Maruti Suzuki Says Goodbye To Its Diesel Plan, Focus Is On Vehicles Powered By Alternative Fuels

The automobile manufacturer Maruti Suzuki in India has decided to abandon its diesel plans in favour of accelerating the manufacture of vehicles that run on compressed natural gas and alternative fuels. The move comes as the government push for a speedier transition to greener modes of transportation.

Even though the automakers had discontinued making small diesel-run cars, the company had previously maintained the window open for the diesel powertrain in mid-size vehicles. However, due to a shift in consumer preference toward petrol, the company has decided to phase out diesel. But as per reports, a project to create a 1.5-litre diesel engine for the Indian market has been shelved.

Now, a report by The Economic Times claimed that in the next two to three years, the automakers want to sell more than half a million CNG vehicles in the Indian market, despite rising fuel and diesel prices. It also stated that according to some people familiar with Maruti Suzuki’s plans, CNG would account for a fourth of its entire sales in India by the fiscal year ending March 2024.

The sources also said that close to a third of its entire production, including hybrids and flex-fuel vehicles, will operate on greener fuels, allowing the business to fulfil future Corporate Average Fuel Economy (CAFE) rules.

Maruti Suzuki chairman RC Bhargava said that according to Suzuki's plan, both the government and the corporation are pushing CNG vehicles to their full potential. He also noted that “production of CNG vehicles is increasing rapidly; and this year, demand has been more than our expectation,” while estimating a 350,000-400,000 CNG car production target for the following fiscal year, which begins in April 2022.

In the current fiscal year, the automobile manufacturing company expects to sell 250,000 CNG-powered vehicles. Following the transition to CAFE-2 standards, sales of CNG vehicles are likely to outnumber those of diesel-powered vehicles in the local market, owing to a significant shift in customer demand and a substantial spike in conventional fuel prices.

The CAFE-2 norms aim to make cars more fuel-efficient. While these regulations are set to come into effect in 2022, BS-VI stage II rules are set to come into force beginning April 2023.

However, according to other reports, due to a lack of semiconductors, Maruti Suzuki would have to decrease output for the third month in a row. In October, total production at all of the automaker's plants would be 60 per cent of typical levels, according to the company. This is a marginal improvement above the September output level of 40 per cent.

As reported, production will be reduced by 50 per cent on average in September and October at the automaker.

In a statement, Maruti Suzuki said: “Owing to a supply constraint of electronic components due to the semiconductor shortage situation, the company is expecting an adverse impact on vehicle production in the month of October 2021 in both Haryana and its contract manufacturing company, Suzuki Motor Gujarat (SMG) in Gujarat.”

“Though the situation is quite dynamic, it is currently estimated that the total vehicle production volume across both locations could be around 60 per cent of normal production,” the company added.

It was also reported that according to dealers, Maruti Suzuki's inventory was already running low in September, with 20 to 25 days remaining instead of 35 to 40 days.

The output reduction comes just before the festive season gets underway on 7 October, with the beginning of Navratri. This is often the time of year when automakers build inventories in anticipation of a surge in demand.