BS6 Compliance for Vehicles- What Corporate Fleet Owners must know?
By SMAS INDIA
19 March, 2020
With just over a month for the enactment of BS6 norms, Indian automakers seem edgy about the future purchases. So let’s dive deep into the upcoming BS6 emission norms and the significance of BS6 Compliance in India.
The Obligation of BS6 Emission Norms in India
The Supreme Court in its decree made it evident that sale of BS4 vehicles (cars, two-wheelers or commercial vehicles) will be stopped in India post the BS6 deadline on April 1, 2020. The apex court bench pronounced that only BS6 compliant vehicles shall be available for sale or purchase after April 1, 2020. The bench also stated the need of the hour to make a shift to a cleaner fuel use all across the country in accordance with the Paris Climate Agreement signed by India in 2016. It is now evident that the Indian government takes hold of the responsibility to lessen its carbon-footprint by 35-55% within the next 12 years from what was put down in 2005.
As a result, the government in collaboration with some oil companies has already initiated the roll out of BS6 compliant fuels in some parts of the country- like certain pumps in the Delhi/NCR region. Although the judgment did not fall in favor of the automobile industry, which is already sparing no effort to meet the BS6 deadline, this BS6 compliance move is undoubtedly great for the general public as cleaner and less polluting cars are the need of the hour.
BS6 Ready vs BS6 Compliant
Confused about BS6 ready and BS6 Compliant vehicles? Well, today keeping up healthy relations with our environment is really significant. And this is why automakers are working hard upon the powertrain to manufacture vehicles that are compliant to the BS6 emission standards.
BS6 Ready Engine?
There is a considerable difference between BS6 ready engine and BS6 compliant engine and comes with two explanations:
Automobile companies possess the technology to manufacture an engine that runs on BS6 fuel and adheres to BS6 emission norms. They have not been manufactured or launched yet.
The engine manufactured can run on BS6 fuel however the emissions do not follow the new norms. Almost all BS4 vehicles in India can run on BS6 fuel and the lubricating quality of new fuel is somewhat similar to the BS4 fuel.
BS6 Compliant Engine?
The vehicles running in India with a BS6 compliant engine run on BS6 fuel and produce emissions as per the BS6 compliant emission norms. Very few cars in India are BS6 compliant and there is no BS6 compliant diesel engine vehicle as engine runs only on BS6 diesel fuel.
How BS6 Compliance will affect vehicle fleet owners and businesses?
With the new BS6 emissions regulations ringing in from April 1, 2020; state of the art technology will be required to keep emissions in check, especially the new diesel engine vehicles. Diesel cars will require a complete new technology in order to cut back on emissions and as a result, new add-ons are likely to bring an upswing in the prices of diesel cars and widen the gap between a new petrol car and a new diesel car by around 2.5 lakh rupees if premium hatchbacks and compact sedan are taken into consideration.
Diesel vehicles and economic class motorcycles will witness a sharp rise in price, and this might keep buyers away for some time. In addition to it, the resale value for BS4 diesel cars is likely to decrease in few years (2022-2024) or earlier in case the government passes some rule that impacts the validity of BS4 diesel cars in India. People would not bother driving around their BS4 diesel cars until and unless forced by law to shift to BS6 vehicles. However, it will be better to hold your horses till 2021 if none of the current cars satisfy your itch to upgrade. Well, all the hoopla around BS4 and BS6 is likely to settle down by that time and you will eventually have more clarity. With prices of BS6 diesel engines to witness an upswing, customers also have the choice to choose vehicle leasing services in India with or without maintenance, all depending on the requirement. Auto leasing in India can cater to start-up entrepreneurs, MSMEs and corporate professionals.
How Vehicle Leasing Solutions can be the most Viable Option?
Well, the benefits of leasing go far beyond the perks of BS6 compliant vehicles. With vehicle leasing solutions, you can easily drive around with relatively less monthly fees and mechanical maintenance charges. Corporate car leasing companies like SMAS India can prove to be the most viable option in today’s BS6 compliant auto market. With car prices likely to increase substantially, businesses will prefer to have a corporate lease vehicle for 2-3 years and will avail a wide variety of tax benefits for the business. Moreover, companies that lease vehicles are also aware of the fact that their cost of maintenance and repairs are already included under the lease.
Therefore, it can be concluded that vehicle fleet solutions in India are likely to bring a pragmatic shift amongst businesses and corporates from April 1, 2020.
Commercial vehicles sale have remained low in the last one year due to enhanced efficiency of trucks because of increase in freight carrying capacity and implementation of GST. But the reduction in freight from manufacturing sector has curtailed the income of fleet owners which further have also hit demand for such vehicles. And apart from lack of demand, lessening financing options available from the NBFC sector have also kept fleet owners from the market.