Mileage labels on cars soon. Fuel economy standards in 2015

Indian cars will soon sport fuel efficiency labels, similar to the energy-efficient rating system of electrical appliances. A star rating will be given to each car sold in India, depending on its ARAI tested fuel economy. This move has been in the offing for nearly 4 years now, and is a welcome initiative from the consumer's point of view. Instead of dabbling into fuel economy figures, they can simply refer to the star ratings and compare different models of cars. 

From 2015 onwards, certain fuel economy standards will be enforced. Any car which falls below the threshold (1-star rating) will not be permitted for sale in India. These standards will be applied to the entire fleet of each manufacturer. The average fuel economy of all the cars sold by a manufacturer will be considered, and any manufacturer not meeting the standard will be penalized with a fine of upto Rs. 10 Lakh, and a further penalty of Rs 10,000 for each subsequent day of non-compliance (upper cap of Rs 46 lakh). Thus, the challenge for every manufacturer will be to sell enough of the high mileage cars, so as to offset the lowering of the average by the fuel-guzzling models. European car manufacturers, in particular, will be severely affected by this legislation. 

The standard for 2015 is set at 18.15 km per litre and by 2020, this will have to be ratcheted up to 20.79 km per litre. As of date, the top ten manufacturers have an average fuel efficiency of 16.42 km per litre.

Expectedly, the proposal has been opposed by car manufacturers on several grounds - ranging from bad road conditions to poor fuel quality. Their association, the SIAM (Society of Indian Automobile Manufacturers - had asked for diluting the norms. The Government has rubbished their claims. The Government also noted that Bharat IV fuel standards are being implemented across the country, therefore fuel quality is a non-issue. These standards would bring Indian cars & technology at par with the European market by 2020.