Maruti Suzuki has taken a sharp public stand on the draft CAFE (Corporate Average Fuel Economy) norms, suggesting that India’s entry-level cars could face an uncertain future if the proposed relaxation for lightweight petrol models is withdrawn. The comments came during a media interaction on December 2, signalling rising tension within the auto industry over the direction of fuel-efficiency policy.
The draft norms introduce a small but crucial cushion for compact cars. Petrol vehicles under 909 kg, with engines up to 1,200 cc and no longer than 4 metres, may claim an additional 3 g CO₂/km reduction in their declared emissions. This effectively eases the compliance load for the smallest cars on Indian roads.
Maruti claims this relief is essential for the survival of an entire segment. Rahul Bharti, senior executive director at Maruti Suzuki India, said that without this allowance, the targets risk becoming “unscientific”, pushing manufacturers to discontinue small cars that already emit relatively low levels of carbon.
His argument points to the regulatory templates used worldwide. From Japan and China to Europe and the US, fuel-economy rules generally factor in vehicle weight. India’s draft norms, he suggested, must not set “globally unachievable” expectations.
While the weight-based relaxation clearly helps Maruti more than others, most automakers are reportedly opposed to it, arguing that it benefits just one company. Bharti, however, dismissed talk of a divide. He said the real disagreement is only around extending relief to small cars, and that a broader “nationalistic view” would have been preferable.
The tension comes at a time when small cars—once the backbone of the Indian passenger vehicle market—have shrunk to about 20–22% of sales, according to the Federation of Automobile Dealers Associations. The surge in SUVs has carried the industry forward, often at the cost of hatchbacks.
Maruti maintains that small cars did not lose ground because buyers suddenly upgraded to SUVs. The company insists the segment compressed because entry-level cars became too expensive for price-sensitive households.
This shift has wider implications. For millions of families moving up from two-wheelers, hatchbacks remain the natural next step. If small cars thin out or disappear, the affordability bridge between two-wheelers and four-wheelers becomes harder to cross. That could slow the pace at which new buyers enter the car market — a worrying prospect for an industry that grows only when more people join in.
Small cars saw a bit of relief recently after the GST cut made them more accessible again. Maruti reported a 40% year-on-year jump in hatchback bookings in November, while retail sales grew 37%.
The company fears this revival could be short-lived. Without the relaxation in the CAFE norms, Maruti argues, small cars may again become unviable. “If relaxation is not given, no car in the world can meet these unscientific targets even by a distance,” Bharti said.
As the government finalises the norms, the future of India’s entry-level car segment hangs in the balance — and with it, the affordability ladder that millions rely on.
