- 14 Sep 2023
- ICICI Securities
MEDIA REPORTS SUGGEST 6 AIRBAG NOT TO BE MADE MANDATORY IN PV’S DOMESTICALLY
News: As per media sources, Nitin Gadkari (Union Minister for Road Transport and Highways) has indicated that 6 airbags will not be made mandatory in domestic Passenger Vehicles, the rule which was supposed to be implemented from Oct 2023. This is amidst some of the large OEMs in the recent past indicating that they were discussing upon the same with the government given the cost implications for customers.
Views: This is marginally positive for entry level passenger car segment players like Maruti Suzuki which are witnessing demand headwinds in this space due to commodity and regulatory led substantial hike in vehicle prices. Though most of the manufacturers domestically were offering 6 airbags in top variants and some as standard feature, we believe such safety feature will ultimately be incorporated by domestic OEM’s sooner than later. On the ancillary front, Uno Minda was expanding in this domain with its new capacity expected to be commissioned by March 2024 and will largely witnessed steady demand prospects amid rise in premiumisation trend i.e. customers preferring more safety loaded vehicles.
Impact: Neutral