M&M to roll out BS-VI-compliant models from Q2FY20: MD Pawan Goenka

M&M Managing Director Pawan Goenka says the firm will continue to remain in favour of those looking for high-driving performance. Photo: Kamlesh Pednekar
Mahindra and Mahindra (M&M) Managing Director Pawan Goenka said on Monday that a switch-over to the stricter Bharat Stage (BS)-VI emission norms will make diesel vehicles expensive but not unaffordable.  According to him, it will continue to remain in favour of those looking for high driving performance. 

Meanwhile, the maker of XUV 5OO and Bolero will be ready to roll out BS-VI-compliant models, both in gasoline and diesel versions, by the second quarter of the ongoing fiscal, ahead of the April 1, 2020, deadline. 

M&M is on track with the internal cost target for the transition, said Rajan Wadhera, president, automotive sector, M&M. “My expectation is that for large vehicles – those above four metres – where we have up to 50 per cent goods and services tax (GST), a price increase of Rs 1 lakh is something that should be acceptable to customers. It should be close to Rs 80,000 for smaller diesel vehicles and for small petrol models, it should be Rs 20,000 to Rs 25,000,” said Goenka, while replying to a question on the average price hike one can expect in passenger vehicles after BS-VI. 

The company plans to discontinue the diesel KUV1OO as the cost of transitioning the 1.2 litre to BS-VI will be unviable. Having a diesel-heavy portfolio, the utility vehicle market leader has developed a new range of globally-competitive gasoline engines. 

One in every four buyers of its newly-launched compact SUV has opted for a gasoline version. Encouraged by the response of its XUV300’s gasoline model, the company is hopeful that its gasoline-powered models would find greater traction among buyers in the months ahead. Goenka sees late arrival in the segment as an advantage. “Given that we had no petrol engine at that time, we probably had an advantage as the petrol engines we would launch would be the latest technology products,” he said.

The leapfrog from BS-IV to BS-VI involved upgrading and overhauling the entire manufacturing ecosystem to ensure it can handle several thousand tests. It included calibration and validation. It also fitted in well with the technology choices while keeping a tight leash on costs, said Wadhera. 

To meet the objectives, M&M invested Rs 1,000 crore over the last three and half years and conducted extensive tests of 69 lakh kilometers on a fleet of 136 vehicles at 11 validation locations. It developed eight new engines, multiple new vehicle platforms and 1,482 parts. In the process, it filed over 30 patents. 

Goenka calls the transition a Y2K moment for the auto industry but was quick to add, “The challenge is not as much about being ready but managing the transition.” Companies will have to ramp down BS-IV and ramp up BS-VI in a short span of three months. It’s a humungous task for everyone in the value chain, he said.  

Meanwhile, availability of grade 6 fuel across the country continues to be a concern area for the industry. “There is a concern among the Society of Indian Automobile Manufacturers (Siam) members. We have been asking them (oil marketing companies) if they will be able to make the fuel available a few months before the deadline,” said Wadhera, who is president, Siam.

Automakers cannot sell or register BS-IV models after March 31. “We cannot switch to selling BS-VI overnight. We have to start selling from January and February. For that, the fuel has to be available throughout the country. BS-VI cannot run on BS-IV as it will choke the vehicle,” said Goenka, cautioning that any “last minute changes can be disastrous” and timelines have to be drawn well in advance to avoid any missteps. 

The last three and half years have perhaps been the most challenging for any product development and sourcing organisation in the auto industry in India, said Goenka, adding that nearly 700 people worked to make BS-VI happen. 

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