Maruti Suzuki hits back at CAFE row; what’s happening?
With CAFE 3 regulations set to benefit Maruti Suzuki due to its concessions for vehicles weighing under 909kg, with engines up to 1,200 cc and measuring no more than 4 metres in length. Here's a deep dive into what the effects are.
New Delhi: Maruti Suzuki India have issued a response today to the criticism they came under from rival carmaker on the draft Corporate Average Fuel Efficiency (CAFE) 3 standard. They felt that some of the makers of large SUVs with a higher carbon footprint were spreading baseless information about them.
At Maruti Suzuki’s monthly sales briefing, Rahul Bharti, Senior Executive Officer for Corporate Affairs, noted that there were incorrect facts and narratives being used against them, and they were a scapegoat in all of this. The remarks come at a time when the industry is debating the proposal of relaxation for small under CAFE 3 standard, which will come into force on April 1st 2027.
What is the main debate about from CAFE 3?
The draft noted that CAFE 3 will measure a carmaker’s fuel consumption and CO2 output based on their overall portfolio and not individual models. The Ministry of Power will check each brand’s target through the Bureau of Energy Efficiency (BEE), which will verify whether the fleet meets the annual limits.
Since heavier vehicles consume more fuel, the draft allows them a higher limit, while the lighter vehicles are expected to be more efficient. Lighter vehicles are obviously more efficient. The proposal includes electric vehicles (EVs), hybrids, flex-fuel models, CNG vehicles and certain fuel-saving tech as well, allowing cleaner models to count more in the final average.
The biggest debate is a proposed easing of rules for small petrol cars. The government proposes to tighten fleet-average CO2 emissions from 113 grams/km to 91.7 grams/kg. Vehicles weighing under 909kg, with engines up to 1,200 cc and measuring no more than 4 metres in length, could receive an extra CO2 reduction credit during compliance, capped at 9g/km per model. According to the draft, this allowance is suggested because such compact cars have little remaining room for meaningful efficiency gains.
How have brands reacted to the CAFE 3 norms
It has caused brands like Tata Motors, Mahindra & Mahindra, and JSW MG Motors to raise their concern about this. The justification just didn’t go down for those who have sent letters to the ministries involved. M&M asked for the deletion of all "special categories” based on size and weight, warning that such it could hinder the goal for safer and cleaner cars.
Hyundai Motors have debated that the segment-specific concession undermines the stability of policy and distorts investment and technology planning, and does not favour India’s credibility in the global market.
The biggest debate is that lighter cars are less safe, obviously. The likes of S-Presso and Ignis (which has been discontinued) failed miserably in Global NCAP ratings. While Dzire and other cars have improved the safety ratings, the CAFE norms is dividing the industry in two.
According to Bharti, only 3 per cent own cars, and they want to give the joy of mobility to the rest of the country. It is because of this that they are in support of the relaxations being a market leader. The recent GST revisions had brought the small car segment alive again, which had been stagnant for a long while. Maruti Suzuki have seen a 37 per cent y-o-y growth in November in retail sales of entry-level cars, which are the Alto K10, S-Presso, WagonR and Celerio. Bookings also spiked by 40 per cent in y-o-y in the month.
Tata Motors, of course, have their own concerns, which they have highlighted. CEO and MD of Tata Motors Passenger Vehicles, Shailesh Chandra, has said that the GST 2.0 reaffirmed the small car classification. Being the second largest producer of small cars in the country, 85 per cent of the sales come from them.
The concerns are not about meeting the levels, but the brand finds no justification in the rules being applied. The brand felt that anything to do with weight would conflict with the most imperative thing for the country, which is safety. Chandra noted that no car in the 909 kg category meets BNCAP regulations. Chandra felt that with market trends moving to sub-metre four space, the regulations have to give some relief to the sub-compact SUVs as well.
In terms of science, of course, a drop in weight by 10 per cent of course increases the fuel efficiency by 6-8 per cent, but that does affect safety. Maruti would argue that the safety norms of small cars are what are followed by the big cars, and the brand comes with six airbags across their lineup. The question remains if that is enough. In haste to fill garages with cars, we cannot have roads full of mangled cars.