In January, Union Transport Minister Nitin Gadkari signed into law a new law requiring cars carrying at least eight people to carry at least six airbags. The federal government has announced that it has decided to implement the law with the safety of car occupants in mind.
Although the law will save the lives of passengers from an accident, the price of cars has also risen significantly. Many carmakers are frustrated that two-wheeler owners will be forced to reconsider their decision to buy a car.
While this may not be a concern for some carmakers, such as Toyota, which already offers protection for the car with up to 6 airbags, there has been speculation that it could jeopardize the early sales of other carmakers. In this context, Maruti Suzuki has publicly requested that the federal government reconsider the requirement for cars to have 6 airbags.
RC Bargawa, India head of Maruti Suzuki, India’s leading car maker, has said that the market for cars in India is already shrinking and the price of cars may increase due to the requirement that cars now have to have six airbags. He urged the federal government to reconsider the rule as the car manufacturing sector could be affected by the move.
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If the Maruti Suzuki Alto is to fit 6 hairpins in smaller cars, it has had to rearrange its design and incorporate additional sensors. Thus the price of the car may go up to about 20 thousand rupees.
Paying an extra Rs 20,000 to customers who buy luxury cars at Rs 10 lakh or more would not be a big deal. Because they would consider adding 6 hairbags to their cars as a value addition. But for beginner customers who want to switch from a two-wheeler to a car, the Rs 20,000 extra is an additional premium and interest so they run the risk of giving up the idea of buying a car.
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Also, the extra cost for small cars can create an atmosphere of octagon for many. When such a situation arises, Maruti Suzuki is concerned that models like the Alto being manufactured for the middle class may be discontinued, which could affect the overall sales of the particular car maker.
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