New Delhi, 19 July 2008: The government is set to launch a system of fuel economy ratings for cars by the year end that enables the buyer to know in advance what mileage to expect from the car that one plans to buy, and how it stacks up with other models in its class.

Initially, the carmakers are expected to voluntarily get their models labelled by the designated agency on a scale of one to five stars, much like the system in place for refrigerators and ACs. By year 2011-12, the fuel efficiency norms will be made compulsory for all passenger vehicles, and any car that fails will not be allowed on the road after the cut-off date.

Besides helping consumers reach a more informed choice while buying a car, the government estimates that the labelling standards would help the country save about 5-15 million tonnes of fuel from the passenger vehicle segment by 2030.

To implement the efficiency norms, cars will be divided into eight categories, by weight, with the best and worst performers being identified for each category. It is found that within the same weight category, say the small car segment, the fuel efficiency of different models varies by as much as 60-70%. So while the best model in the small car segment might give a consumer 20 kmpl, another might be giving a mileage as low as 8-10 kmpl.

By imposing standards, the government wants the poor performers to meet the efficiency levels set by the best in the industry. This will ensure two things. The consumer will get better performing new cars each year and auto manufacturers will not be able to claim that they are being forced to go for costly technology - they will just be expected to use the best technology already in use in India.

With the standards being raised for each segment every couple of years, the bar will keep getting higher and the badly performing models - if they don't improve - will not be allowed to sell from 2011-12.

For the consumer, things will start getting better from the last quarter of 2008 itself. That is when the government starts mileage labelling of cars. Manufacturers for a fixed fee will be able to ask the government to test the car for mileage and then display the "star rating label".

The model that achieves the best fuel economy for its category, and meets objective standards set by the Bureau of Energy Efficiency (BEE) under the power ministry, will be given five stars and the worst performers will be given one star. The label will also display the mileage, as certified by the government, that the particular model gives. It will, more importantly, inform the consumer how that particular model performs in comparison with the best and the worst in its weight category.

Currently, studies conducted by BEE show that none of the existing models are doing good enough to get five stars and three-fourths are falling in the three to four star rating level. Data on all the vehicles that manufacturers get tested by the government would also be put up on a website to help consumers compare figures even before they hit the showrooms.
 
With aggressive advertising and public outreach, the government intends to push all manufacturers to get their models labelled starting 2008-end.