New Delhi - India has one of the world's worst road-safety records, with one person killed in a road accident every four minutes - 141 000 in 2014. Yet less than a third of the 2.6 million cars sold every year in this cost-conscious market have airbags fitted.
But a planned law that will impose crash test standards by 2017 is creating an opportunity for makers of safety equipment, as cars without airbags will achieve only the lowest safety ratings after tests. That, for the first time, will force consumers to directly consider the risks they run by buying cheap.
Some of the world's largest airbag makers, such as Autoliv, Takata, TRW Automotive and Toyoda Gosei, are already gearing up to cash in.
“We expect that within five years the large airbag makers will have a manufacturing hub in India,” said Ayay Bandopadhyay, automotive research analyst at Transparency Market Research.
CHEAP CARS vs SAFETY
Airbags in India are expensive mainly because most of the parts, such as inflators, are imported. And without rules imposing their use in a country of poorly maintained vehicles and overcrowded, badly lit and potholed roads, carmakers often opt not to add a costly component that could drive up prices.
“I think we have made automobiles in India too cheap,” said Vijay Chhibber, secretary for the road transport and highways ministry.
“In trying to make everything cheap, if we are going to reduce our safety standard it is not worth it.”
The new rules, part of the Road Transport and Safety Bill, do not directly propose airbags, but instead make crash tests mandatory for new models sold in India from October 2017.
“An airbag is only an instrument of road safety,” Chhibber said. The new rules will be discussed in India's upper house of parliament this year before they become law.
Quality issues will be a concern for carmakers, however.
Takata hit headlines after carmakers recalled millions of cars to replace airbags made by the company after some exploded too violently, spraying shrapnel into passenger compartments. Eight deaths and more than 100 injuries have been linked to faulty Takata inflators.
In India, makers including Honda, Toyota and Nissan recalled cars after the Takata defect was reported.
Several carmakers in India, including No. 2 seller Hyundai, still import airbags.
But Kaushik Madhavan, automotive head at Frost & Sullivan, said even cautious carmakers would eventually have to go local.
“Carmakers have to realise that if they have to offer competitively priced products with all the safety technology, they have to be sourced locally,” he said.
Reuters