Bharat NCAP: What It Means For the Auto Industry With high safety standards, Indian cars will be able to compete better in the global market, increasing the export potential of car manufacturers in India

Nitin Gadkari, Union Minister of Road Transport and Highways launched Bharat New Car Assessment Programme (Bharat NCAP) in New Delhi aiming to enhance road safety by elevating vehicle safety standards for up to 3.5-tonne vehicles in India. Bharat NCAP will be implemented from October 1, 2023.

"The programme aims to provide a tool to the car customers to make a comparative assessment of crash safety of motor vehicles available in the market. Under this programme, car manufacturers can voluntarily offer their cars tested as per Automotive Industry Standard (AIS) 197," said a release by the ministry.

"Based on the performance of the car in the tests, car will be awarded star ratings for Adult Occupants (AOP) and Child Occupant (COP). Potential car customers can refer to these star ratings to compare the safety standards of different vehicles and accordingly make their purchase-decision," it added.

Over the next decade, the automotive industry is likely to see some significant transformations at a global level. Principal transformations being the shift of growth in demand for automobiles from developed nations to developing nations. A relentless pursuit of economies of scale and scope in design and engineering of automobiles and components, while pursuing low-cost manufacturing destinations will fuel growth.

India aims to double its auto industry size to INR 15 lakh crores by end of year 2024. "There has been an FDI inflow of $33.77 billion in the industry from April 2000 till September 2022, which is around 5.48 per cent of the total FDI inflows in India during the same period," said a report named the Automobile Sector in India.

The Need

It is expected that the demand for safer cars will increase, encouraging car manufacturers to comply with customer needs. With high safety standards, Indian cars will be able to compete better in the global market, increasing the export potential of car manufacturers in India. The concept of safety rating of passenger cars empowers consumers to make informed decisions. Additionally the program will encourage manufacturers to provide advanced safety technologies to earn higher ratings.

Explaining the process, Manish Raj Singhania, president, The Federation of Automobile Dealers Associations (FADA), said, "The safety facility has been created in India and it is not mandatory. It's optional. All customers can have a better understanding about the safety ratings of their vehicle, and they can choose, better quality vehicle in terms of safety and security."

A standardized evaluation method will also help customers compare safety ratings of different cars and help them choose an appropriate model. This program will eventually help market forces push vehicle manufacturers to offer safer vehicles, with potential of bringing everlasting change in the attitude of customers during the purchase.

"The Bharat NCAP programme being launched by the Ministry of Road Transport and Highways is very timely and apt, as the Safety Star Rating of the new Passenger Vehicles will go a long way in educating customers in making informed purchase decisions, which would now be very strongly influenced by the safety parameters of the vehicle. We are now happy to see that the Bharat NCAP protocol developed is at par with Global NCAP norms," said Vinod Aggarwal, president, SIAM.

Opportunities & challenges

With Bharat NCAP, the government is making it easier for the industry to introduce new models. "India has a significantly high number of accidents per day, and with roads getting faster the severity of accidents is likely to get worse. By bringing in crash and safety norms, we are addressing passenger as well as pedestrian safety. The automobile industry is coming out with more and more new models of vehicles, and this trend is likely to accelerate with EVs gaining market share. By having Bharat NCAP and local testing facilities, it is both easier, faster as well as much cheaper for automobile companies to test the cars compared to going abroad. India also has the potential of becoming a test center for other countries," said Anurag Singh, MD, Primus Partners.

The minister informed that the cost of testing from abroad is INR 2.5 crore and in India (under) Bharat NCAP it comes to INR 60 lakh, making room for good market penetration.

"There will be cost reduction. The long term focus should be on manufacturing safer vehicles and when our safety ratings will be accepted in qualified markets globally, it would automatically catapult India to be an export hub," Singhania said, adding that the auto market is evolving and a lot of new technologies are coming in. "When it comes to EVs, a lot of initial mishaps were reported, because of quality compromises. So, as a country, we have to focus on producing quality vehicles," he said, explaining the challenges.

Earlier, in a written reply in the Lok Sabha on 21st July 2022, the minister had informed that there will not be any impact on Cost of small/big automobiles due to BNCAP. "If consumers buy automobiles of higher rating, the number of deaths in road accidents are likely to reduce significantly. A study conducted by the National Highway Traffic Safety Administration (NHTSA), USA, indicates that frontal airbags alone can save up to 34 per cent of lives lost due to frontal collisions. Use of side airbags alone can save upto 31 per cent of lives lost due to side collisions."

Gadkari emphasized the importance of road safety in India, a country witnessing a staggering 500,000 annual road accidents resulting in 150,000 deaths, translating into a daily toll of about 400.