Most mid-segment cars in India are priced higher than corresponding models in markets such as the US or Europe, but fall short of safety standards. Air bags may have made a difference in Gopinath Munde?s case.
Here?s a what-if situation: Would last week?s accident involving Union Rural Development Minister Gopinath Munde?s Maruti Suzuki SX4 have had a different outcome if it had happened on a motorway in Europe or the US? There is a good chance that such a side-impact collision of a similar intensity wouldn?t have been fatal because, for one, the passenger on the rear seat would have been expected to wear the seatbelt, which is mandated under law in those countries unlike in India. Second, the car would had been equipped with a combination of side-impact and rear-curtain airbags that are offered as standard equipment across models in those markets. These are safety features which could have helped minimise the whiplash impact that fractured Munde?s cervical spine and damaged his liver, causing death. Maruti Suzuki?s SX4 in India, like nearly all cars in its segment, is equipped with only two airbags, that too in its top variant.
When it comes to safety, mid-segment cars sold in India are vastly inferior to comparable models offered in markets such as the US or Europe. What makes it worse is that most sedans and hatchbacks sold in India, cutting across brands, are priced higher than comparable models abroad.
Take the new Toyota Camry Hybrid. The top variant of the car sold in India, which has four airbags, carries an ex-showroom price tag of Rs 30.59 lakh in Mumbai. Contrast that with the Camry Hybrid in the US, with 10 airbags as standard and a bevy of safety features, which carries a pre-tax price tag of $28,625 or about Rs 17.74 lakh (at a conversion rate of Rs 62/dollar). What makes this price difference starker is that the Indian version of the new Camry is being touted as the first ever locally manufactured hybrid car, which should have made it less expensive, considering labour costs and material costs in India are among the lowest in the world.
On safety features too, the Camry Hybrid in India falls short of its US cousin, despite the high price tag. The Camry Hybrid here offers vehicle stability control, back monitor with corner sensors and electronically controlled continuous variable transmission, among its list of standard fitments. The US version, on the other hand, is laden with features that include a patented ?star safety system? ? a suite of six safety features that includes enhanced vehicle stability control, traction control, brake assist and smart stop technology. It also offers whiplash-injury-lessening front seats and a function called ?safety connect? that offers Toyota?s patented emergency assistance, stolen vehicle locator, roadside assistance and automatic collision notification.
Similarly, the Volkswagen Jetta offers broadly the same safety features in both markets, but the Indian version comes at a higher cost.
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The most obvious explanation for the price difference in Indian and foreign markets is the higher rate of taxes in India. In India, by the time a new mid-segment sedan is driven out of a showroom, the buyer would have paid taxes that equal about 50 per cent of the vehicle?s basic price, including a tax for moving the car across state lines. ?Cars are priced higher in India because of the high taxes prevailing in our country. Taxes in countries such as the US or UK are one-third of what we have in India,? says Abdul Majeed, India Leader for Automotive Practice, PricewaterhouseCoopers.
?In India, a car is considered a luxury product and is therefore subjected to higher taxes, which is not the case in European countries or the US. Hence, taxes on cars in India could be 40 to 50 per cent higher than in Europe or the US,? says Manish Mishra, Partner at Link Legal India Law Services.
But this tax theory is debunked by the fact that there are cars models that are either cheaper in India or sold at roughly the same price as in markets such as the US. The Nissan Sunny, for instance, is cheaper in India than in the US, though the car has far less safety features here. The Hyundai Verna in India is priced only marginally higher than the comparable model in the US, with the cars in both countries offering roughly the same safety features. The top Verna model in India carries a price tag of Rs 11.52 lakh (ex-showroom, Mumbai). The same car, marketed as the Accent in the US, with six air bags as standard across all models, retails at $14,645, or slightly over Rs 9 lakh.
But it?s safety that takes a backseat in cars available in India and the buck simply gets passed on ? from the manufacturers to the consumers to the government. The Suzuki Swift in India is cheaper when compared to the corresponding model sold in Hungary, Suzuki?s European manufacturing base, but is not a patch on its European cousin which has seven airbags (Swift in India has two), front seats that reduce the risk of whiplash injury in the event of a rear impact and a host of other features.
In India, the Hyundai i10 was one of three cars that failed front impact crash tests by the UK-based Global New Car Assessment Programme (NCAP) in January 2014. The i10, along with Maruti Suzuki Alto 800 and Tata Nano, were found to have ?inadequate vehicle structures that collapsed to varying degrees?, resulting in high risks of life-threatening injuries to the occupants. The Ford Figo and Volkswagen Polo also received zero points for adult protection ratings in a frontal impact at 64 km/hour. NCAP, however, noted that these two cars had structures that remained ?stable? and, therefore, with airbags fitted, protection for the driver and front passenger would be ?much improved?. The Swift in India was not among the cars tested by NCAP though the European version has a five-star rating. Similarly, Hyundai?s i10 had a five-star NCAP certification in the UK (this car has now been replaced with the Grand i10 in Europe).
The explanation offered by carmakers for going easy on safety is that safety norms prescribed in the country do not stipulate airbags or specific standards on reinforcement of vehicle structures, as opposed to the stringent norms followed in markets such as the US, EU or even ASEAN markets. So in India, safety features end up being frills that add to the cost of the car, putting it out of reach of most buyers.
