Proposed Changes to Fuel Efficiency Norms Could Offer Relief to Small Car Manufacturers Like Suzuki

The Indian government is evaluating a potential revision to its fuel efficiency regulations, specifically targeting smaller vehicles under 1000 kg. This move comes in response to the changing dynamics of the automotive market, with rising SUV demand impacting sales of compact cars, particularly those from Suzuki. Government officials are considering providing more favorable terms for small car producers, addressing concerns about the shrinking market share of affordable models within the broader passenger vehicle segment. Current regulations tie permissible carbon dioxide emissions to vehicle weight for cars under 3,500 kg. The proposed modifications would potentially relax these limits for vehicles weighing less than 1,000 kg. This would lessen the requirement for manufacturers to sell a specific quota of low-emission vehicles, including electric vehicles. Suzuki, with a significant portion of its lineup falling under the 1,000 kg threshold, stands to benefit from such adjustments. In their 2024 sustainability report, Suzuki highlighted the environmental advantages of their smaller vehicles, including reduced emissions and resource consumption during production. A discussion regarding the proposed changes took place on June 17, with representatives from Tata Motors, Mahindra & Mahindra, and Volkswagen present. Concerns have been raised that such adjustments could offer an undue competitive advantage to Maruti Suzuki.