CNG is the new diesel in Maruti Suzuki’s sales mix, Auto News, ET Auto

 Maruti Suzuki has 14 passenger vehicle models and 2 cargo carriers in its portfolio now.
Maruti Suzuki has 14 passenger auto products and 2 cargo carriers in its portfolio now.

When Maruti Suzuki made the surprise announcement of its conclusion to desist from diesel vehicles in the domestic sector on April 25, 2019, their revenue share to the OEM’s total portfolio was shut to 22%. Diesel vehicles ended up stopped on March 31, 2020, the day in advance of the starting of the BS-VI era.

Nonetheless, the OEM switched above to CNG to plug that gap. At the conclude of December 2021, CNG types contributed 15% of Maruti Suzuki’s in general product sales.

If the recent CNG demand trend proceeds, and Maruti Suzuki’s internal plans get executed, income share of CNG vehicles could be very similar to that of the diesel types 3 many years ago. The company has strategies to present CNG selection to another 3 to 4 versions in its portfolio in the upcoming couple of months.

Maruti Suzuki has 14 passenger vehicle versions and 2 cargo carriers in its portfolio now. With the planned additions, 10 -11 of its designs will give CNG alternatives.

“The existing CNG share in our sales is at 15%. It can really go outside of our diesel share of 22%, just by the enhance in portfolio. I am not looking at the current market expansion which is also anticipated. So, the two with the boost in portfolio and the market place expansion, I would see that the share of CNG can exceed 22%, which we employed to have in diesel,” Shashank Srivastava, Senior ED – promoting and profits, Maruti Suzuki, explained to ETAuto.

The OEM’s types with the best share of CNG sales are Tour S (78%), a edition of the Dzire sedan for fleets, and Ertiga (46.4%) in the personalized automobile phase.

In the domestic passenger automobile sector, Maruti Suzuki and Hyundai Motor India have been the only OEMs supplying types with a factory-fitted CNG procedure. Tata Motors’ entry into this place with its Tiago and Tigor versions on Wednesday completes the presence of the major 3 passenger car OEMs in the developing CNG sector. Tata Motors expects the CNG variants to add all around 30% of every of these model’s profits.

CNG demand from customers in the domestic passenger motor vehicle marketplace stood at 172,000 units through 2020-21. It crossed 160,000 throughout the latest economical year. With sales of 132,000 models during April – December ‘21, Maruti Suzuki experienced 82.5% current market share in the CNG segment. There will be escalating competitiveness in this room with the entry of Tata Motors which is pursuing an aggressive expansion system.

Once-a-year CNG PV Volumes in India

2019-20 2020-21 2021-22 (YTD)
Business 115000 172000 160000
Maruti Suzuki 106000 150000 132000

Development drivers

The increase in gas prices, and the substantial hole between CNG and petrol/diesel rates are observed as the critical drivers for the adoption of CNG vehicles even for particular use. The government’s system to broaden the CNG dispensing community to 10,000 stations is also fuelling the CNG development development.

Nevertheless, the sustainability of the CNG adoption craze would hinge on a couple of components like gasoline price tag motion, and the continued ban on CNG kit retro fitment in BSVI vehicles. The latter is also one of the explanations for OEMs to be expecting very good quantity options in the CNG area.

Maruti Suzuki expects the robust progress of the CNG auto marketplace to continue in 2022. It is learnt that the company experienced a goal of marketing all over 250,000 CNG vehicles during the latest economic calendar year. It is unlikely that this focus on would be arrived at, as the pandemic also impacted production and profits. The focus on for FY23 could be to double the gross sales quantity, in accordance to a resource.

“During the 2nd COVID wave, for a few months all the cylinders had been diverted for oxygen supply and there was no CNG output. As a outcome, there has been a develop-up of pending bookings, and the waiting around periods are also higher for CNG models. There has also been a decline of volume simply because of this,” Srivastava stated.

In spite of the disruption, the development fee of CNG vehicles has outpaced diesel/petrol vehicles for the duration of the current monetary 12 months. “The in general passenger motor vehicle quantity in the economic year went up by about 5.2%. But for CNG the expansion was by much more than 50%,” he extra.

Changing vitality-blend

For Maruti Suzuki, the need for CNG vehicles is encouraging it cover a excellent part of the dropped quantity in the diesel passenger automobile phase. Though the diesel need in the general sector is on the decline, there are segments wherever Maruti Suzuki is losing quantity possibility due to the absence of a diesel featuring.

The midsize SUV segment, with players like Hyundai Creta, Tata Harrier, and Kia Seltos, sees close to 57% of the gross sales volumes from diesel. In contrast, in the hatchback section, a stronghold of Maruti Suzuki, the share of diesel is estimated to be just all-around 1%. It could be that Maruti Suzuki would glance at supplying just one or two petrol midsize SUV/SUVs to alter the gasoline-mix in the market. There may well not be any current market for a CNG SUV. But the relaxation of the passenger motor vehicle marketplace is set to see greater proliferation of CNG passenger vehicles.

In the passenger car phase, CNG/Bio-CNG, and hybrids will variety a great part of the future energy-blend. Maruti Suzuki, currently being the most significant participant, could engage in a critical position in shaping the pattern,” V G Ramakrishnan, Taking care of Partner, Avanteum Advisors, mentioned.

Affordability currently being a essential pitch for Maruti Suzuki, electric vehicles don’t appear to be a priority for it nonetheless. Alternatively, alongside with petrol and CNG in the shorter-term, mild and powerful hybrids could form the electrical power-blend for Maruti Suzuki’s merchandise portfolio for some time to arrive.

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Run by following era Twin Jet, Dual VVT K-Series 1.0L engine, the new VXi variant design with S-CNG know-how provides a mileage of 35.60 km/kg and has a CNG tank capability of 60 litres, the firm said.

The auto significant has currently hiked the motor vehicle costs three times past year – by 1.4 % in January, 1.6 % in April and 1.9 % in September, using the full quantum to 4.9 %.