Maruti Suzuki Rock N Road: Redefining the SUV Experience
- Mar 16, 2024
- Views : 69028
The declaration of the ministry of road transport and highway’s intentions to bypass the BS-V emission norms and switch directly from BS-IV to BS-VI will entail additional costs for both automobile manufacturers and customers.
Automakers will be set back by an estimated Rs 36,500 crore in order to align their diesel offerings with this new technology, according to institutional broker Kotak Institutional Equities. However, it could prove to be a boon for India's largest carmaker Maruti Suzuki on the demand for alternative vehicles.
Manufacturers like utility vehicle maker Mahindra & Mahindra could be hit the most severely after the implementation of the BS-VI as its fleet is almost entirely made up of diesel vehicles
"We believe diesel passenger vehicles will need to be fitted with diesel particulate filter and selective catalyctic converter to meet the BS-VI requirements. This implies diesel passenger vehicles will become costlier by 20 per cent," said Hitesh Goel of Kotak Institutional Equities.
Prices of light commercial vehicles and trucks, which run on diesel, will become costlier by 13 per cent and 23 per cent respectively, according to Kotak's estimates.
Notwithstanding the concurrent transition costs to BS-VI, petrol and CNG vehicles, on the contrary, will get costlier by around only two per cent, according to Kotak. This would have an immediate positive impact for Maruti Suzuki, in terms of sales.
"Maruti Suzuki has a 60 per cent market share in petrol passenger vehicles and a 32 per cent market share in diesel passenger vehicles. We expect Maruti Suzuki to gain 500-basis point market share if the share of petrol vehicles in the passenger vehicle industry increases from 55 per cent currently to 70 per cent by fiscal year 2022," said Kotak.
Consumers may also have to pay more for petrol and diesel prices as refineries will have to spend around Rs 28,800 crore to upgrade existing refineries for producing auto fuels with specifications complying to the BS-VI norms.
"The refiners will require a premium of 30 paise per liter in auto fuels price to generate adequate returns on these investments," Kotak said.
Maruti Suzuki Rock N Road: Redefining the SUV Experience
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