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Maruti Suzuki has just announced that the company will stop building diesel engine cars in Indian market from the April of next year. This is a major announcement by the largest auto maker of India as the diesel still remains a popular choice among car buyers, especially the cab market.
In a press conference, the chairman of Maruti Suzuki India Limited RC Bhargava made the following statement,
From April 1, 2020 we will not be selling diesel cars. We have taken this decision so that in 2022 we are able to meet the Corporate Average Fuel Efficiency norms and higher share of CNG vehicles will help us comply with the norms. I hope the union government’s policies will help grow the market for CNG vehicles.
Diesel powered cars still constitute more than 25 percent of Maruti Suzuki’s sales in India. The move to stop the diesel variants in the market could have a major impact on the sales of the maker as company still offers diesel variants of a majority of their cars in the market, these include Swift, Baleno, Ciaz, Ertiga, Vitara Brezza and the S-Cross. Notably cars smaller than the Swift do not come with the option of a diesel engine. This move comes close at the heels of the upcoming stricter BS-VI emission norms that are set to be enforced in the Indian market from April 2020. A lot of makers are gearing up to update their models in India in accordance to the upcoming rules and Maruti Suzuki is also one among them.
As many readers are aware the largest maker of India uses the Fiat sourced 1.3-litre Multijet diesel engine in the majority of the diesel cars it offers in the country. However, just last month the maker brought out the 1.5-litre DDiS diesel engine and launched it with the Ciaz C-segment sedan, This engine has been developed by the company in-house and the newly developed engine can also be upgraded to comply with BS-VI emission norms. This is not the case with the Fiat-sourced 1.3-litre Multijet diesel engine. As the maker has already spent a lot of money while developing the new 1.5 liter DDiS diesel engine, the decision to upgrade it to BS-VI emission norms will be taken after assessing the market demand as the upgrade would mean spending more money on the engine.
The greater investment in the new diesel engine would mean the prices of the model with the engine would be pushed even higher. Considering that the BS-VI compliant diesel engines are already supposed to come with expensive technology, the prices of the cars with the new BS-VI compliant diesel engines would be abnormally high. The customers who purchase smaller cars will bear the maximum brunt of the price as the difference between the cost of BS-VI compliant diesel and petrol engine small cars will be markedly high.
The logical route that the brand will take is the path of hybrid engines as the partnership with Toyota will also help the brand in the same. While the smaller cars with petrol hybrid engines are going to be expensive initially, the cost will be recovered in the long term by the customers as the mileage of the hybrid petrol cars is higher, this means that the customer has some respite in the long-term. With the Suzuki-Toyota partnership involving the clause of latter helping the former in development of hybrid powertrains, the future for Maruti could hold hybrid petrol engines.