How will you benefit from investing early in mutual funds?

The Indian automobile industry is maturing fast. Not only is it taking technological transformation such as introducing electric vehicles but also is it upgrading driver and passenger amenities inside a vehicle such as adoption of communication and recreational technology. However, a fundamental aspect of vehicles that has been neglected down the entire journey from fuddy-duddy cars of the controlled economy to the smart cars of today is the safety features.

One of the critical safety equipments in any vehicle is airbags. Ironically, the safety features vary according to the price of the vehicle. While expensive vehicles have six airbags to protect all the passengers in a vehicle, an overwhelming number of cars on Indian roads do not have a single airbag. The practice sends a retrograde message— that safety can be compromised for those buying cheaper cars. In other words, their lives matter less. It is almost as outrageous as suggesting that economy class passengers should have less safety features than business class or first-class passengers in aircraft, trains or ships.

Union minister of road transport and highways Nitin Gadkari has rightly started pushing for airbags as standard safety measures for vehicles. He floated the idea both with automobile manufacturers and also said it in public. If he can get the idea implemented, he would be rectifying not only a wrong perpetrated by the market but also establishing a rule not to compromise with fundamental issues such as safety.

Fortunately, the process of making airbags mandatory was set rolling in December 2020, when Gadkari’s ministry issued a draft notification making it mandatory to fit dual airbags in all vehicles from April 1, 2021. The date was later pushed to the end of the year due to disruption by the pandemic. No industry can ignore safety features on the plea of affordability and the automobile sector should not be an exception. Automobile companies must work with vendors to bring down cost implications. Since most cars sold in the country are models without airbags, making them mandatory would also help in reducing cost due to the scale effect. When all manufacturers start incorporating it, buyers would not be in a position to differentiate between brands on the price differential. It would be a level- playing field with adequate safety features.