A big controversy has arisen in India’s auto sector these days. The country’s leading car companies Hyundai, Tata Motors, Mahindra & Mahindra and JSW MG Motor have raised serious objections to the government’s proposal regarding the new fuel efficiency rules. These companies say that the exemption given to small and light vehicles in the new rules will benefit only one company, Maruti Suzuki, which may upset the balance of the entire industry. This is the reason why even before the new rule came into force, the auto sector has been divided into two camps.
What is the whole matter?
New rules for Corporate Average Fuel Efficiency (CAFE) are going to be implemented in India soon. It is proposed to reduce the average CO2 emission target of cars from 113 g/km to 91.7 g/km. These targets are easy for large SUVs, but will be much more difficult to meet for small petrol vehicles. Meanwhile, the government has proposed to provide some relief to cars weighing 909 kg or less, engine capacity up to 1200cc and length less than 4 meters. The government argues that the possibilities of increasing efficiency in small cars are limited, hence it is necessary to give exemption to them.
Why did Hyundai and Tata get angry?
According to a report, Hyundai, Tata Motors, Mahindra & Mahindra and JSW MG Motor have written a letter to the government saying that the weight-based discount benefits only one company. JSW MG Motor claims that 95% of the cars weighing less than 909 kg are manufactured only by Maruti Suzuki. Mahindra has warned that such a special category will not only upset the balance of the industry, but will also affect the country’s target of safe and cleaner cars. Hyundai has said that this move could set back India’s image at the international level, as the world is moving towards stricter emission standards. These companies allege that suddenly bringing such a rule will affect the future technology, investment and direction of electric vehicles.
Maruti Suzuki’s side
Maruti Suzuki says the small cars consume far less fuel and emit less CO2 than large SUVs. In such a situation, protecting them is beneficial for both the environment and the consumer. The company said that small cars are given relief in many countries of the world.
The decision on new rules is now stuck
The increasing tussle over new rules has increased uncertainty in the auto sector. Companies say that unless the rules are clear, they will not be able to decide their investment strategy in future cars, especially EVs.
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