400 deaths a day in traf­fic ac­ci­dents force In­dia to ramp up ef­forts to boost safety

The Buffalo News - - WORLD NEWS - By P R San­jai

In In­dia, more than 150,000 peo­ple are killed each year in traf­fic ac­ci­dents. That’s about 400 fa­tal­i­ties a day and far higher than de­vel­oped auto mar­kets like the United States, which in 2016 logged about 40,000.

Now, Prime Min­is­ter Naren­dra Modi’s govern­ment is at­tempt­ing to curb the car­nage on In­dian roads caused by ev­ery­thing from speed­ing two-wheel­ers to cars not equipped with air bags. A bill in­tro­duced in Au­gust 2016 – propos­ing harsher penal­ties for traf­fic of­fenses and re­quir­ing that au­tomak­ers add safety fea­tures – has passed the lower house of par­lia­ment and is ex­pected to go through the up­per house in 2018.

The wide-rang­ing changes are likely to boost man­u­fac­tur­ing costs for do­mes­tic and for­eign car­mak­ers in In­dia. The South Asian coun­try will be the world’s third-largest car mar­ket af­ter China and the United Stat­ess by 2020, ac­cord­ing to re­searcher IHS Au­to­mo­tive. The World Health Or­ga­ni­za­tion es­ti­mates that traf­fic crashes cost most coun­tries about 3 per­cent of their gross do­mes­tic prod­uct.

The U.K.-based non­profit Global NCAP, which stud­ies the qual­ity of ve­hi­cles, has over the years as­signed a zero star rat­ing to many small ve­hi­cles sold in In­dia – an as­sess­ment that there could be life-threat­en­ing in­juries in a crash at 40 miles per hour. Past ef­forts in In­dia to boost road safety haven’t taken off, and the suc­cess of this one will de­pend on how strictly it is im­ple­mented.

In­dia “has de­layed 20 years in mak­ing safety fea­tures manda­tory,” said Di­nesh Mo­han, a pro­fes­sor at Noida-based Shiv Nadar Univer­sity. Glob­ally, man­u­fac­tur­ers haven’t usu­ally added such safety el­e­ments “un­til and un­less they were forced to do so by manda­tory govern­ment reg­u­la­tions,” he said.

A spokes­woman at In­dia’s Min­istry of Road Trans­port and High­ways de­clined to give a tim­ing for the new law.

In­dian con­sumers are fa­mously price sen­si­tive when it comes to car pur­chases. Low-cost and no-frills com­pact cars have long been sold by com­pa­nies like Tata Mo­tors, Maruti Suzuki In­dia, a unit of Ja­pan’s Suzuki Mo­tor Corp., Re­nault and Hyundai.

These bud­get ve­hi­cles are usu­ally priced be­low 400,000 ru­pees ($6,300), and the new law is likely to re­quire that their man­u­fac­tur­ers add a string of fea­tures like airbags, au­dio speed warn­ings and anti-lock brak­ing sys­tems.

Costs for In­dian au­tomak­ers will shoot up by 7 or 8 per­cent af­ter the pas­sage of the new law and will be felt across the small car seg­ment, said Deepesh Rathore, Lon­don-based direc­tor at con­sul­tancy Emerg­ing Mar­kets Au­to­mo­tive Ad­vi­sors.

Ash­win Patil, an an­a­lyst with bro­ker­age LKP Shares and Se­cu­ri­ties, pre­dicts a short-term im­pact to the earn­ings of au­tomak­ers from the new act and said it could be a death knell for ul­tra-low-priced cars in In­dia as their cost could go up by as much as 100,000 ru­pees.

Man­u­fac­tur­ers some­times of­fer “all safety fea­tures for the mod­els that are sold in the in­ter­na­tional mar­kets where they have to sat­isfy manda­tory safety stan­dards, while they of­fer min­i­mum fea­tures for In­dian mod­els,” said Mo­han.

In 2015, Re­nault sold its Kwid in In­dia with­out a frontal airbag or anti-lock brak­ing sys­tem, earn­ing the model a zero rat­ing from Global NCAP at the time.

Bloomberg News

Traf­fic moves along a high­way dur­ing morn­ing rush hour in Delhi, In­dia. The coun­try sees about 400 deaths a day in traf­fic ac­ci­dents.

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