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    Maruti Suzuki may retain diesel cars

    Synopsis

    Will give 5-year extended warranty on small diesel cars to bring confidence to the market.

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    Maruti Suzuki will be giving five year extended warranty on small diesel cars to bring confidence in the market.
    NEW DELHI: Maruti Suzuki India (MSIL) may not completely phase out diesel passenger vehicles post implementation of stricter Bharat Stage VI emission norms, top officials informed ETAuto.

    The country’s largest carmaker, which gets over 20% of total sales from diesel cars, earlier announced plans to phase out diesel cars after BS-VI implementation in April 2020 due to cost implementation.

    Maruti Suzuki will be giving five year extended warranty on small diesel cars to bring confidence in the market. The company has also announced that Brezza and S-Cross will have a BS-VI petrol vehicle very shortly, by the end of this year.

    “What we had announced was that for smaller diesels, we will move out of the same. Because to convert a BS-IV vehicle to BS-VI vehicle in diesel is expensive. So already the difference between a diesel car and petrol car about a lakh and ten or twenty thousand and you add another big cost to it then the gap becomes so large that the consumer in smaller car at least which is more price sensitive, they’ll probably reject it,” said Shashank Srivastava, executive director, Maruti Suzuki India. However, in the larger diesels, the company still have options open.

    “We are going to study the reaction of consumer because those vehicles will also come at a higher cost. So we have to study the consumer reaction and then we will decide what is to be done regarding BS-VI for larger diesels,” he said.

    CV Raman, senior executive engineering, Maruti Suzuki India, in an exclusive interview, also said the company will look at 1.5 litre diesel engine in future. Currently 1.5 L diesel engine powers company’s Ciza & Ertiga models.

    “We have done about 30% of that work (completing transition), which constitutes 50% of the volume. So now we will start the balance work in the next couple of months, you will see in the next three months all the other vehicles also become BS-VI,” Raman said.

    “Typically our understanding is that for BS-IV petrol to diesel, price point difference is Rs 1 lakh. It may go up in a small car to Rs 1.75 lakh or Rs 2 lakh in case of BS-VI,” he said.

    Changing market dynamics
    The carmaker sees a major change in the market dynamics with BS-VI implementation as it will tilt more towards bigger cars and small cars may see a decline. “In the market, there is going to be definitely a shift. Today you see petrol to diesel, the price difference is maybe Rs 8-Rs 9 in the market. Even though the fuel efficiency is higher in a diesel engine by about 20-25%. The acquisition cost being higher, so small car segment will see a decline in the diesel,” said Raman.

    “We feel all small cars should be converted to CNG going forward.” Diesel penetration among passenger vehicles is likely to come down to 15-20% after BS-VI implementation.
    (Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times.)

    11 Comments on this Story

    Pavan C. Joshi375 days ago
    Magical time for Marti and Indian auto industry and as a Systems Engg. consultant, I advise the sector to unlock their vast real estate of approx. $ 50 billion and return investors mega profits. At the same time switch to electrics.
    E vehicle by Nature and others will reach ignite their bottom lines re. less parts.
    India''s small car makers will recover faster, along with exports, because they have mastered the fine art of profits from the least profitable bottom of the pyramid small car market in a cut throat and price wary desi market.
    Electric small auto world is Global and the greatest leveler for further Globalisation of the new age Indian auto play.
    Care Diem Indian auto!
    Critcs Knowledge376 days ago
    Maruti was a govt company and their thoughts are same even today..they lack innovation and dont want to cut down own profits ...they will cut down man power or diesel engine but wont reduce profit margin and will keep making tin cars and will blame govt body..
    DG377 days ago
    Self inflicted wound. Maurti thought they will be very clever and drive up demand by saying the diesels will not be available after April2020, but now. Buyers were smarter. Buyers thought if it is going to get discontinued in 6 months, why am I buying an obsolete product now!
    Maruti has always tried to squeeze the buyer by selling unsafe cars in the name of fuel economy, because they did not want to upgrade their engines to be more efficient. Now BS6 and enhanced safety norms are forcing them to give up their very successful con game. So, Maruti needs to get rid of their old leadership. They are trying to drive the company into the future by looking into the rear view mirror! Maruti will crash under such leadership.
    The Economic Times