The decision by the Government of India to leapfrog from BS IV to BS VI emission norms has made many automakers in the country decide to do away with diesel variants from their portfolios. Earlier, Maruti Suzuki had announced their decision to drop diesel variants from 1st April 2020, and now Tata Motors has cited similar plans.
Tata Motors currently offers Tiago hatchback and Tigor compact sedan with a 1.05 liter diesel engine. Bolt and Zest, both are powered by a 1.3 liter diesel engine. The company expects a slowdown in demand as updating diesel engines to comply with new BS VI emission standards would make them more expensive.
Around 80 percent of demand in this segment is for petrol variants and hence the added costs involved in upgrading its diesel engine lineup would not be viable. The current price difference of a petrol and diesel car is around Rs.1 lakh on an average which could go up to Rs.2.5 lakhs. This price hike coupled with a lower sentiment for diesel cars makes it uncertain if customers would opt for the higher premium.
For a buyer in this segment, it does not make sense to pay that much extra, especially when price of petrol and diesel is almost the same. This is the reason why the company has said they are not entirely sure of investing money in upgrading Tiago and Tigor’s diesel unit to meet BS6 norms.
At the same time, diesel engine offered on the Nexon and Harrier will be upgraded to BS VI norms. Nexon gets a 1.5 liter unit while Harrier gets 2 liter unit. In the case of Nexon, there is a considerable amount for the diesel variant. Harrier on the other hand, is only offered with a diesel engine option. Tata Motors sources 2.0 liter diesel engine for the Harrier from Fiat.
While the company has plans to pull out its smaller diesel engine offerings, the company is also betting big on electric cars. The Tiago and Tigor electric vehicles are all ready for launch. The company is waiting for better infrastructure and govt norms on EVs to get in place before launching the cars for public. Being bullish on EV, all new Tata cars are built on a platform which are compatible with not only petrol or diesel engine, but also with hybrid and electric.