Maruti Suzuki eyes half a million CNG vehicles in FY23

The company has firmed up plans to produce 600,000 CNG vehicles in FY23 – which is more than half of a million CNG vehicles it has sold in the local market cumulatively in the last two decades. The company clocked the milestone of registering cumulative sales of 1 million CNG vehicles Tuesday.

Maruti Suzuki Chairman R C Bhargava told ET that until electric vehicles become mainstream, it is important to look at alternative fuels to reduce carbon emissions. “CNG emits 20% less CO2 than petrol. In fact, bio CNG is carbon negative. Lower prices (of CNG) make it a very good option, especially for small car buyers”, said Bhargava, adding more effort should be made to produce bio CNG in India.

In the current fiscal year itself, Maruti Suzuki expects CNG sales to expand nearly 50% to 235,000-240,000 units. The company has pending orders for an additional 115,000 units.

Automakers cite wider availability of CNG, lower running costs of vehicles powered by the fuel and increased product options as major reasons behind the growth in the category. Bhargava concurred: “With the government supporting the establishment of an increasing number of CNG distribution stations, consumer acceptability of the fuel has risen. Now, there are no long queues at CNG pumps, which was a hindrance earlier. Running costs are lower, there are more options for customers. Wherever CNG is available, consumers are buying it.”

Maruti Suzuki has nine CNG-powered vehicles – Alto, S-Presso, Celerio, WagonR, Ertiga, Eeco, Dzire, and Super Carry – in its portfolio. It has plans to make the fuel option available on more vehicles in the future. In January, Tata Motors Managing Director (passenger vehicles business unit) Shailesh Chandra said the company will study consumer preference for CNG across models in its portfolio. The company expects to receive a third of its small car sales from vehicles factory-fitted with CNG fuel kits.

The premium paid on the acquisition cost of a CNG vehicle at Rs 80,000-90,000 is lower compared to Rs 125,000-150,000 for diesel vehicles. Additionally, running costs of CNG vehicles at Rs 1.50 per km is less than half of Rs 3.5-4.5 for petrol/diesel vehicles in Delhi.

Already, the share of CNG in Maruti Suzuki’s overall sales stands at 16%. For models which come with the CNG option, the penetration is even higher at 32%. In markets such as Delhi, Mumbai and Pune where the fuel is readily available, CNG penetration stands at around 70% in models offering the option. The company’s chief technical officer C V Raman said: “A lot of work is on in localising and democratising the technology”.

The penetration of CNG in the industry currently stands at 8.5% compared with 17-18% for diesel vehicles.

Earlier in August 2021 at the 61st Annual Convention of Society of Indian Automobile Manufacturers (SIAM), Road Transport Minister Nitin Gadkari had told stakeholders in the local automotive industry to discourage sales of diesel vehicles and instead focus on promoting those powered by alternative fuels to cut down crude imports.

As many as 3,700 CNG distribution outlets are operational across the country, compared with 1,400 outlets 3-4 years back. In a bid to push adoption of CNG vehicles in the personal mobility space, the petroleum and natural gas ministry itself had in 2019 announced plans to set up 10,000 CNG distribution outlets in 10 years. It is estimated that the country will save nearly Rs 2 lakh crore in oil imports if personal car users switched to CNG vehicles.