Changes in emission, braking, vehicle alert norms to give a leg-up to auto component makers
Bosch Ltd, Tenneco Clean Air India Ltd, Endurance Technologies Ltd and Uno Minda Ltd are among the component manufacturers who have identified new opportunities arising from the implementation of expected norms in the country’s automobile business.
Over the next two years, many new regulations are expected to be introduced, such as anti-lock braking systems (ABS), acoustic vehicle warning system (AVAS), corporate average fuel emissions III (CAFE III) and tractor emission norms stage V (TREM V), aimed at improving safety and reducing emissions from vehicles. Timelines for the broader automotive industry’s transition to Bharat Stage 7 emission norms are yet to be finalised, but it is expected to happen within a few years.
While various automobile manufacturers, from two-wheeler manufacturers to four-wheeler manufacturers, are rushing to relax almost all of these new norms, auto component manufacturers are seeing these as new headwinds for their business.
The changes in regulations come at a time when Indian component manufacturers are having to deal with high tariffs in the US market, which accounts for nearly a third of the industry’s total exports.
More content per vehicle
Arvind Chandrasekharan, CEO, Tenneco Clean Air India, said: Mint He said in an interview that the company thinks the new legislation will help it achieve higher content per vehicle.
“[Higher] Content per tool consists of two parts. One is legislation. For example, BS6 to BS7, TREM4 to TREM V for tractors and CAFE norms to make petrol particulate filter mandatory in passenger vehicles,” said Chandrasekharan.
The move to BS7 norms over the next few years aims to reduce emissions of nitrogen oxides and other pollutants in diesel and petrol vehicles, while the Cafe norms will put a cap on the average carbon dioxide emissions of a carmaker’s fleet. TREM V regulations aim to increase the efficiency and reduce emissions of all tractors in the country to control pollution.
Uno Minda’s chief financial officer, Sunil Bohra, said the company is ready for this opportunity, pointing to the proposed implementation of AVAS norms that will require all electric vehicles to come with an audible warning system by October 2027.
“We’ve already been working with our customers with this product, which has been ready for almost three years. And we’re at the stage where we can leverage it very quickly,” Bohra told analysts during the Nov. 7 earnings call.
Not just emission norms
Bosch India managing director and chief technology officer Guruprasad Mudlapur expressed similar sentiments about the government’s incentive that it wants all new two-wheelers to be fitted with ABS to reduce skidding and road accidents.
“From a capacity perspective, we are well prepared to meet the increased demand that is likely to result from regulatory changes,” Mudlapur said in its Nov. 11 earnings call. Currently ABS is mandatory for bikes with an engine capacity of more than 125cc; Such bikes account for one-sixth of the nearly 19 million two-wheelers sold in India in fiscal 2025.
Mudlapur recalled how the implementation of on-board diagnostics phase 2 norms on two-wheelers earlier this year had helped business. The norms required the two-wheeler to have systems that can detect and warn of malfunctions in vehicles that lead to higher emissions.
“Two-wheeler business increased by 81.8% mainly due to higher sales of exhaust gas sensors resulting from implementation of (in-vehicle diagnostics – 2) norms from April 1, 2025,” said Guruprasad Mudlapur, managing director and chief technology officer.
“Two-wheeler business increased by 81.8% mainly due to higher sales of exhaust gas sensors resulting from implementation of OBD-2 norms from April 1, 2025,” Mudlapur said.
Endurance Technologies, another major ABS manufacturer, has already said it will increase capacity fivefold to win new business if the new braking system norms are implemented.
Anurang Jain, Endurance’s chief executive, said in a post-earnings call on Nov. 13 that the company has ordered a production line that could help increase ABS capacity by 1.2 million units and is ready to order a similar line, subject to the government’s decision. Its entire current capacity of 640,000 people will be used by the end of March 2026.
“We have a line of sight to use that line, but we’ll have to figure out what the timeline is based on this new guidance and then order the second 1.2 million line that we received this month based on that guidance,” Jain said.
Push the boundaries of technology
Industry observers say component manufacturers investing in technology will have the advantage of gaining new opportunities from the implementation of new norms.
Natarajan Sankar, General Manager of Boston Consulting Group, stated that automakers that proactively invest in technology will have an advantage in the medium and long term.
“Once the new regulations come into force, short-term demand may face pressure as end consumers/automakers may have to bear additional costs. However, in the medium to long term, demand will continue to grow, given the significant potential of the Indian market. In this environment, auto component manufacturers who invest in the right technologies with a long-term perspective will be in a position to make the most of it,” Sankar said. he said.
While expectations of the new regulations have helped component manufacturers remain bullish on their business prospects, the reaction from market investors has been mixed.
Bosch’s shares rose 15% and Endurance’s shares rose 8% in the last six months, following Nifty Auto’s 19% growth. On the other hand, Uno Minda’s shares increased by 31% in the same period. Tenneco’s shares were 22% higher than the issue price; It was listed on November 19.
