Maruti Suzuki India Limited has planned to close its largest ever diesel engine assembly plant in Gurgaon in the future. The Suzuki Motor Corporation unit can either convert the diesel engine line in the Gurgaon plant to make a petrol engine or add a line for the gasoline engine at its plant in Manesar. Three people directly linked to this in this regard said this. Both factories are located in Haryana.
Demand for diesel vehicles has decreased in India and Maruti’s plan is to bring the fuel and CNG cars along with eco-friendly hybrid cars and electric cars. After the implementation of Bharat Stage VI (BS VI) emission norms in India from April 1, 2020, the sale of diesel cars is expected to fall sharply. Upgrading existing BS IV diesel engines to BS-VI norms will make them quite expensive. Keeping this in mind, Maruti has planned to stop the diesel engine.
At present, Maruti assembles the 1.3-liter diesel engine assembled from Fiat located in Gurgaon. These include the best-selling models such as Baleno, Vitara Brezza, and Ertiga. Gurgaon plant also makes 800 cc diesel engine. The capacity of the diesel assembly line in Gurgaon is approximately 170,000 engines per year. Automaker also prepares Fiat’s 1.3-liter diesel engine in its Manesar plant, with an annual capacity of approximately 300,000 units.
In the coming days, Maruti will not offer a 1.3-liter diesel engine and during this time the diesel engine in Manesar will be sufficient for demand in the assembly line market. Significantly, the diesel vehicle is considered to be more polluting than those of petrol. The price of diesel cars is still higher than the petrol model.
Diesel cars share fall
According to the data of the Society of Indian Automobile Manufacturers (SIAM), the share of petrol cars in India has increased from 47% in FY14 to 60% in FY’2018. During the same period, the share of diesel vehicles fell from 53% to 40%. Suzuki has already started working on a full hybrid car for India and has set a record $ 1.4 billion for research and development. The company has also requested the Central Government to extend retail outlets for CNG, along with the increase in sales of Maruti’s CNG vehicles by 50%.
Investment in diesel engine plant in 2012
In 2012, Maruti’s board decided to invest in diesel engine plant in Gurgaon due to the growing demand for diesel cars in India. In 2015, Maruti had renewed its agreement with Fiat for the 1.3-liter diesel engine.
At present there is no shortage of diesel engine
Another person said, on condition of anonymity, senior officers in Maruti believe that diesel engine manufacturing capacity in Manesar will be sufficient to meet the demand in the coming years. Apart from this, changing the existing assembly assembly line can take up to one and a half year so the reduction in diesel engine will not be immediate.