According to Reuters, the Indian government and industry sources revealed that India is considering relaxing fuel efficiency standards for small cars under the lobbying of Maruti Suzuki, the Indian subsidiary of Suzuki Motors. This move stems from the rapid growth of the Indian SUV market, which has led to a continuous decline in small car sales.
Image credit: Maruti Suzuki
As a dominant player in the Indian market, Maruti Suzuki has long relied on small car products to occupy market advantages. However, due to shrinking demand for small cars such as Alto and Wagon-R, Maruti Suzuki’s small car sales accounted for less than 50% of the company’s total sales from nearly two-thirds two years ago to less than 50% of the previous fiscal year (total sales reached 1.7 million units).
A senior Indian government official said the country was also concerned about the decline in sales of economy small cars. As the country’s largest automaker, Maruti Suzuki recently called on the Indian government to adjust its fuel emission standard policy, saying that the continued decline in small car sales will drag down the overall growth of the Indian passenger car market. “Stronger policy support measures should be introduced for small cars,” the official said. Maruti Suzuki continues to speak out on this, and we agree with this. This remark explains the core considerations behind the policy adjustment.
According to India’s current Average Corporate Fuel Efficiency Standard, the country allows carbon dioxide emissions caps based on weight for passenger cars weighing less than 3,500 kilograms (about 7,716 pounds). Three people familiar with the matter said that the new regulations will relax emission limits for vehicles weighing less than 1,000 kilograms, but the exact adjustment has not yet been announced.
In addition, according to current Indian regulations, automakers are required to sell a certain percentage of low-emission models, mainly electric vehicles, to meet the standards and avoid penalties. Industry insiders pointed out that the relaxation of emission restrictions for small cars means that this type of model will be relaxedelectrificationThe pressure is reduced, which will benefit manufacturers whose main products are small cars. Of the 17 models available at Maruti Suzuki, 10 have a weight of less than 1,000 kg, and the company is expected to be the biggest beneficiary.Other manufacturers selling small cars in India include Hyundai,JSW MGcars, Renault and Toyota, among others.
In response to the above reports, India’s Ministry of Heavy Industries has not yet responded to a request for comment. Maruti Suzuki also did not respond to an email request for comment, but its parent company Suzuki Motor emphasized in its 2024 sustainability report that small cars not only have lower emissions advantages, but also require less materials and energy in the production process, making them more environmentally friendly.
Tata Motors, Mahindra Corporation, Volkswagen Group, Hyundai Motor, JSW MG Motors and Toyota Motor also did not respond to requests for comment. Venkatram Mamillapalle, head of Renault India, said the company believes the Indian Automotive Industry Association will “represent the collective voice of the entire industry and ensure that all stakeholders benefit”.
In a closed-door meeting on June 17, India’s Ministry of Heavy Industry solicited opinions from a number of automakers, including Tata Motors, Mahindra and Volkswagen Group, to ask them if they agreed to give more flexibility to small cars in a new round of fuel efficiency standards to be implemented in April 2027, three people familiar with the matter said. Four people familiar with the matter said that although the relevant companies have not yet responded, any preferential treatment may be regarded as special care for Maruti Suzuki, which would be contrary to the previous consensus. It is reported that in the process of months-long policy negotiations between the Indian government and car companies, no plan to implement differentiated standards according to vehicle weight or size has never been proposed.
