Why proposal for tighter emission norms has triggered a small vs big car debate, Pg15

Key Highlights:

• India plans to tighten fuel-efficiency rules under CAFE 3 from FY28, leading to debate within the auto industry regarding treatment of small vs. large vehicles.
• The proposed framework uses a weight-based formula, requiring lighter cars to achieve steeper improvements in fuel efficiency compared to heavier SUVs.
• Maruti Suzuki expressed concerns that CAFE 3 norms may disadvantage small cars, while Tata Motors stated they have no concerns about meeting the norms.
• SIAM members have mixed views on allowing car models with specific characteristics to claim a further reduction of 3 g CO₂/km.

Detailed Insights:

• The core debate revolves around the formula: (0.002 x (W – 1170) + c), where lighter cars face disproportionately stringent targets, potentially impacting affordability.
• Companies with predominantly small car portfolios fear that strict targets could make entry-level cars unaffordable, shifting the market towards larger, pricier vehicles.
• Some manufacturers suggest the proposed changes to CAFE will encourage "brick in the boot" strategies, where manufacturers will make bigger cars since the target for heavy cars is comparatively relaxed.
• CAFE 3 norms allow certain car models to claim a further reduction of 3 g CO₂/km, but SIAM members have mixed views on the subject, with some wanting the reduction to be increased.
• India's CAFE norms also propose a movement from MIDC to WLTP, which produces more accurate, real world measurements.

Key Concepts Involved:

• CAFE (Corporate Average Fuel Efficiency): Regulations that mandate a minimum average fuel efficiency for a manufacturer's entire fleet of vehicles.
• MIDC (Modified Indian Driving Cycle): A standard test cycle used to measure fuel efficiency and emissions of vehicles in India.
• WLTP (Worldwide Harmonised Light vehicles Test Procedure): A global harmonized standard for testing the emissions and fuel consumption of light-duty vehicles.