[avira_tk]

The press conference ended with the management asking customers to buy cars before they are no longer available. Diesel will remain a significant sector of the market, the fuel economy is nearly 100% higher for like to like displacement. Toyota jumped the gun offering the Yaris without diesel, that didn't turn out well, Maruti has been going on about diesel cars being costlier by 2 lakhs more than the petrol version. Its like some universal constant they discovered, my question is how much will it cost for a company that has the technical competence to develop a diesel to meet these norms? Maruti has developed 1 so far, so it's not their strong point.

The government can shift demand by reducing taxes on petrol and removing the 1.2 litre displacement limit on petrol. Most people don't need diesel as their running is low and a sizeable minority can't do without it. A balance that was wrecked by tax policy.

[anandharamanp]

It's all a marketing Gimmick - By making this announcement Maruti is trying to make a panic demand in the market leading to a spike in sales statistics of the already produced smaller diesel vehicles lying in their production plant.

Diesel engine is certainly their cash cow and how will any management afford to take such a risk of losing its substantial share of business to competition - No way!

[FIAT3031]

Originally Posted by rajshenoy

I am confused if I should exchange my diesel Ertiga right away or wait. I am expecting good discounts on new cars towards the end of this year

I would recommend not to wait for year end, coz just like you everyone else is waiting for those year end discounts on Diesel models + BS 4 models.
Not to forget the fish market that erupted at 2 wheeler showrooms when they migrated from BS3 to BS4.

Already the market is at its low and massive discounts are being offered.
If you really have to exchange your vehicle you can do it now, coz one feeling is that the market shall recover post elections.

Good Luck

[w8763]

2020 seems confusing for a majority of car buyers. Whatever be the stage of development for the BS VI diesel engines and associated costs, to buy a diesel hatch, compact sedan or compact SUV now or later is incomprehensible. Marutis 48 % to 52 % market share may be under threat too. Also the newly developed 1.5 diesel will have to prove it's worth for the market leader. Interesting times ahead.

Consider an average Joe buying a Baleno these days. A Baleno petrol delta 1.2, a petrol delta 1.2 dualjet (almost 1 lakh more expensive on road)...a diesel delta 1.3 which may or may not be a wise decision if running is around 1000 kms. There is an AT too and to make things interesting, the Toyota Glanza is lurking around the corner .

[NaXal]

Originally Posted by w8763

Consider an average Joe buying a Baleno these days.

Sorry but average Joe (Indian context) aren't really bothered about those options. Average Indian gets his input from friends & family about the brand to look for. Further into the consideration, looks play a major role for that average Joe to walk up to a showroom. Afterwards, its all about the conversion power of the sales guy.

Just rewind few years back, TATA sales guys sold way more Manza & Vista over FIAT Punto or Linea by claiming about FIAT using TATA engine & technologies for those two model. Mind you, market did listen blindly resulting into a historic blunder for FIAT India.

Same reason for which Maruti was able to sell Alto 800 / Alto K10 / A-Star / Zen Estilo / Wagon R all under same roof & with good numbers. If those car options didn't confuse our average Joe, I am sure Baleno K12 vs DualJet isn't a big deal.

At the end, its the sales guy & the dealership target / profit on a particular model will see the pushing.

Confusing part is for people who fall between the category of a petrol head and average Joe. Infact most confused buyers are here in Team-Bhp itself. Whenever we went for a car purchase, its has always been a world war between heart & brain. Thar or hatchback, Punto or i20, Abarth or Figo 1.5D, same budget sedan vs suv, we are always confused & fighting a civil war between love & logic.

Thanks.

[Arvi95]

There's no doubt that the new BS6 compliant diesel engines from all manufacturers will come with a significant price hike, just because of all the additional tech needed to conform to the norms. I feel the presence of diesels in the small car segment is surely on it's way out, and for good. It makes sense for high mileage applications only, but for the average city dweller looking for a compact car with a monthly running less than 1000km, it definitely makes sense to invest in a petrol car. Maruti's decision is justified as the price differential in the compact car segment is surely going to make huge dent in diesel car sales.

As a petrol head, one can only hope that OEMs bring out high tech Petrol engines which are fun to drive and also easy on the pocket.

[Yash98]

When I read the news for the first time there were a few key things that stood out:

1. Maruti has spent considerable resources on developing the 1.5L engine. It seems highly unlikely that they were expecting to recover the costs within 2 years. This is what leads me to believe there is a doomsday scenario being created here.

2. In another newspaper, Mr. Bhargava mentioned that keeping the diesel would only make sense if there was a significant difference in petrol and diesel prices. Given that almost all commercial vehicles run on diesel, the government will be forced to keep prices low for allowing the transport sector to operate. Hence, diesel will make sense at least for the next 5 years till EV technologies become more advanced.

