Auto industry stares at tough year due to transition to BS-VI norms: SIAM

'Auto industry, as we all have seen in the past eight months, has witnessed continuous de-growth and August being the worst at 30 per cent,' said SIAM's Rajan Wadhera

Auto industry body SIAM on Wednesday said the industry, which has been reeling under a prolonged slump, is staring at a difficult road ahead for the rest of the year due to transition to BS-VI emission norm from BS-VI by April 2020.

Terming it as a "huge challenge", Society of Indian Automobile Manufacturers (SIAM) President Rajan Wadhera said on an average each vehicle manufacturer is spending close to Rs 1,000 crore to upgrade all of their model line-up to meet the new emission norm within a short span.

"The auto industry, as we all have seen in the past eight months, has witnessed continuous de-growth and August being the worst at 30 per cent," Wadhera said, while speaking at Federation of Automobile Dealers Associations (FADA) annual auto retail conclave.

He further said the entire value chain of the auto industry - from component suppliers to vehicles manufacturers and dealers - have been impacted by the slowdown.

"The road for the rest of the year is also looking difficult because there is a huge challenge of migration from BS-IV to BS-VI is awaiting us," Wadhera said.

New technologies coming into vehicle, which has to be done "in a span of three years across all models and have defect free products is a huge challenge", he added.

"On an average an OEM is spending about Rs 1,000 crore to upgrade their product portfolio," Wadhera said.

In order to ensure a smooth transition, he said, "Sales forecasting and operational efficiency has become important on account of the upcoming BS-IV to BS-VI transition".

While the dealers will be managing the front-end, OEMs (original equipment manufacturers) need to ensure that there should neither be loss of sales on account of unavailability of products nor allow inventory build up or write-off which will create more hardships for the dealers, he added.

In the near future, Wadhera said the auto industry will not only have to deal with slowdown and BS-VI transition, but also has "actually prepare for the future mobility" - electric, connected and autonomous.