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2-3 wheeler emission norms get stricter - Views on News from Equitymaster
 
 
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  • Oct 5, 1999

    2-3 wheeler emission norms get stricter

    According to news reports, the Supreme Court (SC) is in favour of tougher 2-3 wheelers emission norms for vehicles plying in Delhi.

    The SC had already passed an order in April 1999 for emission norms pertaining to passenger cars. It now wants to impose Euro I and Euro II norms with suitable modifications for 2-3 wheelers. The Indian 2-3 wheeler emission norms are the most stringent in the world. Manufacturers have already made a commitment to the government that all vehicles sold in the National Capital Region (NCR) from January 1, 2000, will be compliant with the emission norms.

    Manufacturers cannot afford to take the SC ruling lightly. If they fail to make their vehicles compliant with the emission norms, they will not be allowed to sell their vehicles in the NCR. When Maruti's vehicles were not compliant the Euro emission norms, it was not allowed to sell cars in the NCR for a month, which affected its sales adversely.

    2-3 wheeler manufacturers will have to incur additional costs to ensure that their vehicles are compliant with the emission norms. This could affect their margins if they choose to absorb these costs (fully or partly), instead of passing it to the consumers. Given the competitive nature of the 2-3 wheeler market, manufacturers may pass only a part of the incremental cost to the consumer.

    Companies like Bajaj Auto and TVS Suzuki with a presence in all three segments of the two wheeler market - scooters, motorcycles and mopeds will be affected more than the others. Bajaj Auto with a presence in the three wheeler market looks likely to be affected the most.

     

     

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