New Delhi: India's leading truck and bus makers including Tata Motors and Mahindra & Mahindra are urging the government to exempt small commercial vehicles with maximum weight not exceeding 3.5 tonne from the stricter Corporate Average Fuel Efficiency (CAFE) norms, flagging affordability issues, similar to those cited for easing emission norms for small cars under the proposed CAFE 3 norms.
"Mandating CAFE norms for this segment (N1 - SCV less than 3.5T) at this point of time would impose additional cost burdens, affect affordability and adversely impact the livelihood of owner-operators and small businesses," the companies said in a presentation to the government. "In view of this, we reiterate the request to exempt NI category from CAFE regulations at this stage." A copy of the presentation has been reviewed by ET.
The CV makers emphasised that about 80% of small CV owners are driver-operators, reliant on the vehicle for livelihood. Purchasing a new vehicle in India requires more than 40 months of income, compared to 9-10 months in Europe, indicating a severe affordability gap. Also, a SCV owner typically earns '5-12.5 lakh annually, making the segment highly price-sensitive.
Additionally, much like in the small car segment, limited access to affordable loans from state-run banks, and greater reliance on non-bank lenders with high interest rates inflates the vehicle acquisition cost. Also, curbs on operating these vehicles in urban areas like time-of-day limits reduce asset utilization and the return on investment (ROI), they said, requesting the relaxation.
The CV industry's stance regarding CAFE norms comes at a time when some carmakers have raised concerns about Maruti Suzuki's proposal to the Centre seeking easier fuel efficiency norms for small cars.
India's largest carmaker says upgrading to more stringent regulations on car emissions may raise costs significantly, putting them out of the reach of buyers in the entry segment.
The CV makers further said post the exemption to small commercial vehicles from CAFE norms to enable data-driven policy evolution, the industry will be annually reporting to the Bureau of Energy Efficiency (BEE) on a manufacturer-wise basis N1 vehicle sales, including fuel-wise share and fleet average CO2 emissions for N1.
"Mandating CAFE norms for this segment (N1 - SCV less than 3.5T) at this point of time would impose additional cost burdens, affect affordability and adversely impact the livelihood of owner-operators and small businesses," the companies said in a presentation to the government. "In view of this, we reiterate the request to exempt NI category from CAFE regulations at this stage." A copy of the presentation has been reviewed by ET.
The CV makers emphasised that about 80% of small CV owners are driver-operators, reliant on the vehicle for livelihood. Purchasing a new vehicle in India requires more than 40 months of income, compared to 9-10 months in Europe, indicating a severe affordability gap. Also, a SCV owner typically earns '5-12.5 lakh annually, making the segment highly price-sensitive.
Additionally, much like in the small car segment, limited access to affordable loans from state-run banks, and greater reliance on non-bank lenders with high interest rates inflates the vehicle acquisition cost. Also, curbs on operating these vehicles in urban areas like time-of-day limits reduce asset utilization and the return on investment (ROI), they said, requesting the relaxation.
The CV industry's stance regarding CAFE norms comes at a time when some carmakers have raised concerns about Maruti Suzuki's proposal to the Centre seeking easier fuel efficiency norms for small cars.
India's largest carmaker says upgrading to more stringent regulations on car emissions may raise costs significantly, putting them out of the reach of buyers in the entry segment.
The CV makers further said post the exemption to small commercial vehicles from CAFE norms to enable data-driven policy evolution, the industry will be annually reporting to the Bureau of Energy Efficiency (BEE) on a manufacturer-wise basis N1 vehicle sales, including fuel-wise share and fleet average CO2 emissions for N1.
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