If the government does make safety features mandatory for all cars to be sold in India, the entire industry could take a collective hit of ~ Rs. 12,000 crore.
Mandatory safety features which would include ABS and airbags would result in a price hike of 10-15% across all variants, which will clearly not help the industry in recovering from the current sales slump.
This move could give a major blow to entry level offering in the A and B1 segment which sell purely based on price and their VFM quotient. With prices going up, the buying decision could change a bit.
Apart from making cars safer, the government has to implement other road safety measures as well which make the streets a better place compared to what they are currently.
However, we firmly believe that people could consider their lives more precious as opposed to a 30,000 – 40,000 rupee price hike and given that there is no other choice, buy the desired products.
The government is also preparing a new crash test programme specific for India, taking cues from the GLobal NCAP.
Source – BusinessStandard