Diesel Runs Out Of Favour

India’s jump to a more advanced fuel norm means phase-out of small diesel cars. Maruti leads way.

- Lola Nayar

Last month, Maruti Suzuki, India’s largest carmaker, dropped a bombshell in the market. It announced that it will stop making small diesel cars from next year. Immediately, it puts a big question mark on the future of the company’s bestsellers—diesel-only cars like the Brezza and the s-Cross.

The company’s announcement of not upgrading its small diesel cars to BS6 norms—which means a complete drop out of the segment from April 2020— came as a surprise to the automobile industry. At its peak in 2016-17, diesel cars accounted for 31 per cent of Maruti Suzuki’s sales, which have since then dipped to 26 per cent. Maruti Suzuki registered its highest ever sales of 18.62 lakh units in 2018-19 as against 17.79 lakh units the previous year.

Announcing the decision to not upgrade the company’s small diesel car range to BS6 norms, R.C. Bhargava, chairman, Maruti Suzuki India Limited, had explained that “upgrading small diesel engines to BS6 emission regulations may result in substantial increase in the cost of the cars, making them unviable for customers”. Maruti Suzuki estimates that the cost difference between a BS6 petrol variant and BS6 diesel variant will widen further to around Rs 2.5 lakh from the present Rs 1-1.5 lakh.

“With such a large gap in prices, customers are likely to favour petrol variants over a BS6 diesel vehicle. This will be especially true for small diesel engine cars owing to their higher sensitivity towards prices,” a spokesperson for Maruti Suzuki told Outlook.