The year 2020 is bringing a sea of change to the Indian automotive industry. A number of landmark regulations will be coming into effect this year ranging from safety regulations to emissions regulations. With the growing pollution crisis looming large, the Indian government has pushed forward the introduction of Bharat Stage VI emissions regulations to April 1, 2020.
A frequent question that is emerging is whether owners of existing BS4 cars should upgrade to new BS6 standard vehicles. The direct answer to this question is a clear no. However, the need to upgrade is more nuanced than it appears. There are a number of factors that could influence your decision to upgrade and we explore these reasons to help you make a better decision.
What is BS-VI?
In order to regulate pollutants from vehicles, the Indian government introduced Bharat Stage Emission Standards (BSES) or Bharat Stage in 2000 and based the regulations on European standards. Since then, the emissions standard has gone through four revisions, with BS4 being the last revision. On April 1, 2020, BS6 will be implemented, bringing with it more stringent regulations that will significantly reduce the Particulate Matter (PM) and Nitrous Oxide (NOx) emissions. As per the regulations, the aim is to cut these emissions by as much as 80%. The introduction of BS6, and skipping of BS-V, will also bring Indian regulation standards in-line with European regulations.
The introduction of BS6 requires manufacturers to upgrade existing engines or develop new engines to meet the emission standards. Unfortunately, the high cost of redeveloping engines, especially diesels, is deterring many manufacturers from investing in the change. As a direct result, certain BS4 cars are planned to be discontinued. Maruti Suzuki, for example, plans to eliminate its diesel line-up at the lower price range as the higher costs will directly impact the price of the car, making them tough sells for prospective customers.
If you were planning to buy a new car in 2020 it would be best to delay the purchase till after April. This will allow you to buy a car that is compliant with present regulations, making it better for the environment while also ensuring you have better resale value in the future.
While there are heavy discounts on new BS4 cars as dealers clear stocks, it makes better sense to buy pre-owned cars to get a better value for your money if you want to buy a BS4 car.
If you are a current owner of one of the discontinued models, then read on to find out whether you should be upgrading to a BS6 car.
Cars Bought Before 2015
BS4 was introduced in 2010 for vehicles in Delhi NCR and 13 other cities, with nationwide implementation coming in 2017. Cars bought between 2010 and 2014 will be showing their age, and while they can still be used on road, the value of the car will depreciate significantly with the introduction of BS6. Selling your used car in the coming year will allow you to get a good value for your car and reduce the cost of upgrading to a newer BS6 vehicle in the near future.
On the other hand, retaining your car for a few more months may prove to be beneficial as you await the availability of BS6 cars and fuel in your city or town. In this case, it is best to reach out to your local dealers to get an estimated timeline. This should allow you to plan your upgrade to BS6 and prepare accordingly.
Cars Bought After 2015
When it comes to cars bought between 2015 to 2019, there is a significant grey area. The value of these cars will not depreciate to the degree of the older BS4 cars, owing to the age of the car as well as the new technologies and features present in these cars. Some manufacturers, like Kia and Maruti Suzuki, have also been introducing BS6 models of their cars since 2018, in preparation for the regualtion change.
If you are on the fence, then it makes more sense to retain your current car as most of the newer BS6 cars are similar in features apart from the engine.
However, if you are already considering buying a new car, waiting and upgrading to BS6 is the sensible option as you get to sell your relatively new used car for a very good price while significantly discounting the price of your new BS6 car.
With the introduction of new regulations, there will be a shift in the new and used car market. In this new paradigm, the used car market will offer a great value proposition for prospective car buyers and sellers
While the new car market shifts to the new standard, the used car market will see an influx of BS4 vehicles that are still registered and legal to drive on Indian roads. The used car market will offer a great value proposition in the year ahead for both car buyers and sellers.