Buying A Small Car Soon? Fuel Norms May Change - Here’s What You Should Know
Small cars, which have long been a cornerstone of Maruti’s dominance in the Indian market, have seen their share of the company’s total sales drop below 50% in FY25, down from nearly two-thirds just two years ago. Models like the Alto and WagonR, once the company’s bestsellers, are now struggling to keep pace with changing consumer preference
India is considering a policy shift that could relax fuel efficiency norms for small cars, following concerns raised by the country's largest carmaker, Maruti Suzuki. The move comes amid a broader market shift towards sport utility vehicles (SUVs) and could have significant implications for the future of affordable mobility in India, according to an exclusive report by Reuters.
Small cars, which have long been a cornerstone of Maruti’s dominance in the Indian market, have seen their share of the company’s total sales drop below 50% in FY25, down from nearly two-thirds just two years ago. Models like the Alto and WagonR, once the company’s bestsellers, are now struggling to keep pace with changing consumer preferences.
A senior government official told Reuters that the Centre is aware of the declining sales trend and is sympathetic to the industry’s call for regulatory relief.
“There should be more benefit for small cars. Maruti has been asking for that, and we agree,” the official was quoted as saying.
CAFE Norms
Under current Corporate Average Fuel Efficiency (CAFE) norms, India links permissible CO₂ emissions to vehicle weight for all cars below 3,500 kg. Automakers are required to maintain a fleet-wide average, incentivising them to include more low-emission or electric vehicles in their lineups.
According to Reuters, the proposed change would ease these targets specifically for cars under 1,000 kg, thereby reducing compliance pressure on small carmakers and delaying the need to electrify these models.
The move would particularly benefit manufacturers like Maruti Suzuki, whose portfolio includes 10 models that fall below this weight threshold.
Other companies with small car offerings—such as Hyundai, JSW MG Motor, Toyota, and Renault—may also benefit.
While Maruti declined to comment on the report, its parent company, Suzuki Motor Corporation, noted in a recent sustainability report that small cars are environmentally efficient not only due to their lower emissions but also because they consume fewer raw materials and require less energy to produce.
Published By : Avishek Banerjee
Published On: 26 June 2025 at 18:45 IST