3. There is already a 1 lakh difference in petrol and diesel car prices (eg: Maruti Ertiga). So will an incremental 20k-30k really cause a paradigm shift in buying patterns? I do not think so.

4. Most tourist taxi drivers will continue to prefer diesel due to its higher mileage and longer engine life. Will Maruti want to lose out on this segment?

5. Even in a developed nation like the US, diesel fuel and diesel cars are still available as an option, though not preferred by most. How can diesel demand suddenly be obsolete in a market like India where it has enjoyed continued success?

6. If other manufacturers like Honda can continue to provide BS-6 diesels, Maruti with the scale and network of its operations should easily be able to do the same at a lower price point.

If a 20 year old can understand this, I do not see how none of the media outlets gave it some more thought before directly publishing such news. .

Thanks,
Yash

[SamitMukherjee]

When I first read the news, I was both confused and shocked at the same time. Because, till last year, Maruti was fully dependent on Fiat sourced 1.3L diesels to power its cars. To come out of this dependency, they had engaged huge resources to develop their own diesel engines. Now if they wish to stop producing diesel cars within a year, I don't think they could have reached their Break-Even point.
Moreover, diesel used to contribute a healthy percentage to their total car sales, which I don't think they want to lose.
Also, just by limiting diesel engines options to high end cars will erode some percentage of their market share as cars like swift, dezire are favourite among cab operators.

[itsashishsharma]

Originally Posted by Yash98

3. There is already a 1 lakh difference in petrol and diesel car prices (eg: Maruti Ertiga). So will an incremental 20k-30k really cause a paradigm shift in buying patterns? I do not think so.

The BS6 norms will make diesel engines pricier by about 1 lakh ₹ and not just 20-30k.

[varghese_p_g]

The possibility of a ban in the future for older diesel vehicles is also to be kept in mind before jumping in on the current discounts

[jithin23]

Maruti knows that their hatchback customers prefer petrol engines rather than diesels. They can't make a small diesel engine (i.e. <1.5L engine) as it will make no financial sense for the manufacturer nor for car buyers. In my perspective, if one is going for a diesel engine, the minimum must be a 1.5L engine.

[R2D2]

And this article on the Economic Times site today:

Passenger car sales stare at a downhill journey

[GTO]

Originally Posted by Yash98

There is already a 1 lakh difference in petrol and diesel car prices (eg: Maruti Ertiga). So will an incremental 20k-30k really cause a paradigm shift in buying patterns? I do not think so.

Great points, all . Just to add to this, some cars (e.g. Verna) already charge 1.5 - 1.7 lakhs extra for the diesel variant and seem to be getting away with it just fine.

Originally Posted by itsashishsharma

The BS6 norms will make diesel engines pricier by about 1 lakh ₹ and not just 20-30k.

All that talk is rubbish. It's typical of manufacturers to whine & cry whenever new rules are announced (good thing that no one in Delhi listens to them).

I recently read an exceptional book on the VW scandal and it mentioned that it would've cost VW just $300 - 400 to adhere to California's strict emission norms. Even if you leave aside America's higher volumes, I think it'll cost Indian manufacturers Rs 40,000 or less (once vendors start manufacturing the parts in volumes). Or maybe, the cost could be just as much as in the USA, considering it's an accepted standard worldwide.

[mayjay]

While a lot of us believe that Maruti is only positioning here, let's also be cognizant that such companies have various reasons, to be relatively predictable. Among them is their responsibility of accurate disclosure as listed companies, as well as the simple fact that customers also expect it while making purchase decisions.

If the company is making such a statement, there ought to be a good level of considered thought behind it. After all, any customer reading this would think twice about buying a Diesel which is going out of production soon.
This is likely to directly impact sales.

My personal view is that Maruti had been seeing the writing on the wall for some time. Diesel demand has been drastically down from the heady days of '12-'15, when Diesel comprised 60-70% of sales. With the low demand, and the impending regulation change which would make cars more expensive by 1-2 lakhs, any investment to upgrade just didn't make commercial sense. In its place they are already collaborating with Toyota for hybrid / electric technology. As far as customers are concerned, that technology would be just fine, as long as running costs are equal or less than Diesel.

[GeeTee TSI]

I cannot help it, but the impression I get is one of total lack innovation to benefit the customer or the environment.

The dominant player has been content churning out diesels with little upgradation and advancement until the (usually lethargic) administration gave a deadline to clean up the emissions. Instead of embracing the opportunity to improve the technology (read pull up ones socks), Maruti seems to drop the customer offering (diesel) like a hot potato as though the BS6 is some unattainable dream!

The Indian customer should not be made to pick their outdated 1.3 DDiS (now or never) as though it is some special edition going out of production. We should be given some (long overdue) contemporary technology if not ahead of its time.