Diesel Dilemma

Diesel Dilemma

Editor's Desk June 2019 Diesel Dilemma

Dear Readers,

With just about 40 weeks to go for the BS VI emission norms to kick in, the industry is clearly running against time to ensure it is ready on time. While most manufacturers have assured readiness much ahead of the deadline, recent developments have put diesel right at the centre of the debate, once again. This time, thanks to market leader Maruti Suzuki India’s decision to discontinue its entire portfolio of diesel vehicles, come April 1, 2020.

Maruti had been talking about the impact BS VI emission norms would have on diesel vehicles for some time, explaining how the increased cost of compliance with the upcoming standards will make small diesel cars unaffordable. But a decision to completely stop selling diesel vehicles in India has taken many by surprise, especially its many suppliers, while many others believe the carmaker’s decision is based on sound financial prudence.

It has always been clear that BS VI will push the market into a stronger petrol market. The demand for diesels in the Indian – as also in other global – markets has been on a decline for the last few years, particularly because of the narrowing of retail prices between petrol and diesel. The diesel emissions data scandal and the fuel’s reputation of being dirty haven’t quite helped diesel’s cause. Volkswagen, the largest automaker in the world, has stepped up production of petrol engines world over, as it continues to see demand for diesels fall.

Despite the impression around diesels, many other manufacturers and suppliers continue to be assured of diesel’s viability as a transportation fuel. New solutions have been found and released. Ultra-low sulphur diesel fuel with less than 15 ppm sulphur can have an immediate effect, experts say. Further, new clean diesel engines with the latest emission control technologies will lead to 98 % reductions in particulate emissions and similar reductions in nitrogen oxide emissions, say a few other experts.

At the same time, Maruti’s fiercest competitor in the market, Hyundai Motor India recently reassured its customers that the company would continue to innovate, develop and make diesel engines for the Indian market. No other OEMs, in fact, have announced their withdrawal or intent of withdrawing from selling diesel-powered variants, but clearly there are tremendous pressures at play. It may be too early to write an obituary for diesels in the country for smaller vehicles yet. But for diesel, the time clearly is ticking.

New Delhi, June 2019