Auto component makers fear backlash

New Delhi: Automotive industry has been in a fix for a while now, concerning over the ban on diesel cabs and passenger cars. The apprehension is no more confined to the automakers only, even the auto component makers which provide emission solutions and diesel engine parts makers are also left in trauma. Further, the future of diesel as a fuel has become uncertain, due to diesel has been rated as a major polluter by policy makers and environmentalists.

Auto component makers also fear that sooner or later the heat will be felt at their levels too. “While the ban has not yet impacted ZF, but we know it could get impacted in the future," said Suresh K V, Country head, ZF India. "Not in sales maybe, but indirect impact will be there as we will have to adapt ourselves depending on how the OEMs are moving", since, OEMs have already started redefining their strategies by opting for smaller diesel engines and gasoline engines. "OEMs are already being forced to change according to the regulations. You can already see changes like Mahindra coming out with smaller engine," said Suresh.

Just after two weeks of Apex Court banning diesel engines above 2000cc in Delhi-NCR, Mahindra and Mahindra introduced 1.99 litre engine in Scorpio and XUV500 for the region.

As per the auto makers, the move towards gasoline is inevitable. "The ban in Delhi & negative sentiment about 'Diesel' engines, coupled with fuel deregulation policy of the Government has seen a gradual shift towards Petrol Engines," said V Madhavan, President - Group Business Development, Anand Group. "Over the last couple of years, we have seen diesel Engines drop from 47% to 32% currently."

Automotive industry has made its concern audible over the increasing negative outlook of policy makers towards diesel engines. Some industry leaders calling the decision of banning diesel engines ‘arbitrary’, have put forth the argument that the technology of diesel engines has improved a lot over the years and emission levels have decreased drastically. President of SIAM, Vinod Dasari, at the time of the decision by Supreme Court, had said that diesel engines in fact emit less CO2 than even gasoline engine.

Amid the wave of negative sentiment in the industry, some still do not see a huge impact of the ban on diesel engines yet. "The impact will be very minor on the industry as the OEMs as well as users have either found out a way or working on it. As far as Sriram Pistons & Rings is concern so far we have not got any request from our customers for change in Production schedule due to the ban on 2000cc and above diesel engines," says Ashok Taneja, MD & CEO, Sriram Pistons & Rings.

According to a recent report published by Techsci Research, “India Automotive Spark Plug Market Forecast and Opportunities, 2019”, India is the third largest automotive market in Asia after China and Japan. Subsequent to 2009 global economic crisis, the country’s automobile sector soared with significant rise witnessed on the production front. At present, almost all the major global automobile manufacturers have their operations in India. Cumulative sales of passenger cars, three wheelers and two wheelers in the country grew at a CAGR of over 10% during 2009-13. This has been significantly boosting the spark plug demand over the last five years. India offers great potential for robust continuing growth in automotive and allied sectors as the country still has significantly lower motorization rate compared to developed economies, which consequently means a huge opportunity for spark plugs suppliers.

As per TechSci Research, the decision is poised to impact the business of sparkplugs manufacturers in India. As the decision will drive more use of petrol engines, which will cascade impact on petrol engine components, including sparkplugs.