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-   -   BS6 small diesel engines - Doomsday predictions v/s the reality & disparity (https://www.team-bhp.com/forum/indian-car-scene/219044-bs6-small-diesel-engines-doomsday-predictions-v-s-reality-disparity.html)

With the 2020 Auto Expo over - we now have good clarity on the BS6 transition and how the various companies have approached the big question-mark on making the small diesel engines compliant with the stringent emission norms.

The end result is as follows -

Ford - 1.5L Diesel was made BS6 compliant at a premium of only Rs 13,000/- more.

Hyundai / Kia - 1.2L Diesel made BS6 compliant at an additional premium of 17,900/- Smallest BS6 diesel engine on offer, whereas all other manufacturers have stuck to 1.5L engines as their base diesel formula.

Kia also has the BS6 compliant 1.5 diesel which should be launched in the Hyundai Creta as well soon.

Honda - 1.5 diesel in the Amaze made compliant for 30k over the BS4 variants.

TATA - 1.5 Diesel engine made BS6 compliant for 41k on some variants. Since the Nexon has been facelifted as well, the added premium could also be due to the facelift, making the BS6 transition even cheaper. The small 1L diesel engine in the Tiago/ Tigor was dropped as not being economically viable for BS6 compliance.

Mahindra - No confirmed news on the launch of their small BS6 diesels yet! The 1.2 litre diesel engine in the KUV 1OO has been axed as per reports - but Mahindra still has three different 1.5 diesel engines in the XUV 3OO, TUV 3OO, and the Verito, which are supposed to be made BS6 compliant.

Maruti Suzuki - Working on making a new 1.5 diesel, BS6 compliant engine after they completely lost the plot against rivals. Mr Bhargava declared in 2018 that Maruti isn't keen on diesel engines in small cars as the expected cost is 2,50,000 over the petrol engines. And now Mr Kenichi Ayukawa had to openly admit their blunder - "Our understanding was that the cost will be very high but looking at the competitors’ proposals, it’s competitive,”

Maruti even developed an excellent new 1.5 diesel engine to be launched in 2019, only to be discontinued within a year!

How could the market leader get it so wrong? :eek:

Renault / Nissan - Axed their bread and butter engine - the K9K diesel.

Toyota - Axed the 1.4 D4D engine, along with the cars using it. The taxi market is going to miss this one, for sure.

Volkswagen / Skoda - Once bitten, twice shy! Volkswagen plans to move away from diesels altogether, with the 1.0 TSi petrol being the new mainstay of the VW lineup.

FCA - The 1.3 Multijet was truly the backbone of the Maruti Suzuki small car range, but with Maruti backing out of demand and TATA moving on to their own engines as well, and FCA not having any more small cars in their range - the production has been stopped.


So what happened?

How can the end result be so different?

How did some companies achieve compliance with a small premium of just 13,000/- whereas someone else dropped a huge diesel portfolio with predictions of an added premium of 1,50,000?

Maruti was selling more diesel cars in the country than most other manufacturers combined, and yet - they decided to abandon diesel engines. Toyota handed over the taxi market to others on a silver platter, and Renault/Nissan gave up on the only reason they have been able to sell cars above the entry segment.

Will diesels really lose out completely?

I highly doubt it, given the competitive price for some of the models. It does look like the diesel customer base may reduce, but not so much that the market segment becomes insignificant for companies to invest in!

Taxi and commercial segment isn't moving away from diesels soon either - till electric mobility starts making financial sense.

Why the fear-mongering?

Maruti, Toyota, SIAM - Everyone seemed keen to paint a very grim future of BS6 diesel engines initially, but the transition seems to have happened like a walk in the park for the other camp.

And now - after seeing the results, Maruti seems to be trying to get back in the race!

And do we have a can of worms waiting to be opened?

It is obvious that cheaper BS6 compliance on these smaller diesel engines have been achieved just by using NOx trap and without the expensive SCR and DEF injection components that were supposed to make BS6 diesel engines very expensive.

What does one group know that the others don't?

Volkswagen once made the wrong bet with the installation of a Lean NOx trap on their cars instead of the urea-based systems - and paid heavily for this decision. But - this was primarily on the bigger 2.0 diesel engines. But that seems to have scared them off enough to not try the same on their 1.5 diesel range as well.

What will be end result in the market-share?

Maruti - Toyota camp seems to have been positive back in 2018 about the prospects of CNG and the shift in usage from diesel to CNG at least in the commercial sector. There were news reports that Maruti Suzuki had requested the dealers to invest in CNG stations in preparations for the upcoming shifts in customer preferences due to BS6. Although the company has a large CNG range of cars - I feel the strategy has not really paid off.

Diesel still rules the roost, especially down south and among high mileage private users. With the cost-effective options available from Ford, Hyundai, TATA, and Honda - will there be a shift in market share?

Will Maruti Suzuki be able to hang on to a 50% market share without a single diesel model in their lineup - at least for a short term? And if not - is it possible to recover that market share once lost?

