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Industry Review of CAFE III Norms
India's auto sector is under review for new Corporate Average Fuel Efficiency (CAFE III) norms. The Society of Indian Automobile Manufacturers (SIAM) is leading discussions among its members to agree on an implementation timeline, but internal disagreements are significant.
Industry Divide on Small Car Leniency
A major point of disagreement concerns whether to offer incentives for smaller cars under CAFE III. Companies like Maruti Suzuki and Toyota Kirloskar want leniency based on a car's weight and price. However, larger automakers such as Tata Motors, Mahindra, Hyundai, and Kia oppose this, arguing that different rules for small cars could put safety at risk. This creates a tough choice for the industry.
Timeline Uncertainty and Government Pressure
Shailesh Chandra, SIAM President and head of Tata Motors Passenger Vehicles, stated that a meeting with the Bureau of Energy Efficiency (BEE) is planned soon. He did not provide details on draft rules or SIAM's final view before this discussion. The government has signaled that the CAFE III standards are expected to take effect on April 1, 2027, with no extensions planned. The industry's preparation and the precise start date are still heavily debated.
Broader Regulatory Environment
In related discussions, Chandra also commented on the Delhi EV policy, urging an "enabling environment" for electric vehicle adoption instead of mandates. SIAM supports lowering hurdles for zero-emission technology through incentives and improving charging infrastructure, aiming to drive natural consumer demand. This aligns with the industry's broader call for supportive policies as India moves towards cleaner transportation.