Euro IV fuel standard triggers auto industry crisis
State plans to introduce Euro IV engines and safety features for new vehicle imports have created a crisis situation in the auto sector, motor traders say. This requirement was announced in the budget to ensure imported vehicles are equipped with Euro IV or above emission standards.
The Ceylon Motor Traders Association ( CMTA) says that even though they welcome the decision to implement these policies, the policy makers should have given serious thought about its implication and of its hasty introduction of Euro IV fuel standard.
This action will adversely affect the average vehicle buyer as well as the commercial operations of all businesses and the franchise holders of brand new vehicle importers, a CMTA official told the Business Times.
The exact guidelines are not yet clear and very vague, and even though a grace period till June 31, 2018 was granted for implementation it has not stipulated the categories of vehicles, he added.
CMTA members are now unable to place orders for commercial vehicles considering the cost factor and the lead time as the authorities have still not decided the type and category of vehicles that would imply, he disclosed.
Whilst most passenger cars and SUV’s imported from some countries will comply with these new rules, there is a serious concern with regard to the commercial vehicles in the transport sector, he pointed out.
The requirement of Euro IV standard for passenger vehicles are acceptable for the sake of better environmental conditions even though it will make vehicles more expensive, he said adding however that the time frame given is insufficient.
The requirement of driver and passenger airbags for commercial vehicles is also debatable since most manufacturers have not introduced both air bags as this is not a mandatory requirement by most standards, he said pointing out this action too will push up the price further.
Shifting to a higher emission standard is a very serious decision that can affect all stakeholders on different fronts. For this ideally there should have been a proper consultation process with the trade representatives and experts in the field.
The policy implementation had not even considered the professional approach taken worldwide in implementing this type of new policy by gradually uplifting standards without jumping many steps ahead at once, he said.
Above all there is a need to ensure that the Euro IV compatible fuel is available island-wide and the two fuel suppliers (CPC and LIOC) are able to facilitate this process by ensuring fuel availability with the right specifications so that these engines can run without issues.
This will be a major barrier as well as these oil companies might not be able to offer non-contaminated Euro IV compatible fuel across the country in the shorter run, he warned.