Diesel vehicles will not yet be out totally: Siam president Vinod Aggarwal

Lots of discussions happen between industry and the Ministry of Petroleum and Natural Gas. For example, now discussions are happening on ethanol blending; and on LNG availability, says Aggarwal

With focus on ‘green’ fuels and components, automobile companies are making efforts to switch to cleaner fuels and use sustainable components. However, an ecosystem is needed for this transformation to happen, says Vinod Aggarwal, president, Society of Indian Automobile Manufacturers (SIAM). Aggarwal, who is also managing director (MD) & chief executive officer (CEO), VE Commercial Vehicles (VECV), spoke to Sohini Das in a telephonic conversation. Edited excerpts: 

Can diesel as fuel be replaced easily? 

We all know the industry is going through a transformation, which includes switching to alternative fuels. A lot of work is happening in ethanol-blended fuels, compressed natural gas (CNG), liquefied natural gas (LNG), flex fuels and biofuels, among others. There will be a slow migration and industry will keep working. If we say that diesel will be out totally; that may not happen. For example, for long-haul trucks, diesel is the only fuel. We will see migration happening to CNG, especially for light commercial vehicles and cars. LNG can become an option for long-haul trucks, but here we would need a lot of infrastructure. LNG fuel has special storage requirements because the gas needs to be stored in liquid form. For that, the gas needs to be compressed at sub-zero temperatures. Migration is happening, but it will take some time. Technology will be ready, but we need an ecosystem. 

What kind of discussions are happening between industry and government?
 

Lots of discussions are happening between industry and the ministry of petroleum and natural gas. For example, now discussions are happening on ethanol blending and on LNG availability. There were discussions on having dedicated corridors for LNG trucks. This is an ongoing process.

If ‘green’ components come at a premium, will automobile players switch?

If it is coming through recircularisation like scrapping of old vehicles, then the cost of ‘green’ components would not be high. We have to encourage scrapping of old vehicles. Committees are working on it already in a focussed manner. We are also working closely with the government to make the scrappage scheme a success. 

We have not made much headway in scrapping old vehicles. Your thoughts 

The scrappage scheme has to move in the right direction. These things take time in the beginning; but once they start, they pick up. We are very positive about it. We have to understand why the truckers are not coming forward for scrapping their old trucks. Currently, the scheme is voluntary. We have to make it attractive for truckers so that they have the motivation to scrap their old vehicles. If we can provide better alternatives to the person driving a 15-year old vehicle, and make it commercially viable, then there should not be a problem. In the case of passenger cars, there is an emotional attachment, but in the case of trucks, it is a business decision. 

What can boost exports from India? 

A lot of exports of commercial vehicles from India happen to South Asian countries — Sri Lanka, Bangladesh and Nepal. These countries are currently under pressure because of foreign exchange situation in these markets. They have put curbs on imports. The government has been talking of rupee trade, and hopefully that will happen. Once this happens, we can have more exports to these countries. Indian trucks can now compete with Japanese trucks in terms of technology. So, there is more potential for exports to Indonesia, Thailand and other South East Asian, Latin American and African countries.