advanced technologies and stricter emission norms in place, there is a need for an upgraded infrastructure for newer technologies for the effective implementation and desirable output.

Opportunities
This transformation has opened the doors for innovation. OEMs are now equipped to be innovators in battery technology and valve trains for friction reduction, flexibility, and advanced combustion technologies. Further, many OEMs have already embarked on the journey towards electrification to create the right hybrid product mix for the Indian market.

With the current market conditions and consumer behavior, the norms have paved the way for the adoption of electric vehicles in India. Mild hybrid technology is expected to take the Indian automotive industry by storm with its unique value proposition in helping OEMs comply with fuel economy standards and more sustainable solutions.

Various notable OEMs focus on MHEVs to improve fuel efficiency and make cars more affordable for their consumers. This will have an affirmative effect not only on the environment but also help in reviving the economy. Moreover, as the government targets to put at least 30% of electric vehicles on the road by 2030, the BS-VI norm will help enormously.

Although the Faster Adoption and Manufacturing (FAME 2) program of hybrid and electric vehicles has provided policy stability needed for the sector, achieving the ambitious central government goals still require some state government-backed programs and appropriate incentives.

The recently announced Vehicle Scrappage policy that aims at improving the air quality also compliments the BS-VI. As the old vehicles will be taken off the road, it will create demand for new BS-VI vehicles.

The Government is also looking at sustainable alternative transportation fuel (e.g. Ethanol) to reduce its dependence on crude. This will give OEMs and auto-parts makers more opportunities to explore solutions that comply with BS-VI emission standards.

Looking ahead

The jump from BS-IV to BS-VI emission standards was crucial and needed to be leveraged to create a sustainable ecosystem. ICE vehicles will remain a part of the Indian OEMs for the foreseeable future. However, electrification and alternate fuels have received a much-needed push with the introduction of the norm, electrification, and alternate fuels. We can already see increased hybrid offerings in the market.

Having said that, we also need to address some challenges. For example, the cost of compliance in diesel engines will be higher due to the need for expensive post-treatment technologies. On the other hand, the petrol engine can use various technologies for better combustion, injection, and compliance to make significant progress in fuel efficiency and power generation.

India is on the path to reach global emission standards, and it will collaterally witness some changes in sales, consumer behavior in the automotive industry. However, to make the BS-VI transformation successful in the true sense, India needs significant structural reforms to identify manufacturing, urbanization, and sustainability opportunities to achieve the required employment and productivity growth in the country in the coming years.

About the author:

Anurag Garg is the Managing Director & Country Head of Vitesco Technologies in India. He comes with over 32 years of experience in the Industrial & automotive business.