In a measure to boost passenger safety, the Ministry of Road Transport and Highways has proposed to make it mandatory that an airbag be provided for the passenger seated on the front seat of a vehicle, next to the driver.
The proposed timelines for implementation are April 1, 2021, for new models and June 1, 2021, for existing models. At present, providing airbags for the driver is mandatory.
A draft notification to this effect has been published on the Ministry’s website and the Ministry has asked for comments/suggestions from all stakeholders over the next 30 days.
The government has been in talks with various stakeholders to maximise safety in vehicles, front-seat passenger airbag being one of the crucial ones. It was also in favour of dual airbags in the front as the current regulation (introduced last year) for only driver’s airbag is thought to be inadequate.
Most of the original equipment manufacturers (OEMs) already providedual airbags on their top-end vehicles, and only some companies including Ford India, Honda Cars India, Toyota and Volkswagen provide front airbags as a standard.
An airbag costs anywhere from ₹30,000 to a few lakh of rupees. So, making dual airbags mandatory in the front would mean price increase of the vehicles.
“If the entire cost of the front airbag is passed on to the consumer, the price hike should be ₹5,000-7,000,” Shashank Srivastava, Executive Director (Marketing and Sales), Maruti Suzuki India, told BusinessLine. “For already existing models, there is some development time required. With the increased demand for airbags, the supply chain has to ramp up quickly. Given that post the lockdowns, supply is still chasing demand, this may not be easy.”
A possible practical solution is to extend the deadline of the implementation till April 2022. “The OEMs will be discussing this and will be giving their suggestions to the regulatory authorities in this regard,” he said.
Srivastava said that almost all of Maruti Suzuki’s models have front-passenger airbags, either as a standard feature or as an option. “Those models where the passenger airbag is only an option will obviously see a cost-up and, hence, most likely, a price up as well. This is true not only for Maruti Suzuki but most of the industry,” he explained.
Impact on demand
On whether the price increase can have an impact on demand, Srivastava said: “Generally speaking, an increase in price leads to an adverse impact on demand. But of course, we have to see the added value that the new specs provide. In that sense, it is a little bit different from price increases due to input material cost increase where the specs remain exactly the same.”
Many entry-level cars currently come with only driver airbags, said Ashish Modani, Vice-President, ICRA. Given the increasing awareness regarding safety norms, OEMs should be able to pass on incremental price hike regarding the additional airbag to customers, which can come up to around ₹5,000, he said.
“These recent measures of mandatory ABS (anti-lock braking system) and airbags, as well as crash test compliance, will definitely help in improving the safety level of vehicles, especially in the entry-level segment where these features were earlier missing. In fact, in the highly competitive Indian PV (personal vehicle) market, a few OEMs are using safety aspects as product differentiators to attract customers and strengthen their brand positioning,” Modani said.
Over the last two years, there has been an increase in regulations by the government on both active and passive safety on vehicles. For instance, speed warning systems in vehicles and speed limit on roads have been monitored to reduce the number of road accidents.