[wheelguy]

The company fears missing out on a sizeable market share if M&M, Hyundai stay put.

Mumbai: Maruti Suzuki is reconsidering the plan to ditch diesel vehicles from its portfolio, after its key rivals decided to continue in the segment, people in the know said.

The nation’s top carmaker had cited non-viability of developing a small diesel engine complying with upcoming emission norms for exiting the space from next year. The company now feels it would miss out on a sizeable market share if it leaves the space but its rivals stay put, these people said.

The company will stop selling diesel cars ahead of April 1 deadline to meet new emission norms, but plans to re-enter the market in 2021, they said. It has begun work on a 1.5-litre diesel engine meeting BS-VI standards, in line with rivals Hyundai, M&M and Tata Motors.

The company is likely to strap the proposed diesel engine first in the Ciaz, Ertiga and S Cross, and subsequently in the Vitara Brezza and a seven-seater version of the SUV. In the hatchback and small sedan segments of Swift, Baleno and DZire, it would offer a CNG or hybrid engine as an additional option to buyers along with petrol, as there would be no diesel variants, the people said.

A Maruti Suzuki spokesperson declined to comment. A petrol specialist, Suzuki for decades had relied on a Fiat-supplied 1.3-litre multijet plant to power its mass-market diesel vehicles. The Italian company isn’t upgrading this to the new emission standards, so Maruti Suzuki is developing its own 1.5-litre plant, people said.

Barring the Volkswagen Group and the Renault-Nissan alliance, Maruti Suzuki’s rivals Hyundai, Mahindra, Tata Motors and Honda Cars are all upgrading their 1.5-litre diesel engines to meet BS-VI standards.

“It is a given that the 1.5-litre diesel has to come (for Maruti Suzuki), but everyone is keenly waiting for the final report on techno-commercial viability. Just Maruti Suzuki volumes alone may not make the business case, hence supplying for Toyota models in the future is an option being discussed to lower the cost,” said a parts supplier to the company.

An expected move from Maruti Suzuki, they can't give away the diesel share on platter to Hyundai, M&M , and others. They might even re-enter much before the said 2021.

Source: ET Auto

[Storm2.0]

Maruti should be reprimanded and punished for fear mongering and spreading fake news in the market about the withdrawal of their diesel cars. I think they did this act intentionally.

[cheetahrd]

After studying the market and other rivals not backing down, they changed their strategy to reenter the market.
What is the benefit if their act was intentional?

[narayans80]

It is naive to assume that Maruti was stopping diesel overnight even from the initial news few months back. It was only the national engine that was meeting its end and hence diesels in small cars, not diesels in Suzuki. The official review of the 1.5D (Maruti 1.5L Diesel : Official Review (Ciaz, Ertiga)) published in July 2019 (meaning it was compiled May or June 2019) mentions the following 2 lines:

• BS6 version is in the works. Confirmed

• Might miss the April ‘20 BS6 deadline by 9 – 12 months

[coolkurt]

Maruti knew that they wouldn't have the engine ready in time for BS6 implementation. So the entire fear mongering and adverse statements in the press was aimed at discouraging consumers and competition alike to expect and develop diesel BS6 variants respectively.

Maruti expected that since they're the market leaders, they'll dictate and the market fill follow. Which certainly didn't pan out as they expected.

[longhorn]

Instead of Maruti building a diesel engine and sharing with Toyota, they should have focussed on getting a Toyota diesel engine for Maruti and Toyota. Toyota diesels are much more reliable than Maruti any day.

[Rahul Rao]

@longhorn Toyota does not have a 4 cylinder Euro6 / BS6 engine below 2.8 Lit. As far as I know a smaller engine will be a joint development between Toyota and Suzuki.
Technically it is easier to make a low rpm large displacement diesel cleaner as well as more efficient, but the market and govt demands smaller faster engines.


Rahul

[RaghuVis]

Am surprised ET Auto considers this as NEWS when every Tom Dick and Harry knew about this for months. Is ET saying something that we don't know? Lazy Click-bait news to keep their website running.

Originally Posted by longhorn

Instead of Maruti building a diesel engine and sharing with Toyota, they should have focussed on getting a Toyota diesel engine for Maruti and Toyota. Toyota diesels are much more reliable than Maruti any day.

Am surprised you say this. Did you miss the official review of MSIL 1.5 Diesel Engine by Team-Bhp? It's the first time Team-Bhp has done a standalone review dedicated to an engine. All these years, everyone was blaming MSIL for not having it's own Diesel engine and finally when they make, they are again blamed, this time for making it!

The day is not far when Toyota will use this Engine in their Compact vehicles for India. Not immediate but definitely in future.

[avira_tk]

Maruti should have given a breakup of the contribution of diesel sales to the profit over the last decade, it would have crashed the share price quickly. The growth was driven almost entirely by diesel, the S Cross and the Brezza are diesel only models and they aren't entry level low margin models. I would say that most car purchases were driven by the performance/efficiency combination of the 1.3 diesel.

