Marathi Suzuki has finally decided to pull the plug on its diesel plans and accelerate production of vehicles powered by compressed natural gas (CNG) and alternative fuels, in line with the government stand encouraging faster transition to cleaner forms of mobility.
The maker of the Breeze SUV had earlier kept the door open for the diesel powertrain for mid-size vehicles, though it had stopped producing small diesel - run cars. But the shift in consumer preference towards petrol has triggered the company to finally bid adieu to diesel.
A project to develop a 1.5 - liter diesel engine for the Indian market has also been cancelled.
Marathi Suzuki hopes to sell more than half a million CNG vehicles in the local market in the next 2-3 years, amid a sharp rise in petrol and diesel prices. CNG is expected to account for a fourth of its total sales in India by the next year ending March 2024, said people in the know of the company's plans. Including hybrids and flex fuel, close to a third of its total production will run on greener fuels, helping the company meet future Corporate Average Fuel Economy regulations.
"The government as well as the company, in accordance with Suzuki's plan, is going ahead with pushing CNG vehicles to the maximum extent", Marathi Suzuki chairman RC had said recently. "Production of CNG vehicles is increasing rapidly day by day. And this year, demand has been more than our expectation, 'he had said, while projecting the production target for next year starting April 2022 to be 350,000 - 400,000 CNG vehicles.
The automaker is looking at selling 250,000 units of CNG-powered vehicles in the ongoing fiscal. Given a marked shift in consumer preference amid a sharp rise in conventional fuel prices, sales of CNG vehicles are expected to overtake those of diesel - driven ones in the local market.
Parent Suzuki believes that the economics for diesel remains poor in India compared with petrol and hence diesel continues to lose share, according to a note released by Credit Suisse on August 24,based on a call with the Japanese automaker. On an investor call, the Suzuki management had started that there was a large order backlog for CNG vehicles, indicating that CNG in Marathi Suzuki's portfolio would increase.
Currently, the share of CNG in Marathi Suzuki's total sales stand at 16%. For models which come with a CNG option, this is higher at 32%. In markets such as Delhi, Mumbai and Pune, where the fuel is readily available in the model they want to purchase, according to company data.
"Eventually Suzuki sees strong hybrids and then EVs coming in as well, and hence believes Suzuki and Marathi should concentrate their R&D efforts on CNG and electrification rather than diesel.
Given the potential in the segment, Tata Motors too is set to enter the market with two CNG - powered vehicles later this year. At present, only Marathi Suzuki and Hyundai Motor India offers cars with factory - fitted CNG kits to consumers.
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