Will the Motor Automobile Act force demand for the automobile region?

Two events inside the car region demand our undivided attention: the Society of Indian car Manufacturers (SIAM) numbers for the sector in FY17 and the Motor Cars (Change) Invoice, 2016, which has been accepted with the aid of the Lok Sabha and turns into an Act after the Top Residence additionally gives it the all-clear. Confronted with critical challenges because of demonetization and Ultimate Courtroom’s ruling on BS-three stock in current months, is it a boon or a bane for the arena?


At 21.eight million Motors bought in FY17, the auto zone recorded 6.8 percent increase in FY17. Will the new Bill make lifestyles tough for the enterprise in FY18?

Prima facie, whilst the provisions of the Motor Motors (Modification) Invoice, 2016 appear stringent, it can go a long way in making the arena obvious, reduce the time taken to personal an Automobile, make Indian roads safer, and in reality propel demand for Cars in future.

At the transparency front, the Bill states that driving licenses and Automobile registrations could be linked to an individual’s Aadhaar card information. This past shows that on traces much like the evolved international locations, India is moving within the path of the ‘one social protection variety’ idea, that allows you to consist of all details of a person.

The Invoice presents for Aadhaar-primarily based verification for furnish of online services, together with learner’s license. Linking Car registration and driving licenses to the card will allow correct monitoring of registration of stolen Cars and facilitate an unbroken switch of Automobile registration from one nation to some other. The validity period for driving licenses is proposed to be accelerated too and the minimum instructional qualifications for shipping licenses won’t be required.



A key theme of the Invoice is to make roads more secure, besides increasing the reimbursement for the accident sufferer’s households by up to ten instances. The amendments to the Invoice additionally cater to third-birthday celebration coverage with a maximum legal responsibility cap of Rs 10 lakh in case of dying in a Vehicle coincidence and Rs 5 lakh if an extreme harm is continued. The stated quantity, but, will now not be the Top restriction, and the aggrieved family of the sufferer will still have a choice to withdraw the case or enchantment further. The Invoice also gives unique timelines for processing of insurance claims.


In the case of death in hit-and-run accidents, the Bill presents for an eight-fold boom in repayment to Rs 2 lakh. It seeks to herald radical reforms in the motor Motors regulation through slapping a heavy penalty on site visitors violators, defensive correct Samaritans and making Vehicle-makers answerable for design defects to cut road injuries. The fundamental intention of the Bill is “to store human lives”, as a whopping five lakh accidents take place every yr, claiming around 1.five lakh lives throughout the country.

Stricter consequences have been proposed for excessive threat offenses which include drunken using, dangerous driving, and non-adherence to Safety norms by using drivers (if seat belts and helmets are not worn). If a minor has induced a fatal twist of fate, the dad and mom/guardians can be held responsible and subjected to a 3-year jail time period, similarly to the cancellation of the Vehicle’s registration.

Designers and contractors exact inside the Particular Undertaking Record (DPR) might be held responsible for troubles pertaining to avenue Quality. Moreover, hints for taxi aggregators have also been said.

The Bill makes computerized fitness trying out for delivery Vehicles compulsory with effect from October 1, 2018, to reduce corruption in the delivery Department, even as concurrently improving the street worthiness of the Vehicle. The procedure for checking out and certification of automobiles is in all likelihood to be monitored extra correctly by bringing the testing organizations issuing vehicle approvals under the ambit of the Invoice.

Some of these measures, over the lengthy-run, will trigger a call for an increase for brand spanking new Cars, with a purpose to be higher geared up with the latest Protection capabilities. The Invoice must also upload to the call for Protection components supplied through the car ancillary businesses. at the same time as these modifications will add to the price in keeping with Car, given the growing desire for Protection functions by using Indian customers, we expect the same to be an easy pass thru.

Will this help Vehicle sales?

The authorities, through a distinctive feature of the clauses of the Invoice, goals to allow automobile sellers to register Automobiles at their personal stop thru inclusion of the purchaser’s information in a pan-India database. Simplification of intricate and time-eating procedures, on the whole resulting from registration delays by using the Regional shipping Workplace branches, will assist in less difficult and quicker liquidation of inventory and need to have a tremendous rub-off on the automobile area as an entire.

The Invoice endeavors to improve the delivery state of affairs in us of a by permitting States to grant exemptions for level and contract carriage permits (to promote rural delivery), public shipping improvement, ultimate mile connectivity, and passenger Safety and comfort.

Overloading vehicles will entice hefty fines going ahead, as is clear from the table above. This must translate into incremental demand for business Automobiles, and consequently, must also gain the ancillary phase.

In sum, the provisions appear fantastic for passenger Car groups like Maruti and commercial Car Producers like Ashok Leyland, apart from ancillary groups like Bosch and Wabco.

Amanda R. Dubose

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