Insurance cost rise, airbags norms to hit small car, bike sales: Automakers

NEW DELHI:  A day after two-wheeler manufacturer TVS Motor criticised the government’s decision to increase  premium on third-party motor insurance, India’s largest carmaker Maruti Suzuki (MSIL) on Tuesday said that six airbags are mandatory norm in passenger vehicles will adversely hit the already shrinking small car market.

The carmaker said the government’s decision may even impact jobs in the auto sector, going ahead. MSIL chairman RC Bhargava said the regulation would largely impact the cost-sensitive entry-level car segment - which has been facing headwinds and witnessing dwindling sales over the past three years - making it even more difficult for two-wheeler users to upgrade to small cars.

“So, the fear is that due to this (six airbags norm) the market will become smaller. The car manufacturing sector is important because it is a big creator of employment. When the car sells in the market it creates many jobs - drivers, maintenance, repairs, accessories etc,” Bhargava told PTI.

Bhargava said he is not sure how much prices would go up but the addition of extra airbags could be in the range of Rs 20,000-25,000, which for a small car buyer is a lot of money. Selling prices of small cars has seen a significant hike in the past few years due to norms such as switching to BS-VI  emission norms and a hike in insurance premiums. 

Add to it, most automakers have implemented 3-4 price hikes in the past one year due to the rise in raw material prices. According to the government, the airbags are in need of the hour and it will ensure safety of passengers across all segments.

Small cars seen significant price hike in past few yrs
New Delhi: Selling prices of small cars have seen a significant hike in the past few years due to norms such as switching to BS-VI emission norms and a hike in insurance premium