M&M will have 30 BS-VI compliant products by 2020. The vehicle company's executive director Pawan Goenka estimated the stringent safety, fuel efficiency and emission norms would push the sticker price up by 20-25%
The automobile industry, which was concerned about jumping from emission norm of BS-IV to BS-VI by 2020, is now "aligned" with the government on the issue, said Pawan Goenka, executive director of vehicle company M&M.
"All along the auto industry was very concerned about skipping BS-V and jumping to BS-VI. The government has taken a very aggressive step but now we are all aligned to it. There's no concern, question or negotiation that is going on it. It's established that BS-VI will happen by April 2020," he told reporters.
The chief of the utility vehicle (UV) major informed that his company had already begun work on it and would have about 30 products that would BS-VI compliant by 2020.
According to him, the biggest challenge would be to keep the cost of the vehicle affordable to the customers. Currently, M&M's cost of moving from Euro IV to Euro VI was Rs95,000 per unit.
"We are working on how to reduce that (the cost of scaling to BS-VI from BS-IV) as it will be unaffordable (for the vehicle buyers). We are also working on how to maximise localisation," said Goenka.
He is estimating the selling price of mid-sized vehicle to go up 20-25% by 2020 as original equipment manufacturers (OEMs) try to meet the recent stringent fuel efficiency, safety and emission norms set by the government.
Dismissing criticism that it did not have a strong brand in its stable like its domestic rival Tata Motors, which owns British luxury car brand Jaguar Land Rover, Goenka said M&M was looking to develop a product under the Pininfarina brand.
The Italian design and engineering firm was acquired by Tech Mahindra, which is the information technology (IT) arm of the Mahindra Group.
"We recently acquired Pininfarina, which is a very strong styling and engineering brand. We have said in the past said we will be leveraging its brand to see how we can make Pinoinfarina more than just an engineering and design brand," said Goenka.
The company has not yet decided what kind of product would be developed under the Italian brand. Till now, Pininfarina has not come out with any product but its brand has been used by its customers, mostly car makers, alongside their names.
The vehicle maker has also drawn up an ambitious plan to come out with 18 products in the next three years to enhance its market share in the utility vehicle (UV) segment.
It is expecting its sales to shoot up due to good monsoon predicted by the Indian weathermen this year. Goenka said the impact of sufficient rainfall is first felt in the tractor segment, and it then trickled down to motorcycle, which was followed by vehicles.
In the first quarter – April to June – of the current fiscal, tractor sales grew by 15%. In this segment, M&M outperformed the industry average with a 22% sales growth and a market share of 43.8%, which was highest in any quarter in the last 8-10 years.
In the same quarter, all segments grew in double digits except for passenger car segment, which was flat to marginally negative. UV did extremely well with a 35% sales growth, but the overall passenger vehicle segment grew at 6-7% during that period. M&M logged a 11% rise in passenger vehicle sales in the first quarter.
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