Maruti loses edge as govt scraps small car concession in new fuel-emission norms: Why did the govt tweak the rules?
Maruti Suzuki is expected to bear the burden after the central government canceled the planned concession for small cars under the upcoming fuel efficiency rules. A draft published in September last year proposed tolerance for gasoline cars weighing 909 kg (2,004 lb) or less; This was a move seen as favorable to the automaker.
The company dominates India’s small car segment, controlling almost 95% of the market, prompting rival automakers including Tata Motors and Mahindra & Mahindra to flag the proposal as providing an unfair competitive advantage, according to the news agency. Reuters reported.
What do the new rules aim for?
Following the downturn in the industry, the Department of Energy removed that exemption and tightened other parameters, according to the latest 41-page draft reviewed by This has increased the pressure on all automakers to increase sales of electric and hybrid cars. Reuters.
The new rules limit excessive compensation for vehicle weight, aim to level the field between light and heavy fleet manufacturers, and are designed to deliver real-world efficiency gains, the document said.
They also initiated a “significantly steeper reduction path” for emissions, according to the agency report.
The new rules will apply for a five-year period from April 2027 and will be at the heart of automakers’ product and powertrain investment plans. However, it is not yet known when the rules will be finalized.
Why was the offer flagged?
Transportation is a major driver of oil imports and carbon emissions, as it accounts for approximately 12% of India’s energy use. Meanwhile, the document states that passenger vehicles account for approximately 90% of transportation-related emissions.
Corporate Average Fuel Efficiency norms set limits on how much carbon dioxide automakers are allowed to emit on average across all passenger vehicles they sell, as long as the vehicles weigh less than 3,500 kg. Simply put, they ensure that companies don’t sell cars that pollute too much.
These rules are updated every five years and aim to force automakers to produce cleaner vehicles such as electric cars, CNG models and flexible fuel vehicles.
The September draft would allow fuel consumption targets to rise faster with vehicle weight, making compliance easier for heavier automakers like Mahindra, Tata and Volkswagen, and tightening demands on lighter fleet players like Maruti. This imbalance led to the exemption, according to the agency’s report.
The revised plan reduces the extent to which heavier vehicles can reach easier targets. “Manufacturers with heavier fleets need to achieve stronger internal efficiency improvements,” the document said.
Under the new rules, companies will earn credits if they sell more EVs and plug-in hybrids, which will help offset higher emissions from gasoline or diesel models. Automakers would also be allowed to “pool” or combine their efficiency performance with other companies to meet targets.
Failure to comply with these rules will result in penalties of up to $550 per vehicle, which will be covered by the company.