Maruti Chairman R C Bhargava had in an earlier interview to The Indian Express said, ?We will start making cars that fulfil global safety standards. Then a large number of people will not be able to buy those expensive cars and will have to make do with two-wheelers. What is safer for him? Will his family be safer on a two-wheeler or a car that does not meet those high standards of safety? Our cars today meet Indian standards, which are based on European standards. You want even higher standards? At whose cost will it be??
But Dinesh Mohan, the Volvo Chair Professor Emeritus at IIT Delhi, says safe doesn?t have to mean expensive. ?Safety features such as airbags, ABS (anti-lock brake system) and rear wipers would only add about
Rs 20,000 to the cost of the car. But because it is not mandatory, car manufacturers provide these features only in top-end versions of cars and bundle it with other features making it expensive by over Rs 1.20 lakh, depriving the Indian car buyer of a variant that has safety features,? he says.
Manufacturers say consumers get what they pay for, and very few want to pay for a safer car. When Maruti Suzuki drew up the preferences of Indian car buyers ? tabulated over time from enquiries made at the point of purchase ? it found safety features such as ABS and airbags had come in at a lowly eighth position, while bells and whistles such as airconditioning, power windows and central locking were much higher up. Maruti Suzuki executives also point to the case of the driver-seat airbags offered in the top variant of the Wagon-R, a model that was subsequently withdrawn due to lack of interest among consumers.
Responding to questions on safety features, both Hyundai and Toyota said they follow rules mandated in India. ?Hyundai vehicles are designed and built to meet all the prescribed safety standards set by Indian Regulatory Authorities,? the company said an email. N Raja, senior vice-president, sales and marketing, at Toyota Kirloskar Motor, said, ?Every country/region has different safety norms and Toyota complies to the safety norms of the region it operates in.? The company did not offer an explanation for the differential pricing.
Experts say carmakers are unlikely to be prodded into offering safety features unless the government mandates it through clearly prescribed norms. They also say the current practice of automobile manufacturers heading committees that decide on safety features needs to change. ?Unless there is an independent agency with representation from all stakeholders, we will not be able to enforce safety features in our cars. One such move would be the formation of a Road Safety Board, which is pending,? says S P Singh, senior fellow at the Indian Foundation of Transport Research and Training.
After Munde?s accident, Minister of Road Transport and Highways Nitin Gadkari has pledged to beef up road safety norms ?in line with global standards? and ?upgrade? norms for car testing. ?We are working on bringing out a New Car Assessment Policy, plus better norms for small cars,? a senior ministry official said.
Till then, we?ll have to simply buckle up.
Hyundai Verna
India
Safety features: 6 air bags, anti-lock braking system (ABS), electronic brake force distribution
Price: Rs 11,52,000
US
(The same car is badged as Hyundai Accent in america)
Safety features: 6 air bags, tyre pressure monitor system, occupant classification system, vehicle stability management system
Price: Rs 9,07,990
Toyota Camry Hybrid
India
Safety features: 4 airbags, hill start assist control, vehicle stability control, impact absorbing vehicle, back monitor with corner sensors, electronically controlled continuous variable transmission
Price: Rs 30,59,000
US
Safety features: 10 standard airbags, including an advanced airbag system
for the driver and front passenger, comes with a patented star safety system, a suite of six safety features that includes enhanced vehicle stability control, 24 traction control, anti-lock brake system, electronic brake-force distribution, brake assist and smart stop technology. Whiplash-injury-lessening front seats engineered to yield in a controlled fashion in certain rear-end collisions and a function called ‘safety connect’ that offers emergency assistance, stolen vehicle locator, roadside assistance and automatic collision notification.
Price: Rs 17,74,750
Nissan Sunny Xe
India
Safety features: 1 airbag, electronic brake-assist system, electronic brake-force distribution
Price (1.5 ltr engine): Rs 6,55,000
US (Marketed as Nissan Versa S)
Safety features: 6 airbags, anti-lock brake system, electronic brake-force distribution, brake-assist system, vehicle dynamic control and traction control
Price (1.6 ltr engine): Rs 7,43,380
Volkswagen Jetta
India
Safety features: 6 airbags, electronic stability control, anti-lock braking system with brake assist, anti-slip regulation, electronic differential lock, front passenger airbag deactivation, brake pad wear indicator
Price (2.0L CR TDI {MT}) : Rs 15,52,605
US
Safety features: Front seat safety belt pretensioners with load limiters, 6 airbags, height-adjustable front seat belts, safety belt emergency locking retractors for all seating positions, intelligent crash response system, buckle switch for airbag sensors, crash optimised pedal controls, anti-lock braking system, power-assisted front vented disc brakes
Price (base level diesel in AT): Rs 13,20,290
Suzuki Swift
India
Safety features: Two airbags and
anti-lock brake system
Price (Manual, petrol): Rs 5,96,000
Hungary
(Suzuki?s production hub in Europe)
Safety features: 7 airbags, including 1 knee air bag, stability-promoting ESP, a patented Daimler AG technology for controllability on diverse road surfaces, and front seats that reduce the risk of whiplash in the event of a rear impact. Anti-lock braking system and electronic braking-force distribution. The front seatbelts are also fitted with pretensioners and force limiters. Light, reinforced, energy-absorbing body in which front crumple zones help absorb impact energy and direct it away from the cabin in line with Suzuki?s proprietary Total Effective Control Technology concept
Price: 3,699,000 huf (Hungarian Forint) or Rs 9,98,730 @ Re 0.27/HUF as on April 22
Prices for cars in India are ex-showroom, Mumbai
