Maruti Suzuki aims to sell 1.4 lakh CNG cars this fiscal: Believes diesel cars becoming unattractive

Maruti Suzuki CNG car line up at present includes Alto, WagonR, Eeco, Tour S, Ertiga and Super Carry. The numbers in terms of sales for diesel cars have been coming down with the rise in fuel prices and people are no longer finding them cheaper. Here is why CNG cars make more sense compared to diesel cars now.

Maruti Suzuki is aiming to sell up to 1.4 lakh CNG cars in the ongoing fiscal, betting on their low running cost and increasing availability of the fuel as a result of expansion of the city gas distribution network across the country. With diesel prices rising constantly, even surpassing petrol rates in Delhi, the company believes that diesel passenger cars are gradually becoming more unattractive as customers do not gain from lower running costs of these vehicles. On top of that, after the implementation of BS-6 fuel norms, diesel cars have become more expensive than their petrol counterparts. “Issues that were holding people back from buying CNG cars were scarcity of CNG fuel outlets and apprehensions about the safety and performance of such vehicles,” Shashank Srivastava, Executive Director, Marketing and Sales at Maruti Suzuki India, told FE.

However, with the government pushing for more CNG consumption, the total number of such outlets are set to reach 3,400 by the end of this year, doubling from the number of stations available roughly 18 months ago. “We have seen that wherever CNG outlets are available, like Mumbai, Pune, Gujarat or Delhi, the sales of these cars are quite high,” Srivastava added. Compared with the average running cost of Rs 3.5 per km for petrol cars, CNG cars run at Rs 1.5 per km, while the price difference between them is only around Rs 50,000 – 60,000. “This year, despite the Covid-related disruptions, we are planning to sell 1.35 lakh to 1.4 lakh CNG cars,” Srivastava said. Even though there was an 18% drop in passenger vehicle sales in FY20, the CNG segment had recorded a growth. “For us, it grew from about 99,000 units to 1,07,000 cars in FY20,” Srivastava added.

About the issues of safety and performance, the company is campaigning that such apprehensions are not valid for factory-fitted cars. “Their fuel line, software and suspension are specially designed for factory fitted CNG cars which makes them as safe and efficient as liquid fuel cars,” Srivastava said. CNG cars offered by Maruti Suzuki include Alto, WagonR, Eeco, Tour S, Ertiga and Super Carry. The sales in diesel cars has been coming down with the rise in the price of this fuel, as people no longer find it cheaper. “But with petrol and diesel rates nearly equal, it does not make any economic sense to buy diesel cars,” Srivastava said. The cost of diesel cars has also gone up after the implementation of the BS-6 fuel norms, widening the price gap between petrol vehicles. Earlier diesel cars used to cost about Rs 90,000 more than the petrol variants, but now the difference is Rs 1.25 lakh to Rs 2 lakh, which has industry watchers forecast that diesel car sales will likely fall further going forward.

“Since petrol prices are also rising, we believe now customers will start tilting towards CNG as they will be looking for cars with lower running cost,” Srivastava said. The share of diesel cars in the passenger vehicles segment used to be 60% in FY13, when the fuel price difference was about Rs 30 a litre, and in FY20 it was less than 28%. In the last quarter of FY20 it was only around 17% and in the hatchback segment, it was less than 5%.

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