Diktat Or Direction?

Diktat Or Direction?

Editorial October 2017 Diktat Direction

Dear Readers,

Much has been written and spoken about Road Transport and Highways Minister Nitin Gadkari’s speech at the recently concluded SIAM annual convention. Industry professionals watched in rapt, yet stunned attention, the Minister’s command to all automakers to dump petrol and diesel vehicles and switch to making electric cars or search for alternative fuels, such as methanol. In no uncertain terms, the Minister said his policies are ‘crystal clear’, in what was a direct jibe to the outgoing SIAM President’s demand that government policies be clear and stable, so the industry can prepare the right future technology and product roadmap.

Clearly, the government’s approach has upset plans and strategies of many organisations – OEMs and suppliers alike. The industry, in fact, has been faced with multiple challenges for the last two-odd years. Be it the ban on sale of diesel vehicles with engines upwards of 2 l displacement, or the losses suffered due to demonetisation and GST roll-out.

This at a time when the industry is hard pressed for time to meet stringent upcoming regulations on emissions as well as safety. Most agree that the leapfrogging to BS VI emission regulations from the current BS IV levels is an arduous task. Even leading global suppliers have accepted it’s not going to be easy, considering there’s less than 30 months for BS VI to go live. Technologies and products might well be ready, but there won’t be enough time to undertake them through the mandatory test cycles. That is a scary situation the industry is likely to find itself in.

Let’s look at the timelines. Assuming the industry successfully migrates to BS VI norms by 2020, they would just have 10 years to recover the massive amount of investments they are currently making. Secondly, for the industry to meet the government’s aggressive deadline to electrify all new vehicles by 2030, they need to start investing a humongous amount of money and manpower into developing solutions for electric mobility. Then, there are consumers who would face a strange dilemma of what to opt for closer to 2030.

As many top industry leaders admit, these aren’t quite the right time for the sector. There is confusion and concern, and many silently wish the government shows direction rather than issue diktats.

Deepangshu Dev Sarmah
New Delhi, October 2017