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Maruti to expand range of CNG cars amid declining sales

Maruti Suzuki plans to make its entire small car portfolio available in compressed natural gas (CNG) variants. It is looking at the CNG option to fill the space currently occupied by diesel cars, which it intends to stop selling by April 2020.

Maruti to expand range of CNG cars amid declining sales

Maruti Suzuki India cuts its production by 34 per cent at 111,370 units in August

Having announced plans to stop selling diesel cars from April 2020, when the BS-VI emission laws come into effect, India's largest automaker Maruti Suzuki is looking at compressed natural gas (CNG) to fill in the soon-to-be-vacated space. At the time of this announcement in April, around 23 per cent of all the units sold by the company in the domestic market were diesel cars. Maruti Suzuki is now looking to make its entire small car portfolio available in CNG variants.

According to Maruti Suzuki India (MIS) Senior Executive Director (Engineering) C.V. Raman, the company believes that CNG is a "very good option" for a small car. "It is an alternative to oil consumption. We have the widest range of CNG cars for our customers. We are keen to promote green fuels," he told PTI recently. Presently, MSI offers half of the 16 models in its portfolio in CNG variants, namely Alto, AltoK10, Celerio, WagonR, Dzire, Ertiga and Eeco in CNG variants along with light commercial vehicle, Super Carry. Cumulatively, MSI has sold over 5 lakh CNG cars so far, which is nearly 17 per cent of the estimated 30 lakh CNG vehicles currently plying on Indian roads.

The focus on CNG will also help the company to reduce dependence on imported oil and cut down on vehicular pollution. "There is an acceptance from the government that CNG is a cleaner fuel, and it is being accepted for transportation. They are setting up 10,000 CNG distribution outlets," Maruti Suzuki Chairman RC Bhargava told The Economic Times.

In a bid to push adoption of CNG vehicles in the personal mobility space, the petroleum and natural gas ministry last year announced plans to set up 10,000 CNG distribution outlets in 10 years. It is estimated that the country will save nearly Rs 2 lakh crore in oil imports if personal car users switched to CNG vehicles.

According to Bhargava, factory-made CNG vehicles cost substantially more than those retrofitted with kits - usually with imported parts - because of taxes and manufacturing costs but are comparatively safer. "To promote Make in India, the government must encourage factory-fitted CNG vehicles," he said, adding that CNG kits should be made in India.

In line with its plans to replace diesel with CNG, the company increased production of CNG-powered vehicles by 40 per cent last fiscal and is in the process of raising it by another 50 per cent this year. Maruti Suzuki sold 31,000 CNG vehicles in the first four months of the current fiscal year. CNG distribution outlets currently are mostly located in Delhi, Mumbai and Gujarat, and in these states CNG variants reportedly account for about 30 per cent of the sales of each model.

The company is going through turbulent times at present. On Monday MIS said in a regulatory filing that it has cut its production by 34 per cent year-on-year (y-o-y) in August, the seventh consecutive month in which it trimmed output. It informed the bourses that the company produced a total of 1,11,370 units in August 2019 as compared to 168,725 units produced in the same month last year.

The mini segment, which comprises cars like Alto and old WagonR, saw the steepest decline of 62.93 per cent with the company producing just 13,814 units against 37,268 units rolled out in the year-ago period. The total production of mini and compact segment cars in its portfolio dropped by 34.1 per cent to 80,909 units, it added.

With PTI inputs

Also read: Maruti Suzuki chairman RC Bhargava pitches for tax relief for hybrid, CNG cars

Also read: Maruti Suzuki, Tata Motors, Mahindra stocks fall on double-digit decline in August auto sales

Also read: Slowdown Blues: Car sales crash 29% in August; all eyes on Sep 20 GST meet

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