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India seems to have recently started pushing hard to clean up its air, as evidenced by the National Green Tribunal s (NGT) orders against diesel cars and the rollout of Bharat Stage IV (BS IV) standards. The latter move in particular has had a wider impact, and the government plans to move directly to BS VI norms, skipping the Euro V norms entirely and going for Euro VI. It has already laid draft rules for the emission standards that it plans to roll out from 1 April 2020. In a broad interview with ET Auto, Maruti Suzuki India s Chairman RC Bhargava suggested that this push to BS VI will effectively kill the market for small diesel cars.
Oil public sector undertakings (PSUs) will be investing INR 28,750 crore in the transition from Euro IV to Euro VI standards for cleaner auto fuel. Road Transport and Highways Minister Nitin Gadkari said earlier in the year that Euro VI compliant fuel may be introduced ahead of the 2020 deadline in metro cities, with Delhi getting the highest priority for the rollout. He said that the leapfrog to Euro VI will significantly reduce pollution in the NCR region and other metros. The decision comes as debate rages over the rising pollution levels. Also Read: 2017 Maruti Suzuki Ciaz facelift to get 1.6L diesel engine; will be sold through NEXA
Speaking about the public criticisms related to diesel cars in India and how they impact the air that citizens breath day in and day out, Bhargava noted that public perception on diesel cars is largely backwards and wrong. He suggested that commercial vehicles, many of which still are still plying on Indian roads despite being only compliant with older standards like BS II, are also to blame for the pollution impacting Indian cities today. He added that two-wheelers in India also continue to use old technology. Citing an IIT Kanpur study, he said that passenger cars, including diesel ones, contribute just 2% of the air pollution in the NCR region, while two-wheelers contribute around 6% and commercial vehicles contribute around 9%.
Most of India still follow BS III norms, while major cities are adapting to the BS IV standards, which are set to be implemented across India from April 2017. BS IV fuels have 50 parts per million (ppm) f sulphur and BS VI fuels will have 10 ppm. While oil PSUs are expected to catch up with the rollout schedule, Bhargava believes that smaller cars will not be able to cope up, and will go out of production. He suggested that diesel car prices will rise further after the BS VI norms are put in place in 2020. As a result, diesel cars that cost INR 5 lakh right now will cost a lakh more, while BS VI-compliant petrol cars will still cost around INR 4 lakh. As a result, he expects consumers to shift away from diesel variants of smaller cars.
Fuel producers in India have to and are willing to invest in the switch to BS VI standards, but automakers also have to make their own investments to switch their diesel power-trains to utilise the new BS VI grade fuel. Petrol engines would only require minor adjustments, so the level of investment there would be far less, according to Bhargava. A wide gap of around 2 lakh is expected between the petrol and diesel variants of a car, as opposed to the narrower price different that is prevalent right now. Meanwhile, carmakers like Maruti and Hyundai are also investing in mild hybrid technologies to raise the efficiency of their existing petrol models to match that of diesel cars, and to also capitalise on government incentives like the FAME initiative to lower prices.
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