Maruti Suzuki Shifts Focus From Diesel Cars

• Reports suggest Maruti Suzuki is closing its dedicated engine manufacturing plant in Gurgaon.
• Unlike what many have interpreted this news to be, Maruti is not going to discontinue diesel cars from its lineup anytime soon.
• Maruti is shifting focus to petrol and alternative-fueled cars, including CNG, hybrid and electric powertrains.
• Maruti’s in-house developed 1.5-litre diesel engine will be used in its current lineup and future products once BSVI norms kick-in in 2020.

Let’s gets one fact straight, Maruti Suzuki is NOT discontinuing the production of diesel-powered cars anytime soon. Reports of Maruti Suzuki planning to shut down its dedicated engine manufacturing facility in Gurgaon have been accompanied by speculation that the company is planning to stop making diesel cars altogether, but that is not true.

One, Maruti is shifting focus to making alternative-fuel powered cars in the wake of stricter BSVI emission norms that are set to take effect starting April 2020. Diesel engines will be more expensive to manufacture to meet these norms, and modifying the Fiat-sourced 1.3-litre Multijet (DDiS 190/200) engine to the new norms doesn’t make financial sense. Maruti has an alternative anyway - the in-house developed 1.5-litre diesel engine is expected to be offered on most of the diesel range by 2020. Hence, claims of the company stopping diesel cars altogether are unfounded.

Two, Maruti’s closure of the engine plant could be related to its plan to dismantle its facilities at Manesar and shift them to the new, yet-to-be-finalised location within Haryana. Along with the adoption of the new in-house diesel engine, shifting customer priorities also lower the importance of the dedicated engine manufacturing facility - making it easy for Maruti to integrate the engine manufacturing operations to its plants in Gujarat and Manesar (and wherever the facility shifts to in Haryana).

Three, diesel is still the preferred fuel for commercial purposes. And Maruti’s Super Carry uses the 2-cylinder, 800cc motor which debuted on the Maruti Suzuki Celerio and is built in-house. Technically, Maruti will continue to make diesel-powered vehicles even if they are not used to power their passenger cars.

Four, Maruti’s dominance in the car market is not going to diminish even if it did decide to stop manufacturing diesel-powered cars. While hybrid (not mild hybrid) and all-electric powertrains will not be feasible in the short term, the company is looking at alternatives like CNG and good old petrol to power its cars in the interim. CNG variants will be added to newly launched cars, including the Ertiga MPV, while the two new cars that are set for launch in 2020 will be fitted with the yet-to-be-revealed BSVI-compliant petrol engines.

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Maruti’s tie-up with Toyota for badge-engineered cars could also give it access to full-hybrid technology with a badge-engineered Corolla expected to roll out sometime in 2020. Parent company Suzuki already makes hybrid versions of most of its small car lineup, including the Swift, in the Japanese domestic market (JDM). Maruti needs to make it more cost-effective for India for it to bring it here. Maruti is also testing all-electric powertrains in India. Currently, a test group of 50 JDM all-electric Wagon Rs is being driven on roads all around India.

Maruti Suzuki steers away from diesel engine cars - courtesy Livemint