Exclusive: Maruti in top gear before BS6 dateline, hopes to score big in 2020

At a time when many auto manufacturers are wiping brows over their respective stockpiles of BS4 vehicles, Maruti Suzuki is placed well to embrace the transition to BS6 fuel-compatible vehicles. With as many as eight launches in 2019 keeping the April 2020 dateline for BS6 in mind, the country's largest automaker is hoping to keep the momentum going and going strong.

In an interview with HT Auto on the sidelines of HT Brand Studio Live, Shashank Srivastava - Excecutive Director at Maruti Suzuki - elaborated about how the transition is hardly a speed bump for the company and that the product portfolio remains robust. I think the transition from BS4 to BS6 will become extremely critical, especially when you look at diesel vehicles where many manufacturers have said they won't be transitioning to BS6 diesel at all," he said. "We have already introduced eight of our models which are BS6. We in fact introduced the Alto and the Baleno in April 2019, almost a year in advance. Subsequently the WagonR, the Swift, Dzire, Ertiga, XL 6 and the S-Presso. Now these models are not small selling models. They cover almost 70% of our sales in petrol."

File photo: Kenichi Ayukawa, Managing Director and CEO at Maruti Suzuki India, along with Shashank Srivastava, Executive Director, Sales and Marketing, Maruti Suzuki India, during the launch of Maruti Suzuki S-Presso, in New Delh (PTI Photo)

Avoiding fire sales

Srivastava said that Maruti Suzuki's push towards BS6 vehicles has helped the company keep BS4 stocks in check and that massive discounts to clear old stock may not be required at all. "Our strategy has been to introduce it (BS6-complaint cars) earlier and keep pushing and monitoring the stock of BS4 vehicles so that when the transition does come, we don't have to necessarily go for a fire sale which we saw when there was this transition in two-wheelers and trucks," he said.

Diesel in the dumps?

That Maruti is determined to veen away from diesel has also been evident over the past several months. Srivastava said that a number of factors have contributed to this shift in strategy. "We will be moving out of diesel because cost of conversion from BS4 to BS6 (in diesel) is extremely high," he said. "While we move away from diesel for gasoline vehicles, it is only possible to introduce BS6 vehicles earlier (than the April deadline) in gasoline. It is not possible in diesel because if you have a BS6 diesel (vehicle) and only BS4 fuel available, it doesn't work. However, in gasoline, it is fuel agnostic which means that a BS4 gasoline (vehicle) can work on BS6 fuel and BS6 gasoline vehicle can work on BS4 (fuel). So that has been our basic thrust."

Technological and cost challenges aside, Srivastava says that even consumers have shown the maturity to embrace cars with cleaner fuel systems. " Let me tell you that BS6 has been very well received. One of the things that our analysts have been saying is that this (move to BS6) entails an increase in prices, which we have done, even in petrol vehicles. There was always this risk that consumers reject it because a cheaper BS4 is available. But what we have found is that consumers have liked BS6, the concept and are preferring the BS6 vehicles," he said. "(Also) I think for most vehicles, especially the smaller cars, consumers - who are very sensitive to price -will probably not prefer diesel at all."

This may well be why Maruti Suzuki is lining up the Vitara Brezza petrol as its next big-ticket launch. The Brezza has been a volume player for the company in the sub-compact segment but has been hurting in recent times due to its diesel-only avatar. Competition from Hyundai Creta, Kia Seltos and MG Hector - cars a segment above but with petrol options - has not been forgiving either.