While government is putting its weight behind the BS-VI emission norms, and for good reason too, it might force the hand of auto manufacturers to take some tough calls. Maruti Suzuki, the biggest car maker in India, has reportedly said that it will stop producing diesel variants for its smaller models after BS-VI comes into effect by April next year as their value for money will take a hit.
As of now, the price difference between petrol and diesel variants of similar trim constantly hovers around Rs 1-1.5 lakh for all models, even the premium ones. Once the BS-VI norms come into play, the diesel engines will have to be fitted with particulate filter and a tube for ammonia to clean the exhaust. These enhancements are likely to add another Rs 1 lakh to the price of a diesel car.
While manufacturers are still trying to fathom the exact effect of BS-VI norms on the prices, the price gap between a diesel variant and a comparable petrol option will effectively increase to somewhere in the range of Rs 2-2.5 lakh.
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Although premium cars could absorb the price increase due to BS-VI, it will be the smaller cars that will be in trouble. While the premium of Rs 1-1.5 lakh a buyer pays now for a diesel option can be recovered in 4-5 years of regular use, a difference of Rs 2-2.5 lakh will be hard to recover during the 10-year span that diesel cars are granted before they are taken off the roads.
Maruti Suzuki, which offers value for money cars, is likely to shut down production of diesel cars if they become too costly. Maruti Chairman RC Bhargava said that it does not make sense to invest in launching diesel cars, according to CarDekho. This could mean end of line for diesel variants of Maruti Suzuki's Baleno, Swift and Dzire.
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Edited by Vivek Punj