The death of diesel is greatly exaggerated, just a few days ago there was an article on autocar UK about how prices of new and used petrol cars had crashed as diesel sales didn't drop as the press predicted. Diesel still reigns for large SUVs and that's where the growth is. The Chevrolet Suburban launched yesterday has got a diesel engine, this, in anti diesel USA, petrol is not fuel efficient under load, that'll never change.

[84.monsoon]

Originally Posted by Storm2.0

Maruti should be reprimanded and punished for fear mongering and spreading fake news in the market about the withdrawal of their diesel cars. I think they did this act intentionally.

Yes, Maruti has never taken responsibility as a market leader (with over 50% share) to develop the market, set the right standards on safety or build infrastructure. They have always been opportunistic putting short term profits over welfare of the customers and the environment.

They should be severely punished for unethical market practice of intentionally and falsely declaring they will get out of Diesel cars, just to sell off their existing inventory of cars based on the ancient DDIS engine.

[Reinhard]

Originally Posted by 84.monsoon

Yes, Maruti has never taken responsibility as a market leader (with over 50% share) to develop the market, set the right standards on safety or build infrastructure. They have always been opportunistic putting short term profits over welfare of the customers and the environment.

What you have accused Maruti of is spot on. However, nothing wrong in it at all. Thats the philosophy with which the company intends to do the business. Looking at the market share - it is working. The mass market is hugging their products tight. Why would any CxO try to change a working formula by shifting strategy and making costlier cars? If that backfires, the management will get crucified. Better to simply work in the interest of the organization's profits. Businesses are for making money after-all.

Their strategy is to be a safe player. When there is a success story (EcoSport for example), they can easily follow it & immediately beat it thanks to the Maruti badge. This strategy ensures maximum shareholder confidence & rock solid market capital.

Originally Posted by 84.monsoon

They should be severely punished for unethical market practice of intentionally and falsely declaring they will get out of Diesel cars, just to sell off their existing inventory of cars based on the ancient DDIS engine.

Nah, punishment? How? How can anyone prove whether they did this intentionally? Even if they did - thats a very smart strategy to make competition stumble. They only said something. Didn't ask anyone else to do anything on their action did they? Absolutely legal.

As for the DDiS - old yes. But nothing wrong in that. I'd use the term "proven" instead of "old". I don't know why suddenly folks are starting to hate that engine. It still gives other engines the run for their money with its formidable mileage, respectable power-torque and bullet proof reliability even with Indian abuse. I'm really sorry to see that engine going into sunset with BSVI. A small 1248cc engineering marvel. Perfect for our city car needs.

[ramzsys]

If only their cars are U turn friendly as the manufacturer is!

[Reinhard]

Originally Posted by ramzsys

If only their cars are U turn friendly as the manufacturer is!

Yeah the cars are more of "O" turn friendly! Keep on turning unless intervened.

[longhorn]

Originally Posted by RaghuVis

All these years, everyone was blaming MSIL for not having it's own Diesel engine and finally when they make, they are again blamed, this time for making it!

The day is not far when Toyota will use this Engine in their Compact vehicles for India. Not immediate but definitely in future.

I'm not blaming Maruti for anything. I should have made myself clearer. What I'm trying to say is that given the fact that Maruti is not exactly an expert in making diesel engines and the fact that their 2 cylinder diesel mill (on which the 1.5D is based) was a complete disaster I would be more comfortable with a Toyota diesel engine under the hood than a Maruti one, in light of the new partnership between the two companies. The reliability of the Toyota diesels (read Innova / Fortuner) are well known whereas Maruti has no such track record to show for.

The same base engine can be built upon for various models of both Maruti and Toyota by adding / removing cylinders, turbocharging etc.

[84.monsoon]

Originally Posted by Reinhard

Thats the philosophy with which the company intends to do the business. Looking at the market share - it is working. The mass market is hugging their products tight. Why would any CxO try to change a working formula by shifting strategy and making costlier cars?

I see your point of view, however, being a market leader with such a large share brings its own responsibilities. In an oligopoistic market, the leader cannot behave in an irresponsible and opportunistic way. In most global industries which are like that, the leader is held to account. Take for example, the seeds business - It is an oligopoly with only 2-3 main players (like Monsanto, DuPont, Syngenta) and millions depend on the companies for livelihood and quality of life. What these companies say and do is scrutinized, since it can affect the many smaller players' existence and survival. If Monsanto announces that it will come into a new seed category in a country, smaller players will get wiped out and if it exists a category they may need to grow and expand to fill the space. This involves capital decisions, jobs, real estate. If the leader, who is a 10,000 pound gorilla makes a statement and others in the market execute strategies to counter that position, often involving jobs and investments, the leader cannot simply turn around and do something different that causes the smaller rivals to lose. This is the essence of why anti-trust laws exist, to protect small competitors in primarily monopolistic/oligopolistic markets.