Diesel tractors will become more expensive from January 2023 due to the new BS TREM 4 regulations. The revamped BS TREM 4 emission norms for diesel tractors will be applicable from January 2023 for the models which generate over 50 HP of power. These BS TREM 4 standards will increase the tractor price of 50 HP and above diesel tractor models by a margin of 10 to 15 percent. Moreover, a report from ICRA shows that OEMs will put the burden of rising costs on the shoulders of consumers. In addition, this will result in the production of lower HP tractors which provide higher torque.
Regarding the 10 to 15 percent increase in price, ICRA states that the cost of manufacturing a 50 HP tractor would rise up to Rs. 1 lakh to 1.3 lakh in India. Furthermore, the tractor models in the 50 HP category comprise only 7 to 8 percent of the overall tractor industry. This means that the highly sold tractor models are between the 30 HP to 50 HP category. Apart from this, the tractors from 41 HP to 50 HP will acquire an increased market share of 53 percent.
The technological upgrades to fulfil the revamped emission norms are easily available with OEMs who export BS TREM 4 tractor models. However, the implementation of these norms was delayed due to the pandemic, as it was supposed to be executed in October 2020. Therefore, the transition was postponed several times.
The factors needed for the diesel tractors to pass the BS TREM 4 benchmarks includes air handling systems, diesel oxidation catalysts, exhaust gas recirculation, fuel injection system, diesel particulate filters and selective catalysts reduction systems. In all of these upgrades, the fuel control and air engine system are estimated to constitute 80 percent of the increased costs.
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