Maruti Suzuki chairman, RC Bhargava, has warned that the company may have to stop developing compact vehicles if the government’s policies make the cost-prohibitive. To be more specific, he was referencing the law requiring at least six airbags in all passenger automobiles.
According to RC Bhargava, Chairman of Maruti Suzuki, the company may be compelled to stop manufacturing compact vehicles for the Indian market if prices continue to rise and become unviable as a result of policies implemented by the Indian government.
This was a reference to the policy of the central government, which mandated that all automobiles be equipped with six airbags. Because of this policy and several other recent measures implemented by the government, the cost of automobiles has skyrocketed, putting them out of reach for the average person.
Maruti Suzuki’s Chief Operating Officer, RC Bhargava, stated in response to a question about the forthcoming requirement that all passenger vehicles be equipped with six airbags, which is being pushed by the central government, that this change will ultimately result in an increase in the price of automobiles by a sizeable margin. In addition, it is possible that the policy will not assist in successfully combating the problem of a high number of people losing their lives on Indian roads as a result of accidents.
Bhargava was quoted as saying to a prominent newspaper, “If the policy becomes such that little automobiles can no longer be viable, we would cease them.” He went on to note that Maruti Suzuki does not generate any major profits from the sale of cars in these categories.
He continues by saying, “We need to question ourselves whether or not it is desirable for a nation if low-cost automobiles vanish from the market.” The industry as a whole will slow down, and job opportunities in the automotive sector will decrease.
Nitin Gadkari, the current Central Minister of Road Transport and Highways, has been a consistent supporter of efforts to improve driver and passenger safety. In January of this year, he sent out a tweet in which he said, “To increase the safety of the occupants in motor vehicles transporting up to eight people, I have now authorised a Draft GSR (General Statutory Rules) Notification to make a minimum of six Airbags obligatory.”
Bhargava refuted the claim that Maruti has issues with the six airbag policy because the company is concerned that any delay in sales from small vehicles would harm their bottom line and, eventually, their share of the Indian market. He continued by saying, “We build a greater quantity of larger automobiles, and we are currently releasing new SUVs.” We will successfully reclaim the market share (that Microsoft has lost over the last year).
According to the Chairman of Maruti, the data that was made public by the Ministry of Transport reveals that two-wheelers are responsible for 43 percent of fatalities that occur as a result of road accidents, while pedestrians only account for 18 percent. It needs to be a top priority to cut down on these fatalities.
According to him, if the price of inexpensive automobiles continues to rise, families with lesser incomes will be compelled to purchase two-wheelers instead of upgrading to automobiles since the former option is seen to be less risky. “If extra airbags are installed in automobiles, the price of such vehicles will go up, and both manufacturing and sales would suffer as a result.
“Now, which segment of potential purchasers will no longer be able to afford to purchase automobiles as a result of the price increases? It’s closer to the bottom of the market than the top. They won’t have a choice except to purchase two-wheelers, which are inherently riskier than four-wheelers. He went on to say that wealthy individuals would keep buying vehicles as long as they had the money to do so.
In addition to this, he asked, “What would happen if people on the lowest end of society don’t purchase cars? Then they will go out and purchase two-wheeled vehicles. Will this result in an increase in the overall level of road safety, or will it rather result in a further decrease? These (two-wheeled vehicles) pose a greater risk.
He also said that if sales of small vehicles are affected, it would be detrimental to the Indian economy as well as the expansion of the automobile sector.
