India’s car market leader Maruti Suzuki, which announced an exit from the diesel segment by April next year, is now betting on multiple technologies with CNG being key among them. It is keeping an eye on the diesel space too. C V Raman, Senior Executive Director — Engineering, Maruti Suzuki India, speaks to Autocar Professional's Sumantra B Barooah.
The Ertiga has a diesel variant as of now. If there is a demand, will you consider a diesel variant for the XL6?
We are looking at it. We already have a BS IV engine, which is the 1.5-litre one. We also have the 1.3- litre Fiat-designed engine that is built by Maruti but that has reached its end of life. We are not working on a BS VI engine for the 1.5-litre variant at the moment. We want to see the kind of change which is going to happen in the market situation and the customer requirement.
There are other factors like price difference between petrol and diesel, which has come down. We believe the cost of the BS VI engine is going to be higher than the BS IV engine. There is a DPF that will be required and there is a lean NoX trap. We also need to change the fuel-injection system and also the calibration. We need to inject fuel to reduce the soot in the exhaust. There is a drop in fuel efficiency due to method change and also because of the consumption of fuel. There is a methodology change in BS VI. We have to improve the efficiency of the BS VI engine. The current delta between petrol and diesel is Rs 100,000 and it is bound to go up significantly, maybe by up to Rs 200,000. The price point is determined not by cost alone. For Maruti Suzuki, this cost increase may not be accepted by the customer.
The bulk of the diesel segment is in the under-four-metre hatchbacks and sedans, and in the B segment (MPV and SUV) that is where the 30-40 percent lies. This is all up to 1.5 litres, which is where the cost increases more. So if a Swift customer is made to pay a Rs 200,000 difference, whether it makes a value proposition for him or not is the question that we have. We feel that we can wait and watch. Today, if the diesel segment is 30 percent (of the market), then it may become, once BS VI comes in, 15 percent of the market.
Third, sentiment from the environmentalists on the BS VI diesel itself is not very good. The emissions of the BS VI petrol and diesel are almost the same, so there is no reason why the diesel should be demonised. It should be left on the merit of the technology and not because of the perception of people. We have a particulate filter and the PM level here is excellent as far as India is concerned. That figure should do the talking and not anything else.
There is also a ban on 10-year-old diesel vehicles. The BS VI petrol or a diesel is the same, so why should there be a differential of 5 years? People should look at it in perspective. The sentiment is not, today, built based on facts and figures but more on feeling. The market is an indicator of that.
We hear that after the diesel strategy announcement, some people in the market thought that maybe the Vitara Brezza itself will get discontinued?
For Maruti to vacate the Brezza segment is not possible. We have kind of grown the market for the compact SUV segment. We may not come in first, but we have grown the market to its current situation
Surely, the work is happening as far as the petrol is concerned. I've been saying repeatedly that yes, we are working on it, we will bring it. It is a matter of time. So, there is a timing which is already associated with it.
Now CNG is being seen under a new light. How big will be Maruti Suzuki’s bet be on this fuel? Also, how about an XL6 CNG?
The government and the Prime Minister has been saying that we are going to move to a gas-based economy. He said it in his Republic Day and more recently in his Independence Day speech. It was mentioned at the MOVE Summit too.
We are now increasing the CNG portfolio. We have seven models and we are one of the few manufacturers who do a factory fitment. We have increased our volume to 100,000 units in CNG in a year. If the distribution infrastructure improves then we will do more. There should be a technology agnostic approach -- yes, petrol should be there, diesel too and so should CNG. There could be other technologies also which should be incentivised or be looked at, as long as they are meeting the objectives, are environment-friendly and provide energy security. CNG does provide energy security, the CO2 levels are much better. So from the efficiency perspective, it is much better.
So there is no reason why we should not be propagating CNG as an alternative fuel, and we are happy to do that. We will be happy to do that for LPG also. If the price is competitive, we would definitely be willing to do that.
And other alternate fuels?
We're working with the government for methanol also, and our vehicles are up to 10 percent ethanol-compliant. If the government looks at 20 percent ethanol blend, we can do that as well. We are in talks with the government to know when it will be available across India. One thing that needs to be kept in mind is that all these things require different dispensers.
How is the technology approach on the electric mobility in your fleet of 50 vehicles, which I understand are being monitored almost on a daily basis?
There are various parameters that are being looked at in terms of temperature, charging times, in terms of range, stop-go traffic, different traffic situations. So all of that is input for us. We are finding out many new things, which I will not be able to discuss, but many learnings and all of those things we will definitely use it for the development of our electric vehicle(s).
Are you on track for a 2020 introduction?
We are working on it, but having said that I would definitely say that the cost of the electric vehicle is not coming down in the immediate future, that's what I believe. It is not just the battery price. It is the motor price and the power electronics. The incentive is only on the battery but there is no manufacturing of power electronics or battery or motors in India. All of those we are dependent on local suppliers and have limited capacities. So, with low volumes, you are going to get very high prices unless you increase the volume. It's a chicken-and-egg situation and you don't have infrastructure, you don't have the proper distribution system.
Considering that Maruti has been instrumental in building the vendor ecosystem in India. Are you having discussions to do the same in electric mobility too?
We would do that because we also believe that going forward, electrification of the fleet is an important aspects. You need to look at hybrids and EVs too. Maybe in future plug-in hybrids, which are very popular in Europe today. They all have very common synergies across as far as supply chain is concerned in terms of battery technology, power electronics, motor technology, and similar to what we see in the IC engine space. So you need to develop that ecosystem and you require scale. Also, there has to be proper motivation for doing that. The motivation is only for one technology, which is not okay. Motivation has to be for other technologies too.
Please understand that even if you make 20 percent or 30 percent of the vehicles electric by 2030, there's a huge number of IC engines which are still required to be made more environment friendly. You also need to electrify them or have alternate fuel or something to make them more cleaner or more efficient, reduce the Co2. So, there has to be a motivation for that also.
Right now, in the SUV portfolio, except for the Brezza, you don't have an SUV. The trend for the mid-size SUV is here to stay for maybe another 5-10 years. So what's your thought about filling that gap of opportunity?
Opportunity is definitely there, we are looking into it.
Will the Jimny be a feasible option for Maruti Suzuki?
The three-door is a very niche segment in India. What is required for India is a five-door model. That means we have to do a new development, which would require time and cost. The possible volume against the required investment does not make sense for us.