India May Ease Fuel Efficiency Norms for Small Cars Amid Maruti Suzuki Lobbying
India May Ease Fuel Efficiency Norms for Small Cars Amid Maruti Suzuki Lobbying
India is reportedly evaluating a potential relaxation of fuel efficiency standards for small cars, following sustained lobbying by Maruti Suzuki, the country's top automaker. This move comes as the popularity of compact hatchbacks like Alto and Wagon-R declines in the face of rising SUV sales.
Once a cornerstone of Maruti’s dominance, small cars now contribute less than 50% of its 1.7 million unit annual sales—down from nearly 66% just two years ago.
A senior government official told Reuters,
“There should be more benefit for small cars. Maruti has been asking for that and we agree.”
India's Corporate Average Fuel Efficiency (CAFE) norms currently link CO₂ emission limits to vehicle weight for all cars under 3,500 kg. The proposed adjustment may ease CO₂ limits for vehicles under 1,000 kg, reducing pressure to electrify budget models and helping manufacturers with lighter vehicles in their lineup.
This would offer a strategic advantage to Maruti Suzuki, which has 10 out of 17 models weighing under 1,000 kg. Other automakers with small car offerings—like Hyundai, Toyota, Renault, and JSW MG Motor—may also benefit if the new norms take effect.
The Ministry of Heavy Industries has not officially commented, but in a closed-door meeting on June 17, officials reportedly discussed the proposed easing with carmakers such as Tata Motors, Mahindra & Mahindra, and Volkswagen.
Critics argue this move could create regulatory imbalance, giving Maruti an edge and deviating from earlier industry consensus. Nonetheless, some officials maintain that reviving demand for small cars is vital for sustaining growth in India’s passenger vehicle market.
Meanwhile, Suzuki, in its 2024 sustainability report, supported small cars as eco-friendly, citing lower emissions and reduced production resource requirements.
Although most automakers declined to comment, Renault’s India head expressed confidence that the industry's collective interest will be represented through official channels.
The debate continues over whether adjusting norms based on vehicle size or weight is the right path forward for a balanced and sustainable auto policy.