Tata Motors’ President: Bharat Stage 6 norms to make small diesel cars costly, sales to be affected

The President of Tata Motors’ passenger vehicles business, Mr. Mayank Pareek, has just noted that the upcoming Bharat Stage 6 (BS6) emission norms would make small cars with diesel engines a lot costlier. The higher cost, according to him could hit sales of small diesel cars, as most customers are likely to opt for petrol powered cars.

Here’s what he told ET,

The introduction of BS-VI will make the compliance expensive, particularly for small diesel cars. Given that these  high costs will ultimately have to be passed on to the end customer, the sale of diesel vehicles will logically see a  decline in the industry. We feel that low demand for the entry and mid-size diesel models will not justify the high  costs involved in developing a new small capacity engine. Around 80% of the demand in the entry and midsize segment is for the petrol variants and thus the additional investment required does not seem viable”

Mr. Pareek’s comments come at a time when the Chairman of Maruti Suzuki – India’s largest car maker – said that his company would stop producing diesel engined cars from April 2020, and would consider reintroducing diesel cars a few months/years later only if there’s adequate demand for them. With industry leader Maruti moving away from diesel engined cars, other automakers may follow suit if demand for diesel engined vehicles reduces drastically due to the higher costs involved.

For now, Tata Motors sells diesel engined variants of almost all its cars, even in the hatchback and compact sedan  segments. For instance, the automaker’s cheapest car – the Tiago hatchback – has a diesel engine option. The same is the case with the Tigor compact sedan, which shares its engines and platform with the Tiago. Moving up the model chain, the likes of the Tata Nexon compact SUV, the Zest compact sedan and the recently introduced Harrier SUV also have diesel engines on offer. Other Tata SUVs such as the Hexa and Safari Storme have traditionally been diesel-only models.

Come 2020, we could see Tata Motors continuing to offer diesel engines on bigger SUVs and also perhaps the Nexon compact SUV. Smaller sub-4 meter cars could dump the diesel engine for turbo petrol motors, and CNG/LPG options. Tata Motors is also betting big on electric cars. Both the Tiago and Tigor Electric Vehicles are likely to make their debuts in the Indian market for the general car buying public next year. All future cars from Tata Motors will be  developed with an electric option in mind.