Six airbags might be difficult for car manufacturers to offer

Recently the Ministry of Road Transport and Highways of India drafted a notification to mandate six airbags in vehicles carrying up to eight passengers and forwarded it to carmakers. However, the response from the auto industry does not seem to be a very elated one. Automakers have raised their concerns in the topic of airbag capacity increment in the face of semiconductor shortages and car manufacturers’ ability to adapt their vehicles to suit the intended six airbags within the stipulated period.

The notification issued on January 14, 2022, demands that cars of the M1 category (passenger vehicles up to eight-seater) produced from October 1, 2022, shall come equipped with six airbags to protect their occupants from frontal and side-impact collisions. However, the carmakers in the country are now contacting the government of India through the Society of Indian Automobile Manufacturers (SIAM) to see if the notification’s implementation date can be pushed back due to a number of difficulties such as airbag supply, cost inflation, and semiconductor scarcity.

Automakers in the country are concerned over the new mandate as the current situation of semiconductor shortage would get further amplified as airbags deployment is controlled by sensors that are managed by semiconductors. So if the regulations come into place by the set dates manufacturers would have to source three times the semiconductor chips as they are currently using and this will, in turn, increase the load on the supply chain causing a long delay in the delivery of vehicles.

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According to the notification, cars “shall be fitted with two side/side torso airbags, one each for the persons occupying front row outboard seating positions, and two side-curtain/tube airbags, one each for the persons occupying outboard seating positions”. What this means is that not only the airbag supply chain will be burdened, it will also lead the manufacturers into redesigning the entire interior of the vehicles.

“Representations to the government are done because it will need a lot of changes to the design of the vehicle, which is time consuming. There is no one-size-fits-all. You will have to redesign the interiors and the development cycle is pretty long. Based on this success, the vendors will be in a position to expand capacity.” said Sunil Bohra, Group CFO and Executive Director, Minda Industries. He also added, “While the government in its right intentions set October 1 as the date, practically this date will be very challenging. Our gut feeling is that it will be 1-2 years before we have 100 per cent implementation,”

As of now, carmakers are yet to assess the cost increase owing to the inclusion of extra airbags, however, industry experts expect a Rs 10,000-15,000 increase per car. This price hike will also directly affect car buyers resulting in a short term vehicle demand problem. If the notification is implemented, the airbag industry’s revenue is likely to increase from roughly 1,100 crore to more than 4,000 crore. The increase of this

The global non-profit organization International Road Federation also commented on the notification by saying that India’s idea of mandating six airbags may not necessarily be a good idea and that too for more than just one reason. The organization stated that the mandate is against the country’s ‘make in India’ a.k.a. ‘Atmanirbhar Bharat’ initiative.

The IRF explained its statement by saying, “An airbag assemble primarily consists of 4 key components: sensors that assess the impacy, controller unit, inflator, and fabric. While airbag manufacturers have local units, most of the child parts are imported and that too from China. The companies here are just assembling these child parts and have a very low local value addition. The 6 airbag regulation will increase imports from China and fill the pockets of foreign MNCs. This is completely against the national vision of Atmanirbhar Bharat (made in India) pronounced loud and clear by the Hon’ble Prime Minister.”

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