The Indian market had been tilting diesel’s way for a while – and then NGT happened, rules n de-registraton of old diesel vehicles happened, and the market started swinging away from diesel. Diesel is still desired for both big and small cars, thanks to its better fuel economy and cheaper fuel costs. This mindset is now changing though.
With the government putting more emphasis to ways to curb pollution, diesel vehicles are not so much in demand anymore. Come 2020, it is possible that the vast majority of small diesel engines might just vanish. That should worry you, as it means a diesel car you buy today might lose a lot of resale value. But what would happen by 2020?
Tougher emission laws
In 2020, the government is all set to introduce new regulations for emissions. India currently follows BS-4 rating, but not throughout the country. There are still smaller towns and villages where you can buy BS-3 vehicles. The government wants to skip BS-5 now and go directly to BS-6. This will require a lot of investment from not only the vehicle manufacturers, but also the fuel companies since our fuel quality needs to be improved for it to be used in such engines. This will increase the cost of diesel vehicles by close to a lakh or so.
While the tweaks in petrol powered cars are easy (ECU calibration change which won’t really increase the cost of the car by much), those on the diesel vehicles are more complex. These norms will require addition of a DPF (diesel particulate filter) and a SCR (selective catalytic reduction technology). A DPF is a cylindrical object that is placed in the exhaust of the vehicle and is used to reduce the soot that comes out from the exhaust chamber. It requires space near the exhaust manifold due to the high temperature it operates at. This is a major concern in India. Since small diesel engines are fitted into small cars, the fit is very tight. Introducing a DPF will require redesign and more space in the engine compartment, which could make the car bigger, and hence out of the sub 4-meter bracket.
The SCR on the other hand reduces the oxides of nitrogen coming out of the tail pipe. This is done by injecting urea solution into the exhaust. This requires a storage tank and a feeding system. Also, this urea needs to be re-filled by the driver since it is a consumable product. In addition to both of them, a lot of tuning will have to be done for them to work together in sync. BS-5 norms would have required DPF and BS-6 would need SCR, but since both are coming up together, integrating both to a vehicle with neither will be challenging.
In an interview to ET auto, RC Bhargava, Chairman at Maruti Suzuki said that the demand for diesel vehicles is going to dye down by 2020. He goes on to say that since the cost of these new technologies will have to be borne by the consumer, expect small diesel vehicles to become close to a lakh more expensive. This means that the already big price difference between petrol and diesel vehicles will just extend even more and it will not be feasible to sell small diesel vehicles at such a high price, which will result in the killing of such products.
Popular diesel small cars to suffer
The cars that will suffer the most are the Celerio diesel, Tiago diesel and even the Grand i10 diesel.
If the price of such vehicles goes up by Rs 1 lakh, the price difference between the petrol and the diesel version will be close to Rs 2 lakhs, which will make it illogical to introduce the diesel powered vehicle. Since all companies are going to face the same issue, no one will be left out.
The way forward
In our opinion, the way forward is turbo petrols or hybrids. Tata is working on a turbo petrol for the Tiago, Ford already has a turbo petrol (ecoboost, 1.0 liter), VW too has one globally and is in the process of testing the 1.0 liter TSi in India, Maruti will soon introduce the 1.0 liter turbo petrol in the Baleno.