Motor traders in dilemma over abrupt Euro IV implementation | Daily News


 

Motor traders in dilemma over abrupt Euro IV implementation

No confirmation from Govt of fuel availability too

The recent Budget proposal to introduce Euro 4 engines and the safety features to be implemented by January 31, 2017 has seriously created a crisis situation in the Auto Industry.

The Budget has made it a prerequisite that vehicles imported to the country be equipped with Euro IV or above emission standards.

The Ceylon Motor Traders Association (CMTA) is of the opinion 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 all of a sudden introduction,that 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. The exact guidelines are not yet clear and are very vague even though a grace period till June 31, 2018 was granted for implementation, because it has not stipulated the categories of vehicles.

As a result at this moment of time CMTA members are 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 should comply to these regulations.

Whilst most passenger cars and SUV ‘simported from some countries will comply with, there is a serious concern with regard to the commercial vehicles in the transport sector.

The requirement of Euro IV standard for passenger vehicles are accepted for the sake of better environmental conditions even though it will make vehicles more expensive despite the time period given is insufficient. The commercial vehicle sector will also face a significant price increase, and in this instance one needs to analyze the pro and cons and the viability of introducing to the commercial vehicles. This will make things worse for the business community using the commercial vehicles which will become more expensive than what it is today.

The requirement of airbags for driver and passenger for commercial vehicles is a debatable question, as most manufacturers have not introduced air bags for both driver and passenger as this is not a mandatory requirement by most standards. However this too will push up the price further.

Whilst, CMTA considers these regulationsas a positive step contributing to the environment and safety standards it should be mentioned that there is a serious need to look at the need for such policies at this moment of time and process followed for implementation. (If the environment is the concern we could also look at strategies such as reducing the age of used truck and bus imports, and providing incentives for scrapping of used vehicles etc.)

At the same time it is worthwhile in investigating the cost benefit equation of these requirements for a country such as ours. Below highlighted are some of the areas that need attention of the policy makers as it seems these budget proposals are to be implemented without clarity of its clear objectives and merits. Shifting to a higher emission standard is a very serious decision that can affect all stakeholders in 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.

For example as of today there is no clarity as to how these are to be implemented. Who is the implementing authority? What mechanism is to be followed to ensure that the standards are maintained? Which of the methods will be used for this? Is BS-4 and SU-Lev standard equals to Euro IV ?etc.

The band new importers are the main casualties of this sudden proposal ignoring their rights and the contribution they make to the society as a whole. These established companies are the leading automobile companies that represent the manufacturers and those who do legitimate business by employing thousands, paying all taxes to the last cent and maintain a great degree of corporate governance.

It is a fact that these companies have to follow a proper process of homologation in order to import engines with higher emission standards and this can’t be done without having proper information such as the ones highlighted above.

It is also a fact that the world renowned manufacturers will need time in testing the fuel standards and will need specificstandards set in terms of technical and tolerance levels of the new standards before approving new products to a market. It is also evident that if applied as proposed the higher emission requirements will increase the cost of the vehicles by many folds, making them more expensive.

Above all there is a need to ensure that the Euro IV compatible fuel is available Island wide and the two companies CPC and LIOC involved in the business of importation and distribution of fuel are able to facilitate this process by ensuring the fuel availability with the right specifications so that these engines can run without issues.

As we understand this will be a major barrier as well as these oil companies might not be able to offer non contaminated Euro IV compatible fuel island wide in the shorter run.

In the above circumstances there is a crying need for the authorities to meet the trade representatives in order to clarify these and lay a plan that will spell out the entire process of implementation once the fuel availability is certified. If this is not a possibility it is fitting that these proposals are amended and set the implementation dates for latter date so that business can take place as usual for all concerned. (MFJ)


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