Thoughts?

Excellent thread!

For OEMs managing this conversion at low prices (Ford, Honda, et al.), is there a possibility that the companies are absorbing some of the costs to reduce the shock to customers? The market isn't in the best of shape to pay even higher prices for new cars.

Can we also discuss two related topics on this thread, if appropriate?

1. The reluctance of OEMs to sell (not just launch) their BS6 diesel models before April 2020. Are the engines going to be very sensitive to BS4 fuel?

2. OEMs insist that the diesel cars must be run at higher RPMs frequently so that the accumulated particulates are burnt down and don't choke the DPF. This means new diesel cars are NOT ideal for CITY use. The sales guys don't inform this to a buyer.

One thing is for sure - Maruti was caught with their pants down on this. As the largest market share holder, they usually dictate the terms and direction. However this time around, they just totally missed it.

I see this as a good opportunity for other car makers to cash in on, especially Ford. They have been long enough in the country and the Ecosport, Endeavour and the Figo/Freestyle are well known. I would assume that Ford would be the most happy as they have a portfolio at the budget end.

Honda Amaze too has the potential along with the diesel+CVT combination.

Everyone else is just going to have to wait and watch. I'm sure there are enough customers out there who will prefer diesel engines and the market has actually cut down on the available choices!

There is no way the diesel people will just move over to EVs or for that matter even petrol cars. I'm sure used car value for diesels will go up (pending clarity on the scrapage policy). Had carmakers removed diesels but added petrol hybrid as a somewhat compensatory measure, it could have worked, but just axing the diesel is a bad idea.

Cabbies would not be so much affected as thanks to Ola/Uber, most run on CNG in cities while interstate are usually Innovas.

I think Diesels are here to stay albeit in lower numbers. The EVs are the future, but the technology and associated infrastructure is still some time away to make true influence on new car buyers. The updated BS6 diesels are not very far off the mark in terms of pricing, as compared to the BS4 diesels.

Not sure what the OEMs are thinking or what the real issue could be, KIA and Jeep have BS6 diesels running for quite some time, whereas Tata using same Multijet-II engine is reluctant and waiting for BS6 fuel to be available across nation.

Are there any proposals or plans for real world testing of emissions in India? I fear that while all these diesels with lean NOx trap will comply with BS6 norms under ‘standard testing conditions’, actual emissions will be much higher. When mega companies like Mercedes and VW with big time diesel portfolios and unlimited R&D budgets are having a very hard time complying with Euro6 without SCR and AdBlue, how can the likes of Tata and Mahindra and Ford do that with their existing old engines at a low cost? If and when real world emission testing is introduced in India, it will open a new can of worms.

The VW 1.5 diesel was the best in its segment IMO. It will surely be missed. I can only hope that VW brings in the BS-6 2.0 diesel as soon as they can as a majority of the SUV buyers and those looking to buy luxury segment cars(AUDI) still prefer diesel. With their SUVW future model, the need for diesels can't be emphasized anymore.

The biggest surprise for me was Nissan/Renault axing the 1.5 diesel. This move has pretty much cemented their place as 'fringe' players in the market in the short to medium term, catering mainly to the lower segments.

Ford and Hyundai really deserve a lot of credit for offering BS-6 diesels at a reasonable price and well within the time-frame.

I think the reason for Maruti to put an end to diesels is something other than 'affordability'. The actual reason may be their own profitability. Since they have axed diesels from most other markets, it may not be viable for them to do the research in diesels only for India - even though this is their biggest market. Not just engine development cost, but testing of same car in both fuels, training sales and service technicians, etc will be an overhead. On top of it, there comes the third and fourth - hybrid and electric avatars - to make things more complex to manage. Finding this as an opportunity to persuade people to move to petrol, they announced all the 'affordability' reasons well in advance.

Assuming most of their diesel numbers will be coming from Brezza (10K), Swift (10K) and Dzire (10K), if they can convert 5K each to petrol leaving the remaining to competitors, it is a loss of 15K units per month. That is just 10% sales for them.

Suzuki may be thinking that keeping things and cars simple (eg: Jimny) and staying away from complex things like turbos, diesel and its components may be more profitable for them. Minimum investment and maximum profitability. And you tell the people that you can't afford BS6 diesel cars, so we are stopping it. Actually, it is Suzuki who can't afford diesels.

Don't these small Diesels need to have DPFs? I thought that was one of the more expensive parts of the after treatment process. Black soot is the most identifiable exhaust from a diesel that I thought would require a DPF to sort out fully. My 320d is only Euro V, but it still has a DPF that has kept the inside of the tailpipe clean as a whistle after years of driving, unlike a car without DPF that gets covered in soot in no time at all.

All the hullabaloo we saw from manufacturers some months ago was just to clear BS4 stock, haha. I knew it then and I can confirm it now.

Diesels will live on as long as the IC engine lives on. There will always be takers for diesel cars.

