Even as SIAM (Society of Indian Automobile Manufacturers) protests, the diesel ban in India which has now been extended to Kerala is set to help certain automakers like Maruti Suzuki. Delhi and Kerala feature in top 5 auto markets in India and account for 14% of vehicle sales.
As of now, roughly 5-6 out of 10 cars sold in India are petrol powered. Not long ago, this figure was at 4. The ban, combined with a significant price difference between petrol and diesel models (nearly INR 1 lakh on an average), is estimated to increase the petrol car proportion to 7 out of 10 cars in the near future.
In the near future, the proportion of petrol cars in the new car market is estimated to increase to 70%.
How will Maruti benefit from this paradigm shift? The automaker has 60% market share when it comes to petrol car market whereas, in diesel segment, its market share stands at a just 28%. If the National Green Tribunal (NGT) continues to ban decade old diesel cars and prevent registration of new diesel vehicles with more than 2.0-litre engine displacement, the combined effect is expected to help Maruti consolidate its market leadership.
The overall effect of diesel ban in India would help Maruti consolidate its leadership.
The company which has grown bigger than its Japanese parent is aiming to sell 2 million units by 2020. Given that it primarily focuses on petrol powered models, things appear to be playing out as per the Maruti Suzuki’s expectations.