Maruti Suzuki India Ltd, India’s biggest car maker, has decided to phase out diesel cars from next year citing higher taxes and huge costs involved in shifting to BS-VI emission norms from March 31, 2020.
“If you are a fan of Maruti Diesel cars, then you have only a year to buy one. From April 2020, we will not be selling diesel cars,” Chairman R C Bhargava said on Thursday.
“Our sense is that the cost of upgrading to BS-VI will be too huge. With price increase, diesel vehicles will be unviable,” he said, adding the auto sector, on the whole, is in a slowdown mode, and election uncertainty has precipitated that.
Maruti, which controls almost half of India’s automobile market, has been witnessing a slowdown in sales of its diesel cars, with the variants making up 23% of its total sales.
The narrowing gap between petrol and diesel prices and higher taxes on diesel cars had already sounded a death knell for the vehicles.
A time-bound shift to advanced emission standards has hastened that. In addition, registration for diesel cars expires in 10 years as compared to petrol ones. Some of Maruti’s models like Vitara Brezza and S-Cross come with a diesel engine option only. Others like Swift, Baleno, Dzire, Ciaz and Ertiga also have petrol versions in addition to diesel.
Industry watchers said other automakers might also follow suit, signalling an end to diesel cars.
“Even in Europe we have seen diesel sales de-growing after the introduction of Euro VI norms. In the Indian market, the impact could be even more accentuated as this is a more price sensitive market,” Bhargava said.
He, however, said that depending on demand, Maruti would continue to offer the recently introduced 1.5-litre diesel engine in select models. But most of the hatchback and small cars will only be petrol, CNG or hybrid models.
“Only 1500 CC diesel vehicle has a future. We will see if we need to produce diesel vehicles depending on market demand,” he said.
The Centre has set March 31, 2020 as the deadline to sell and register BS IV complaint vehicles. Maruti will upgrade all 16 models by the due date.