Airbag Market in India Poised to Surge

Only about one in three passenger vehicles sold in India today comes equipped with airbags. But government initiatives could push that ratio to nearly 100% by fiscal 2020 and create an annual market worth as much as 23 billion rupees ($344 million).

So says ICRA Ltd., India’s independent investment information and credit rating agency. The organization notes the sudden growth will present an opportunity for domestic manufacturers to expand airbag production ventures.

India’s upcoming Bharat New Vehicle Safety Assessment Program won’t mandate airbags. But it will begin to bestow safety ratings that favor vehicles equipped with such safety features. The star-rating system will begin for all-new models in October 2017 and spread to all vehicles in production by October 2019.

India’s airbag market currently is served by such well-established foreign players as Autoliv, Takata, Toyoda Gosei and ZF TRW. Some have already established local partnerships to increase domestic assembly capacity.

Rane TRW, for one is a venture between ZF TRW and India’s Rane Holdings Ltd., that has begun assembling airbag systems at a $2.5 million facility in Chennai. The $2.5 million factory has capacity to make 500,000 airbags per year. Other airbag ventures are expanding local production.

But the proportion of local content for Indian airbags is likely to remain as low as 20% for several years, ICRA says. It notes that India currently lacks the technology and production base to make such key components as inflators and sensors.