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During the launch of India's first scooter that meets BS-VI emission norms, Minoru Kato, Chief Executive Officer, Honda Motorcycle and Scooter India (HMSI), mentioned that Honda, which is India's largest scooter manufacturer, was withdrawing from any further investment decisions until they have some clarity on the government's proposals for the electrification of sub-150cc two-wheelers in the country.
This decision is a result of report released by the Niti Ayog, proposing that all sub-150 two-wheelers in India will have to be converted to electric vehicles by 2023. Mr Kato said, "While electrification of two wheelers is the future, moving to 'electric' this soon after implementing new Bharat Stage 6 emission norms is not a wise move. We and many of our suppliers have made very heavy investments in moving to BS6."
Pawan Munjal, Chief Executive Officer, Hero MotoCorp, and Rajiv Bajaj, Managing Director, Bajaj Auto. They feel that India has moved from Bharat Stage 4 (BS-IV) emission norms to Bharat Stage 6 (BS-VI) emission norms in three years, while Europe moved from a comparable Euro 3 emission norms to Euro 5 emission norms in thirteen years.
Two -wheeler manufacturers in India have mentioned before that this swift move has led to them to divert large amounts of engineering resources into BS-VI engine development. Stricter emission rules means that most, if not all two-wheelers will use fuel-injection systems. This along with inflation in production of other safety features, increases prices by 10-15 per cent.
Mr Kato said that a sales slowdown because of this was anticipated. He also mentioned that was not anticipated was the further decline in sales numbers after the elections. Sales for a number of two-wheeler, and passenger car manufacturers have reduced by 15 to 25 per cent.
Mr Kato also said, "The industry and its lobby body, the Society of Indian Automobile Manufacturers (SIAM) should work closely with the government to discuss and implement a 'reasonable' road map for electrification."
According to several manufacturers, there are two major concerns over the electrification of two-wheelers at such pace. One is the travel range that the electric scooters provide. Two wheeler owners in India tend to ride longer distances within a city, and the current builds only allow for a best of 70-75 kilometers per charge.
And two, they feel while India produces enough of electricity, the back-end grids need to be upgraded across the country in order to meet charging load requirements of millions of two wheeler users.
The two-wheeler industry is hoping that the government gives them the time thy need to address these two major concerns, and three years is too quick to recover the investments in the BS-VI department.
Thoughts About The Two-Wheeler Industry Against Swift Electrification
We feel the government and the two-wheeler industry are on different pages. We know for a fact that all future investments are on hold, and if unaddressed could escalate to potential production cutbacks, and loss of jobs.