I don't think they'll convert that easily. Even if the price gap between petrol and diesel comes down to as low as 5 or so rupees, diesels always have their advantages, they have loads of torque, have enough punch for the highways and you don't have to wrangle it to the redline to get a move on, and last but not least, have vastly superior mileage under real life conditions.

I don't think 5k will turn to petrol brezza. Maruti goofed up on that. They expected everyone else to follow the leaders steps and discontinue diesels, but most didn't give a hoot and now they're in no man's land.

Good to see manufacturers still holding on to diesel engines for small vehicles. At the back of my mind, I still feel that this is a planned strategy from Maruti Suzuki to test the waters before re-entering the competition.

Why I say so? The general concenus is that Maruti Suzuki knows the nerve of the Indian market. The fact that they have the largest market share at stake also cements this belief. After all, how can a leading manufacturer go against the tide and be wrong at so many levels?

The masses believe that other manufacturers follow what Maruti Suzuki does. The company's earlier statements of high premium for BS6 diesel engines followed by the discontinuation of the 1.3L DDIS engine has created disturbance in the market. The decreasing gap between fuel prices at that time didn't help matters. Even non-Maruti customers took notice and avoided diesel engine cars like the plague. Now that other manufacturers have switched to BS6 diesel engines, there's a ray of hope that small fuel-burners are here to stay for a while.

Maruti Suzuki knows its dominance in the budget car segment. They know what works and what doesn't. What they'll lose on is some market share (not significant given current petrol:diesel sales ratio for new cars) by pulling the plug on diesel engine cars. But it'll hardly take them a few months to get back on track if required. This late entry into the market late will come with its own benefits:

1) They can analyse diesel car sales of other manufacturers and decide if the switch to BS6 will be profitable or not.

2) Be in the news for a longer time by re-introducing diesel engines after the BS6 hype settles. A simple BS4 to BS6 switch will go unnoticed in the current times as a lot of manufacturers are already doing it.

3) Avoid price shock at the time of re-launch. Buyers won't immediately notice the premium for BS6 engine if the models have been discontinued for a while. This puts the company in a safer position to charge a higher premium without having to face the flak.

It's no rocket science to see the fact that Maruti completely missed the trick here. Only question remains is, being the market leader, how they ended up in this position? This is what might have happened. First they decided "Let's not have any BS6 diesels and focus on petrol, electric and CNG, that is the future and market will follow us." Second, they did not have the R&D to develop a BS6 diesel before April 2020 and getting everything from scratch would have been an expensive affair too. If Maruti wanted, I'm pretty sure they could have developed a BS6 diesel complaint engine, this is why I think they missed the trick probably for the first time.

Demand for diesels may reduce, but as long as combustion engines are produced, diesels are here to stay. We need to wait till mid of 2020 to get a clear picture of how market reacted to BS6 diesels.

You compiled it really well. But, I think one more point needs to be added to complete this list - the Government Policies! There is absolutely no clarity on the policy changes. Scarier is the fact that policies are being made and proposed like :Frustrati (well, I can't find a good metaphor to compare it to).

I am currently in market to replace my daily driver - Petrol/CNG. And I am little skeptical going ahead with a Diesel. Although Diesel makes perfect sense for me, as I commute 33 kms one way, daily; that too, mostly on highway. But I want to keep the new car for a decade, and I don't want to scrap it at the end of that term.

You see, the policies are made via the lobby - and with major players out of the game, who's gonna lobby for our small diesels? Government will find negligible resistance to altogether ban the diesels.

To sum it up, the policies are adding more juice to the thrill!

I reckon, being the market leaders Maruti went out of the way for dissuading and arm twisting the industry/public/government. If I remember correctly, their initial interviews on this matter clearly mentioned a price of INR 1.0~1.5 Lacs on account of BS6 conversion, and their decision to withdraw from diesels completely. They clearly wanted the market to forget the diesels going ahead (for reasons best known to them).

Maybe the likes of Hyundais pushed Maruti back and then started the going back n forth on their own diesel strategy. In the process, they might end up losing time and market share. Given the global synergies between Toyota and Suzuki, it wasn't much a surprise that Toyota toed their line for India.

One more case of possible policy twisting comes to mind : When Mr. Gadkari had publicly announced of 'All electric strategy' back in Sep 2017, Maruti had no/limited electric exposure in global portfolio. Come Mar 2018, Suzuki and Toyota had global tie up, which gave Suzuki access to Hybrid / Alternate fuels technology of Toyota. This lead to even government changing its stand later to alternative fuels 'and' electric vehicles.

A lot of obituaries were written for diesel in various threads related to transition to EV or "petrol vs diesel". However, I feel that the value and versatility of diesel is unmatched. Personally if I drive very less, I would rather pick up a EV like Nexon or Altros than a petrol. I will get the double benefit of lower taxes and no fuel costs. But if I drive a lot, diesel is the only choice. Now with BS6, the emissions are much lower and closer to that of a petrol, diesel will be around for some time to come.