Maruti Warns Small Cars Could Exit Market if ‘Unscientific’ CAFE Targets aren’t Eased

In a move that may further intensify the divide in the automobile industry over the upcoming vehicle emission norms, Maruti Suzuki, India’s largest carmaker, termed the emission targets proposed in the draft CAFE 3 norms as “unscientific” for small cars.
It argued that the concessions proposed are essential, and warned that “some of the cars may have to move out of the market” if those relaxations are removed.

“No car in the world can meet those unscientific targets even by a distance. The problem is not in the cars. The problem is in the targets,” said Maruti’s Executive Director of Corporate Affairs, Rahul Bharti, while addressing a virtual press conference on the company’s November sales.

Bharti said that it would be difficult for small cars to meet the stringent targets proposed in the draft norms without emission relaxation, arguing that many other countries like the US, Europe, Japan, and Korea have also made such arrangements for the category.

“If the whole world is doing it, there must be some wisdom that these policymakers are following,” Bharti said.

Maruti’s comments come after Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles and President of industry body SIAM, recently criticized the weight-based relaxation as “arbitrary” under the revised draft CAFE norms released by the Bureau of Energy Efficiency (BEE) in September.

The revised draft of the emission norms, which are to be implemented from 2027 to 2032, mandates fleet emissions to be reduced to 91.7 grams of CO2 per km. However, the latest draft has also proposed a CO2 concession of 3 g/km for every reporting year for cars weighing under 909 kg with up to a 1200cc engine and 4-meter length. The concession is limited to a total of 9 g/km.

This came as a relief for Maruti, which is the largest player in the segment with models like Alto, S-Presso, Celerio, and Ignis.

According to media reports, SIAM had recently communicated to the BEE that its members could not come to a consensus on the issue of emission relaxations for small cars.

In a post-earnings media call in November, Tata Motors’ Chandra said that weight-based exemptions would undermine vehicle safety. He said that cars weighing under 909 kg were not BNCAP rated. However, Maruti’s Bharti countered this, highlighting the six-airbag standard it follows across trims and segments, unlike other OEMs that offer such safety features only in higher trims.

Bharti also argued that allowing relaxation for a particular category would not undermine the industry’s transition toward cleaner vehicles. He claimed that the company was being extremely responsible with its new models in terms of CO2 emissions, unlike the “gas guzzlers” in the market. He said that its latest offering, Victoris, has CO2 emissions 20–35% lower than competitive models in the same weight category.

“I would have been much prouder if people took a national view instead of their immediate company’s view,” Bharti said. However, he added that there was “good convergence” within the industry on the rest of the parameters of the CAFE norms.

Industry records robust sales in November

Carmakers reported strong growth in the month of November as GST reforms and festive demand in the market continued to support the industry.

Maruti Suzuki reported an increase of 26% in total sales at 2,29,021 units, including exports, in November. The company’s total domestic passenger vehicle dispatches to dealers stood at 1,70,971 units, posting a rise of 21%, while its exports rose.

Hyundai, on the other hand, reported a 4.3% increase in domestic sales year-on-year in November. The company sold 50,340 units in the domestic market and exported 16,500 units. The company’s Whole-time Director and Chief Operating Officer Tarun Garg said that the growth was supported by the GST 2.0 reforms.

SUV-focused Mahindra & Mahindra saw its domestic PV dispatches rise to 56,336 units in November, recording a growth of 22% year-on-year.

Tata Motors Passenger Vehicles also reported a dispatch of 57,436 vehicles, with a growth of 22% compared to 47,063 units sold during the same month last year.