Government Eases 6 Airbags Mandate: Impact on Auto Industry

Government Eases 6 Airbags Mandate: Impact on Auto Industry

India’s game-changing move on six airbags in cars: How will it reshape the auto landscape?

The Indian government has been actively working with the auto industry to enhance the safety features of vehicles, and safety concerns have been a significant focus in the country. This has led to changes in rules and the introduction of new initiatives in the automobile sector. The government’s decisions on safety features have positively and negatively impacted the industry.

You might recall the Indian government’s decision to make it mandatory for vehicles to have six airbags. In September 2022, Union Minister Nitin Gadkari announced that all cars would soon require six airbags. However, there has been an important update regarding this rule.

Let’s find out what this decision is and how it will affect the automobile industry.

What’s Happening?

Last year, the Indian government had initially decided that all vehicles must have six airbags starting from October 1, 2023. Many companies had started preparing for this requirement, with some even beginning to install these six airbags. However, 13th September 2023, Union Transport and Highways Minister Nitin Gadkari announced a change in this rule. Now, vehicles will not be mandatory to have six airbags; instead, it will be up to individual companies to decide whether they want to provide this safety feature.

So, what led to this change in decision? 

According to a report in Navbharat Times, the automobile industry has been facing increasing pressures since the COVID-19 pandemic. While there was a surge in demand for vehicles post-COVID, a global shortage of sensors posed significant challenges for everyone involved in manufacturing and distributing vehicles. If six airbags were made mandatory, it could have added further difficulties in sourcing and supplying these components. 

Additionally, the festive season is approaching in India, a crucial time for vehicle sales. The government’s decision to withdraw the mandatory six airbags rule is expected to ease the pressure on companies during this period.

A Gist of the Automobile Industry

India holds a significant position in the global heavy vehicle market. It is worth noting that India is the world’s largest manufacturer of tractors, the second-largest producer of buses, and the third-largest manufacturer of heavy trucks. 

According to the Indian Brand Equity Foundation (IBEF), in the fiscal year 2022, India produced a whopping 22.93 million vehicles. The Indian automobile industry boasts a robust market both in terms of domestic demand and exports. In FY23, the total sales of passenger vehicles reached an impressive 3.89 million.

Moreover, India has strong expectations for future export growth, which is expected to strengthen its position further on the global stage. In addition, the Government of India has launched several initiatives, such as the Automotive Mission Plan 2026 and the Production-Linked Incentive Scheme, which are anticipated to provide substantial support to the automobile industry. These initiatives reflect India’s commitment to promoting and sustaining its strong in the global heavy vehicle market presence.

Six Airbags for 5 Star Rating

The implementation of Bharat NCAP (New Car Assessment Program) for safety ratings of vehicles in India has brought about some significant changes. To earn a good rating, besides having six airbags, vehicles are required to incorporate other safety features. Companies aiming for top safety ratings will likely enhance their vehicles by including additional airbags and other safety technologies. 

This shift towards emphasising overall vehicle safety might have contributed to the decision to withdraw the mandatory requirement of six 

What’s Next?

According to the Indian Brand Equity Foundation (IBEF) report, the Indian passenger car market was worth about US$ 32.70 billion in 2021. It is projected to grow significantly and reach approximately US$ 54.84 billion by 2027, with an expected compound annual growth rate (CAGR) of more than 9% between 2022 and 2027.

Apart from this, the Indian government expects that the automobile sector will attract local and foreign investment of US$ 8 -10 billion by 2023.

Additionally, globally, the electric vehicle (EV) market is on the rise. It is estimated to be worth an impressive US$ 1,318 billion by 2028. In India, the electric vehicle market is also experiencing substantial growth and is expected to reach Rs 50,000 crore (approximately US$ 7.09 billion) by 2025. 

That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!

*The article is for information purposes only. This is not an investment advice.


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