Maruti Suzuki MD Calls for Industry Unity on Emission Norms to Keep Entry-Level Cars Affordable

In a letter referencing the legacy of Ratan Tata and Osamu Suzuki, Maruti Suzuki India Limited's Managing Director, Hisashi Takeuchi, has appealed to Shailesh Chandra, president of the industry lobby Siam and managing director of Tata Motors Passenger Vehicles, for a unified approach to address the impact of upcoming Corporate Average Fuel Efficiency III (CAFE III) norms on affordable cars. Takeuchi expressed concern that the stringency of these norms, particularly for smaller vehicles, could force Maruti Suzuki to discontinue its entry-level car models, thus hindering the transition for two-wheeler users to car ownership.

To bridge industry divides, Takeuchi proposed a quid pro quo: Maruti Suzuki would back suggestions from Tata Motors and Mahindra & Mahindra Limited to support small commercial vehicles (CVs) in the context of the CAFE III norms, provided they, in turn, support relief for the super-small car segment. Maruti Suzuki currently dominates the small car market with a nearly two-thirds share, while Tata Motors and Mahindra & Mahindra lead in small CVs. The differing views between Maruti Suzuki and Tata Motors on these specific segments have prevented Siam from submitting a unified response to the government's draft CAFE III norms, which were released on September 25th.

Takeuchi highlighted that emission targets are disproportionately tightening for small cars (around 1,000 kg) compared to larger vehicles (around 2,000 kg) under CAFE III, potentially penalizing them heavily despite being inherently fuel-efficient. He questioned whether discontinuing these essential vehicles would benefit society and the economy.

Impact: This news has a significant impact on the Indian automotive sector. Stricter emission norms could lead to increased manufacturing costs for small, affordable cars, potentially raising their prices and making them less accessible. This could slow down the adoption of four-wheelers for lower-income households and impact the sales volume of manufacturers heavily reliant on this segment. The delay in industry response to government policy also creates uncertainty. Rating: 8/10

Difficult terms used with their meaning: Corporate Average Fuel Efficiency III (CAFE III): A set of government regulations that sets targets for the average carbon dioxide (CO2) emissions of a manufacturer's entire fleet of vehicles. CAFE III is an updated, likely more stringent, version of these standards. Siam: Society of Indian Automobile Manufacturers. It is the main industry body representing vehicle manufacturers in India. CO2g/km: Carbon Dioxide grams per kilometer. This is a standard unit measuring a vehicle's emission output per unit of distance traveled. Light-weighting: The process of designing and manufacturing vehicles using lighter materials or designs to reduce overall weight, thereby improving fuel efficiency and reducing emissions. Super-small car segment: Refers to the smallest and most basic category of passenger cars, characterized by low cost and essential features.