BS-VI norms to hike cost of two-wheelers by 10-20 per cent: ICRA

The ICRA, an Indian credit rating agency, has issued a statement saying the proposed BS-VI emission norms for two-wheelers may increase costs of the vehicle by 10-20 per cent. It came at the time when the Ministry of Road Transport and Highways (MoRTH) has issued a notification that all automobiles would need to comply with BS-VI norms by 2020.

The older bikes comply with BS-III emission norms. From April 2016, all-new two-wheelers have started to comply with BS-IV norms, while the ones on sale will move to BS IV by April 2017. Most of the Indian two-wheelers use carburettors which are cost-effective, but in order to comply with BSVI norms, Electronic Fuel Injection (EFI) needs to be adopted. This would impact the cost of production and drive up the price of two-wheelers.

The average difference between a carbureted and fuel-injected two-wheeler of the same make and model is Rs 8,000-9,000. The Hero Glamour Fi, for instance, is priced at Rs 65,600 (ex-Delhi) while the price of its carbureted version is Rs 57,925.

Subrata Ray, senior group vice president, ICRA Limited, said, "The cost impact of EFI systems on two-wheelers with existing levels of localisation is expected to be significant, in the region of 10 per cent to 20 per cent for now. The costs, however, are expected to come down subsequently as parts in the EFI system get localised."

However, the challenge lies with the ancillaries who will find it difficult to localise entire EFI systems by 2020. Thus the impact of costs on the vehicle would remain high once EFI systems are adopted in 2020 but will begin to reduce as amount of localisation increases with time. Another challenge is difficulty to make BS-VI fuel available across the country in a short span of time.

EFIs are basically computer-controlled fuel delivery system that determines the precise amount of fuel and air mixture that should be supplied to an engine, based on environmental and riding conditions. On the other hand, the carburetor is mechanical device that delivers the air-fuel mixture to the engine, the ratio of which can be altered by a screw.

Compared to carburetors, EFI systems offer a lot of advantages. It offers better fuel economy, lower emissions, easier cold starts and longer life of the catalytic converter. So far, lack of demand, costs and need to price products competitively are the reasons why manufacturers have been shy of employing EFIs, especially in the commuter bike space.

There are a few exceptions though. Hero introduced the system in the Glamour. It was considerably expensive than its carbureted counterpart and did not sell as many number, but it showcased the advantages of EFI in small capacity bikes, particularly fuel-economy and emissions. Bajaj introduced the technology in the Pulsar 220 DTSFi but switched to a carb in the next update to the motorcycle. TVS had the Apache RTR 160 Fi on sale too, and the new RTR200V gets it as an option. Yamaha sold the R15 with fuel injection, and most of the 200cc plus motorcycles these days sport EFI.

The jump from BS IV to BS VI is aimed at bringing India's emission norms at par with those in the European Union. The adoption of EFI technology across segments is crucial. Cars that were sold in India began adopting fuel injection from the year 2000. In case of motorcycles, fuel injection's advantages far outweigh the slight hike in price, and it's a step that should have been taken long ago.