Is The Indian CV Industry Ecosystem Ready For BS-VI?

The Indian commercial vehicles (CV) industry is undergoing a huge transformation in terms of technology and product offerings. The Indian Government’s push to implement Bharat Stage VI (BS-VI) emission norms from early 2020, as well as the Voluntary Vehicle Fleet Modernisation Programme (V-VMP), which aims at scrapping 15-year-old CVs, have accelerated the need for OEMs to upgrade their models.

- Prachir Singh and Aman Madhok

Government regulations have continually pushed fleet management companies to replace their older fleet of CVs with newer vehicles, leading to an increase in the sales of CVs. Indian CV shipments increased by 25% year-on-year (YoY) in 2018. Tata Motors, Ashok Leyland, and Volvo-Eicher registered a growth of 27%, 29%, and 34%, respectively (Fig. 1). Both heavy commercial vehicle (HCV) and light commercial vehicle (LCV) segments saw an increase.

From April 2020, India will be switching to BS-VI emission norms, equivalent to Euro-VI. Heightened safety norms also have required the OEMs to invest in offering mandatory safety features like ABS (anti-lock braking system) on their products. OEMs and oil refining companies, who have invested billions of US dollars to supply BS-VI grade fuel, will need time to recoup their investments before gearing up for another mandatory technological upheaval.

Key component additions

Based on government regulations and technology adoption, the following are the main components which will increase the electronic component share in commercial vehicles: