Small cars to be 5-15% costlier, albeit safer

Car prices across all segments are likely to go up by 5-15% next year as the Ministry of Road Transport and Highways has made it mandatory for installation of airbags and speed limiters from July 2019.

In India, it must be noted that largely, the A-segment hatchbacks lack most safety features, with few manufacturers offering a single driver-side airbag on high-end trims. During FY2016-17, of the 21 lakh cars sold, 5.42 lakh cars were from the A segment. 'Safety in India comes at a premium', and experts say that an imminent price rise may vary between 5% and 15% - for instance, a Rs 4 lakh car could see a 15% price rise, eventually costing Rs 4,60,000.

India registers high fatalities on its roads, with almost 1.5 lakh people dying each year. Minister of Road Transport, Shipping and Highways Nitin Gadkari has envisioned reducing road fatalities by a steep 50% by 2020.

"To achieve this goal, much needs to be done. One of the areas identified by the government is making vehicles safer. After examining the best practices around the globe, a road map for safety norms has been finalised," Maruti Suzuki India R&D Head C V Raman said.

In addition to airbags and speed limit reminders, all cars will also have seat belt reminders, reverse parking sensors and a manual override switch for central locking systems.

Carmakers are investing in facilities, testing and equipment to build advanced safety into vehicles, ahead of the deadlines set by the government. On its part, Maruti - the largest player in the market - has overtaken the competition, with 75-80% of its cars becoming compliant to the said norms a year ahead of them becoming mandatory.

Even each of Toyota's cars is equipped with at least two airbags. "We are way ahead of the curve. The customer sentiment towards safer vehicles is increasing, and they demand airbags. It's the industry's responsibility to provide them," Toyota Kirloskar Motor Vice Chairman Shekar Viswanathan told DH.