Re: Government wants to make Airbags & ABS standard on new cars The new passenger vehicle safety norms in India, due to kick in with the Bharat New Vehicle Safety Assessment Programme (BNVSAP), could lead up to the development of an all-new market - car airbags!
According to a report by the Investment and Credit Rating Agency Limited (ICRA), India's airbag market is expected to swell to Rs 1,900-2,300 crores by FY2020.
Although the airbag market is dominated by foreign players such as Takata, Autoliv, Toyoda Gosel, etc., at the moment, prospects of such a sizeable growth in the next 5 years has prompted some Indian component manufacturers to enter this field as well.
But the ICRA has predicted that the penetration and value addition of domestic suppliers won't be high in the near-future as their technological capabilities are still limited, as is the scope for backward integration. But once the high import quotient in airbag technology (sensors & inflators) sees manufacturing on a large scale on the domestic front, the costs associated with this equipment could come well down. Quote:
“Although the proposed safety standards don’t make airbags mandatory but in order to achieve adequate safety ratings for frontal collision, airbags would become a necessary fitment. We believe this will also open up a sizeable market opportunity (Rs 19-23 billion by FY 2020) for airbag suppliers as its penetration in PVs could increase exponentially from approximately 30-35% (at present) to nearly 90%,” the agency said in its report.
Under the new norms, passenger vehicles will receive star ratings based on how they perform under various crash tests and associated parameters. These norms will come into effect from October 2017 for new models and October 2018/19 for all the existing models.
The import content in airbags currently stands at 60-80% as the key components i.e. inflator and sensors are imported. Developing these locally would require scale and technical capabilities, but once these are installed the economies of scale could even make India a big exporter of safety equipment like airbags to other parts of the world, thus driving the costs down even further.
| Autocar Professional |