The market outlook for the Indian truck industry is strong, but stricter emission standards

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and entry of foreign players will drive technological developments by Indian manufacturers, global consulting firm KPMG has said.

“Just like in China and Russia, technological demands in India will slowly rise to meet a tightening of environmental legislation. However, in contrast to its emerging market peers, India’s plans to restrict emissions are not as advanced. China and Russia plan to implement nationwide Euro V equivalent norms by 2012 and 2014 respectively, it said in its latest report on the global truck industry.

Despite the introduction of Euro IV equivalent measures in the National Capital Region of Delhi and other 11 metropolitan areas, India has not announced any further nationwide measures above Bharat Stage III (Euro III) until today. To keep up with technically more experienced foreign manufacturers, local manufacturers will increasingly have to offer vehicles compliant with Euro IV-equivalent emissions limits — at least in the NCR and other metros like Chennai, Mumbai and Kolkata. This increasing regulatory stringency will slowly force the technological development of Indian manufacturers.

“In 2010, we saw many cities moving from Euro III to Euro IV norms and the rest of the country going from Euro II to Euro III norms. Emissions standards are an area where we clearly have to advance and be better prepared,” Ravi Pisharody, president - commercial vehicle business unit, Tata Motors said in the report.

The KPMG report also pointed out that Indian customers are gradually becoming aware of technologically more sophisticated products from foreign OEMs. A shift in customer demand towards greater quality, safety and reliability therefore seems likely in certain segments over the coming years. The main drivers for increased sophistication are large fleet operators and state-owned bus companies, which already expect a higher level of reliability and quality at a reasonable lifecycle cost. Additionally, economic indicators show previously neglected aspects of TCO (total cost of ownership) for Indian customers, such as fuel cost, will gain in importance over the coming years.

With the introduction of emission norms and in the light of emerging competition from foreign players, India’s leading CV makers Tata Motors and Ashok Leyland (AL) have come out with new platform of vehicles.