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Maruti sees no logic in launching small diesel car – Focus more on CNG

Maruti Suzuki states that the current economics do not support diesel models in the affordable category

As the Indian automotive market shifted to BS6 emission norms, certain automakers such as Maruti Suzuki, Renault-Nissan and Skoda Auto Volkswagen India have chosen a petrol-only business strategy. BS6 norms are much more stringent than the phased-out BS4 standards and as a result, OEMs found it difficult to cut down emissions in existing diesel engines.

Since the price gap between petrol and diesel fuel is narrowing almost on a weekly basis, buyers have started showing more interest in petrol vehicles. Yet the demand for diesel models has not dropped drastically in the entire scenario. A considerable number of buyers prefer diesel cars for their low-revving low-torque nature in addition to higher fuel economy.

In the BS6 era, Maruti Suzuki is fully concentrating on ‘cleaner’ forms of powertrains such as petrol, petrol mild-hybrid and CNGs. The Indian automaker plans to expand its CNG portfolio (primarily aimed at cab services and other fleet operations). It currently commands over 1,900 CNG outlets across 195 cities in the country.

No Maruti Suzuki Diesels

Maruti Suzuki does not see potential in diesel models in the years to come, especially in the affordable category. According to Shashank Srivastava, Executive Director (Sales & Marketing) at Maruti Suzuki India Limited (MSIL), there is “absolutely no logic” in introducing a new BS6 diesel engine in the entry-level.

Data shows that only about five per cent hatchbacks sell in diesel formats while figures have taken a major slump in sedan and SUV/crossover categories. However, there is a slight possibility of bigger diesel engines (1500-2000cc) in the future if demand arises. Maruti Suzuki also believes that the market for diesel SUVs and sedans would eventually disappear. The company recently hit a new milestone by selling two million units of CNG and petrol mild-hybrids (combined) under its ‘Mission Green Million’ initiative. An all-electric WagonR version is in the works too.

Increasing Fuel-price Gap

Srivastava further added that the ex-showroom price gap between an equivalent petrol and diesel example has grown from Rs 70,000-90,000 to Rs 1.5-2.5 lakh. In other words, the healthier economics of choosing diesel models has virtually disappeared now. Market share of the same has come down from 60 per cent to under 20 per cent in just a few years’ time as well.

Maruti Suzuki is witnessing substantially lower sales figures than before due to the ongoing COVID-19 situation. Furthermore, products that were previously good sellers in BS4 diesel formats are seeing less interest in BS6 petrol avatar. There are no solid plans to bring the much-awaited Jimny subcompact offroader anytime soon.

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