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Audi & VW to slam brakes on diesel car production under BS-VI norms

Maruti Suzuki India, Mahindra, Tata Motors, Toyota Kirloskar Motor, and Renault India have already stated they would pull the plug on smaller diesel variants

Pavan Lall  |  Mumbai 

Volkswagen
The Volkswagen Group took a call to merge three of its companies in India.

India, the firm which straddles between brands Audi and (VW), will cease to roll out diesel cars under BS-VI norms, for top-selling brands that include the Skoda, VW and Audi, sources familiar with the development said.

When contacted, officials at India said, “There has been a steady shift in customer preference towards petrol-powered vehicles. We will continue to invest and develop its efficient state-of-the-art range of TSI (petrol) engines. We would assess the changing consumer demand and continue to explore all possible engine and fuel options in line with BS-VI requirements.”

India, Mahindra, Tata Motors, Toyota Kirloskar Motor, and Renault India have already stated they would pull the plug on smaller diesel variants (those powered by 1.2-1.3-litre engines). This is due to the high cost of transition.

The move by India could be seen as a demonstration of its strategy and how it reads the market in the months to come, given that BS-VI norms are driving the tech strategies of carmakers. “The VW Group is also wary of it and would potentially aim to limit its exposure to the uncertain demand conditions in post-BS-VI regime,” said Suraj Ghosh, principal analyst (powertrain forecast), IHS Markit. “In its Vision 2.0 strategy, the VW Group is most likely to focus on petrol and electrified powertrain, which is cleaner and has far better image than diesel ones.”

Historically, diesel has been cheaper in India than petrol and found favour among buyers, especially fleet operators.

In recent times, studies and multiple reports have shown that diesel fumes are more toxic to the environment and human health than earlier thought. Actually, diesel engines emit several times more particulate matter than petrol engines.

After more than a decade in India, the Group took a call to merge three of its companies in India – Skoda India Auto, India, and Volkswagen Group Sales India – which sell all Volkswagen brand cars, including Audi and Porsche but not Skoda.

The merged entity is now led by Skoda, and its former boss Gurpratap Boparai has started to oversee the new entity, having been designated head of the Volkswagen group.

Despite all the challenges, the Indian market is still viewed as a promising one. “Also, given the recent success of new brands like MG and Kia, the ‘older’ global OEMs are re-vitalising their strategies. This time, they want to get it right,” Ghosh said.

First Published: Wed, March 18 2020. 22:27 IST