After Maruti, Now Tata Motors To Stop Small Diesel Car Production In India

Tata Motors¡¯ is set to phase out small diesel cars from its portfolio in India and becomes the second auto major to do so after Maruti Suzuki. The move comes as Tata Motors expects that the demand for small diesel cars will phase out once the upcoming BS-VI emission norms are rolled out in the country.

BS-VI emission norms will come into effect starting April 1, 2020, post which, the prices of diesel cars is set to see a rise. Due to this, many car makers believe that the small segment diesel cars will be out of reach for budget buyers in India.

As of now, Tata Motors sells its entry-level hatchback Tiago that comes with a 1-litre diesel engine in that segment, along with the 1.05-litre engine Tigor. Older models on offer include the likes of Bolt and Zest, both of which are powered by a 1.3-litre diesel engine.

Tata Bolt (Image: Tata Motors)

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Naturally, if the consumers will not be willing to buy such high cost entry-level diesel offerings, it makes no sense for the companies to produce them at the equivalent rise in cost and hence, the stop in their production. Tata Motors president passenger vehicles business unit, Mayank Pareek commented on the move "We feel that low demand for entry- and mid-size diesel models will not justify the high costs involved in developing a new small capacity engine."

He further added that around 80% of the demand in the small segment is for petrol variants, and thus, the additional required investment for the diesel ones does not seem viable.

While Tata Motors will be shutting the production of small diesel engine cars, the bigger ones will be seeing an overhaul to suit the upcoming BS-VI emission norms. The list for these includes the SUV Nexon and the SUV Harrier, which come with bigger 1.5-litre and 2-litre powertrains respectively. The 2-litre diesel engine for the Harrier is sourced from Fiat.

Tata Tiago (Image: Tata Motors)

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It is easy to predict the soon to decline demand in the small diesel cars. Pareek puts it into words, "Given that these high costs will ultimately have to be passed on to the end customer, the sale of diesel vehicles will logically see a decline in the industry".

Maruti Suzuki India (MSI) was the first to denounce such entry-level diesel cars from its portfolio, announcing the move earlier this month. In fact MSI went a step ahead and announced the discontinuation of all the diesel vehicles from its portfolio starting April 1, 2020.

Some others have followed a different approach, with no plans to discontinue the production of diesel engines. Ford, for instance, said that it will be ready with the BS-VI compliant engines for its diesel cars like EcoSport and Endeavour before the April 1, 2020.

The Bharat Stage VI emission norms will make sure to control the level of air pollutants released from vehicles running on the road. Currently, the vehicles follow the BS-IV emission standards.