Maruti Suzuki hints it may never launch diesel vehicles again - IAB Report

Towards the end of BS4 era, Maruti Suzuki discontinued all its diesel vehicles. While the company is looking at upgrading one of its diesel engines to BS6, the probability of that happening is low, as per a recent development.

During a conference call with analysts this month, Ajay Seth, Sr. Executive Director & CFO, Maruti Suzuki, indicated that Maruti Suzuki may never launch diesel vehicles again, owing to dropping demand and the high cost of upgrading diesel engines to make them compliant with the BS-VI emission norms.

“The contribution of sales from petrol vehicles stands at 93% in quarter 4 2019/’20,” Seth said. The final quarter of FY2020 was when Maruti Suzuki was dispatching its last remaining diesel vehicle stock. The company has stopped manufacturing diesel vehicles as none of their engines could be upgraded to BS-VI because of the high costs involved.

The shift towards petrol vehicles is more evident now, with share of diesel vehicles for the industry falling from 20% in quarter 4 2019/'20 -- falling below 20% in quarter 4 in 2019/’20.

Until now, it was expected that Maruti Suzuki may at least bring back diesel engine option in vehicles longer than 4,000 mm i.e. models like the Ertiga and the rumoured new flagship SUV. However, that also seems unlikely now. Shashank Srivastava, Head of Marketing & Sales, Maruti Suzuki, has admitted that the demand for diesel engines in the case of 4,000 mm+, premium B-SUVs and C-SUVs is still there. At the same time, he has also indicated that petrol engines are becoming more popular even among those bigger SUVs. Below is what he has said about this matter:

It's only in the SUV category that there is -- and that too in the mid-SUV and upper category of SUV that there is a significant percentage of diesel. But the initial demand for the new launches of the competition for -- in the SUV category also indicates -- whether it's Seltos or whether it is Hector or even Creta, it does indicate that there is a lot of traction for gasoline even in those segments.

Concluding his statement of analysis about the demand for diesel engines in passenger vehicles, Srivastava said that the company expects “that the diesel percentage in the industry will further come down.”

Reports are rife that Maruti Suzuki is testing a BS-VI version of the E15A 1.5-litre diesel engine in the Ertiga. Even if that is true, the decision to commercialise that BS-VI diesel engine could change at any given point depending on the market demand. The company used to offer the BS4 version of the E15A 1.5-litre diesel engine in the Ertiga and Ciaz. Our safe bet is on mild-hybrid and full-hybrid systems serving as a replacement for diesel engines in the company’s bigger models in the future.

Also See: BS-VI Maruti Ertiga diesel (BS-VI Maruti Tour M diesel) testing continues, spied again

Stay tuned to IndianAutosBlog.com for more Maruti Suzuki updates and other four-wheeler news.