Pullout from diesel won’t affect sales, market share: Maruti CFO
- Maruti — which has a 51% share in the passenger vehicles market — sold around 17.5 lakh units in 2018-19, 23% of which were diesel
- Currently, a diesel car (on an average) costs Rs 1-1.5 lakh more than its petrol version
The relationship between Maruti’s Japanese parent Suzuki and compatriot Toyota will also be an enabler in the transition of the company towards more efficient and cleaner vehicles, including hybrids. With BS6 getting implemented from April next year, the company feels that the price of diesel models in the new emission regulation will become “prohibitive”, leading to a substantial shift in demand to petrol-run variants, Seth told TOI.
“Where is the option to not grow volumes? Diesel (vehicle) price gets prohibitive with BS6 and so customers will move over to petrol,” he said, adding that initial estimates suggest that cost of a diesel vehicle may rise by at least Rs 1 lakh, significantly increasing the already-existing premium that they have over petrol cars.
The company — which has a 51% share in the passenger vehicles market — sold around 17.5 lakh units in 2018-19, 23% of which were diesel. “Despite the absence from diesel, we are committed to not only protecting our market share, but growing it even further.”
Currently, a diesel car (on an average) costs Rs 1-1.5 lakh more than its petrol version. However, higher fuel efficiency is one of the key reasons that still gives traction to diesel variants even as there are growing concerns over their impact on the environment. In Delhi-NCR region, the permitted life of diesel vehicles has been cut to 10 years against 15 years reserved for petrol.
Seth said that work is in “full progress” with regards to development of hybrids and other variations on petrol models. “There will be rollouts and launches as we move towards the implementation of the new norms.”
Maruti surprised the auto industry and market analysts when it announced an exit from the small diesel vehicles market on April 25. “From April next year, Maruti will have no diesel cars for sale,” chairman R C Bhargava said when asked about the future of diesel variants — often blamed for rising pollution in cities — in the company’s lineup. “People who love diesel cars may rush to buy them now. It’s their last chance… If I was a fan (of diesel), I would buy only this year.”
Maruti, however, added that the company will continue to monitor the response of the customers to its decision to pull the plug on diesel. A re-think may be possible only if there is still a market for larger diesel vehicles in the BS6 regime.
“The only segment where we may look at having a BS6 compliant diesel engine is the 1500 cc. Nothing below that. If there is demand, we will develop a 1500cc BS6 diesel vehicle within a reasonable period of time,” Bhargava had said.