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Green offensive: Maruti plans to offer more nameplates with CNG option

Moneycontrol logo Moneycontrol 25-06-2022 Rohit Vaid
Green offensive: Maruti plans to offer more nameplates with CNG option © Moneycontrol Green offensive: Maruti plans to offer more nameplates with CNG option

Rising demand for CNG-powered cars has prompted automobile major Maruti Suzuki India Ltd to offer more nameplates with the green fuel option.

According to the company’s Senior Executive Director for Marketing & Sales

Shashank Srivastava, the automaker plans to offer more nameplates with CNG options in the near future.

“CNG has really done well for us. The rise in the number of CNG pumps across the country is adding to further penetration of the segment,” he said. “We are prepared to introduce more options in CNG as and when the supply side situation improves.”

Presently, the company offers 15 vehicles in the domestic market out of which nine have CNG options. The automaker offers Alto, WagonR, Dzire, Ertiga, S-presso, Eeco, Celerio, Super carry and Tour S in CNG variants. On the other hand, Swift, Brezza, Ignis, Baleno, Ciaz, Xl6 and Super Carry come only in the petrol variant.

CNG-powered Brezza

It was widely expected that the automaker might bring out a CNG-powered Brezza in the market. Speculation is rife as this development touches upon the two key elements of the company’s focus — CNG vehicle expansion — and — enhancement of its SUV portfolio.

“We will bring out more CNG options of our current portfolio. I am not ruling out the possibility that a CNG option of Brezza or some other model (being) available soon,” he said.

Notably, last year the company sold around 1.14 lakh units of CNG vehicles. Besides, it has bookings for another 1.3 lakh units of CNG vehicles. Currently, the company commands the largest share of the domestic CNG market. Sales of these vehicles grew 48 per cent on year-on-year basis in FY22. Moreover, the market share of CNG and CNG plus petrol (dual fuel) vehicle is rising. Last year, CNG vehicles commanded around 20 per cent share of the overall sales. In the last 15-odd years, the company sold over a million CNG vehicles.

In terms of production, the company manufactures 25,000-30,000 units of CNG vehicles.

As per Federation of Automobile Dealers Associations of India (FADA) data, the overall market share of these vehicles grew by 2.76 per cent or 454,233 units in FY22 on a year-on-year basis. In FY21, it was 1.64 per cent or 251,387 units.

Low operating cost

One of the key reasons for the high pick-up of CNG variants is the lower operating cost. At present, CNG per kilogram on an average costs Rs 20 less than petrol per litre in New Delhi region. According to industry estimates, the average running cost of petrol cars is around Rs 5.25 per km. In contrast, running a CNG-fuelled car costs only one third of that amount. The cost, in fact, reduces with higher usage.

In addition, the increasing availability of CNG via pumps across the country has made these vehicles more attractive. On top of that, the ability to use both CNG and petrol (dual fuel) has become a key selling point. However, CNG fuelled models are costlier than the petrol versions; and in some cases the cost difference is more than Rs 70,000. Furthermore, the life cycle maintenance cost of a CNG vehicle is considered to be higher than petrol-fuelled models, as certain engine parts like spark plugs need greater upkeep in the former.

Another key trend seen in the company’s overall market strategy is focus on strengthening the SUV portfolio. This segment comprises 40 per cent of the overall domestic market. As of now, the automaker has 67 per cent market share of the non-SUV segment but at the overall levels it is still under 50 percent.

“To increase our overall market share to 50 percent, we need to strengthen our mid SUV segment,” Srivastava said. “We will launch new models catering to the SUV segment within one-two years.”

The company’s entry-level compact SUV Brezza, which has been in the market since 2016, has sold a total of 7.5 lakh units till date. Last year, it clocked sales of 1.15 lakh units. The company plans to launch the new Brezza by this month end.

Waiting period eases

Additionally, Srivastava cited that the waiting period for many vehicles will come down within the next few months. This has been made possible due to the ease in semiconductor supply situation and overall capacity utilisation reaching 95 per cent level.

On the downside, he pointed out that inflationary pressures, expensive fuel and rising interest rates might act as dampeners for sales.

“Inflation is still sticky and interest rates are rising…The overall economy needs to grow for the auto industry to pick up pace,” Srivastava said.

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