New regulation can raise commercial vehicle prices by 10-12%: ICRA

Implementation of multiple proposed regulatory specifications can push up commercial vehicle prices by 10-12 percent, ratings agency ICRA said on Monday.

In its report on the Indian commercial vehicle industry, ICRA said the domestic automotive industry is undergoing rapid transformations, with increased focus by the government on implementing emission norms, safety systems and other standards that will bring the country at par with other major automotive markets.

”Within the Indian automotive industry, the commercial vehicle (CV) sector has been the focus, given that CVs account for the major part of vehicular emissions in the country,” it said, adding mandatory standards towards driver comfort and safety can help improve the driving conditions and road safety to a large extent.

Accordingly, ICRA said there have been multiple regulatory interventions in the recent past, with the industry adopting stringent emission standards in a relatively short span of time, as well as driver safety and comfort standards such as advanced braking systems (ABS), speed limiting devices (SLD) and blowers in cabins, with a view to reducing vehicular emissions and improving road safety and driver comfort.

”While these proposed changes can result in a potential cumulative increase of 10-12 percent in vehicle prices as they get implemented, the benefits in terms of vehicle safety, driver comfort, export potential to developed markets, among others, are expected to outweigh the same,” ICRA said.

The ratings agency pointed out that there are multiple proposed regulatory changes on the anvil such as the mandatory fitment of air-conditioners (ACs) in driver cabins which has already been announced with effect from January 1, 2025.

”In addition, other standards like blind spot information systems, advanced emergency braking systems, roll-over protection systems, driver alert systems etc. are proposed to improve road safety and minimise the occurrence as well as impact of road accidents,” it added.

Other regulations like mandatory fitment of fire detection, alarm, and suppression systems have also been introduced for select segments like school buses and inter-city buses with effect from October 1, 2023, ICRA said.