Maruti Suzuki To Push For More CNG Cars As Small Diesel Engines Make No Economic Sense Anymore

Maruti Suzuki has long hinted at its desire to ditch diesel engine makes from its lineup in the Indian market. Now that it has, starting the ongoing financial year, a top company executive has now confirmed the move for the long run. Interestingly enough, the goodbye for diesel engines will also mark a renewed push towards more Maruti Suzuki CNG cars.

The market leader in terms of volume is not able to find economic viability for small diesel cars in India anymore. This is because of the gradual shift in the market towards petrol models, as well as the rising prices of both the fuels.

In a recent interaction with PTI, MSI Executive Director Sales and Marketing - Shashank Srivastava said ¡°There is absolutely no logic in developing a small diesel engine. It is less than 5 per cent in hatchback segment and has reduced considerably in sedans and entry-level SUV segment as now economics does not support it.¡±

He added, ¡°The economics of running a vehicle on diesel, which was so favourable earlier, has now disappeared. Therefore there is no economic logic for buying a diesel car and that is reflected in the percentage share of diesel cars in the market. From 60 percent a few years back it has come down to 20 percent¡± he noted.

Not all out

(Representative Image: Reuters)

The company, however, has reportedly had the realisation earlier of losing out on a major chunk of the market if it stops producing diesel engines altogether. Despite the hold on their production, the company is still keeping an eye on the market for its future decisions.

¡°Those customers who do not care for economics for running the car they may still be buying the diesel cars and for that the company has said it is watching the market very closely,¡± Srivastava said. ¡°If we find there are enough people in that category then we can always look at developing a bigger BS-VI diesel engine,¡± he further added.

This means that Maruti Suzuki might be back with BS-VI diesel engines but only for its bigger offerings in the form of sedans and SUVs. All this, however, will only be focused on once the market stabilises after the Covid-19 impact.

CNG push

Maruti Suzuki dealership (Representative Image: BCCL)

As diesel is moved out of the picture, the company¡¯s next big decision is to build on its CNG portfolio in the country. Srivastava said the company aims to sell around 1.4 to 1.5 lakh CNG units this fiscal year, up from 1.07 lakh units in the last one.

The target is to sell ten lakh units of such green cars over the next few years.

All this is thanks to the advantages that CNG offers to the customers. Both owning and operating cost of CNG cars is less than that of diesel ones.

Srivastava highlights these positives for CNG¡¯s growth in the past few years. ¡°CNG segment grew last fiscal by 7 percent while the overall passenger vehicle industry declined by 18 per cent,¡± he noted.

As of now, Maruti Suzuki sells eight CNG models in its portfolio. ¡°We plan to further enhance the CNG portfolio in the coming days,¡± Srivastava said.

The move will be in line with the government¡¯s efforts to increase CNG stations across the country. As per Srivastava, the government has already announced to double the number of existing CNG outlets in next one year.

(With inputs from PTI)