Tata Motors to roll out CNG cars in FY21, to cut dependence on diesel vehicles

New Delhi | Updated: Jun 05, 2019 7:01 AM

To gradually reduce its dependence on diesel vehicles, which are tipped to become costlier once BS-VI norms come into force

Tata Motors cars, Tata Motors CNG cars, CNG cars 2021,

By Pritish Raj

Tata Motors will start rolling out CNG cars in FY21, gradually reducing its dependence on diesel vehicles, which are tipped to become costlier once the BS-VI emission norms come into force, persons familiar with the development said. Government rules say starting April 1, 2020, all new vehicles must be fitted with BS-VI engines.

Mayank Pareek, president, (passenger vehicles), Tata Motors, told FE the gameplan was to replace diesel vehicles with CNG in whichever segments the impact was felt. “This is hitherto an unexploited area in India and we have chalked out a detailed strategy,” Pareek said, adding, “We’re making our own CNG kits and we’re expecting to fit these in almost all models in our portfolio”.

Tata Motors has not yet decided whether it will altogether drop diesel variants of its models like the Tiago, Tigor and Zest. However, Pareek indicated the substantial difference in the prices of petrol

and diesel variants as also the narrowing price gap between the fuels would make it less viable to manufacture smaller diesel cars.
Other products like the compact SUV Nexon and the recently-launched SUV Harrier come with bigger powertrains and their engines will be upgraded to meet the new emission norms.

Pareek believes that while BS-VI norms will have an immediate impact on small diesel cars, the corporate average fuel efficiency (CAFE) norms will further hit demand across segments as prices will rise substantially. The CAFE norms currently require cars to 10% fuel efficienct; from 2022, however, cars would need to be 30% or more fuel efficient and less polluting.

“When CAFE norms come into force the prices will go up further and by then diesel cars could be completely out of reach for consumers. Nobody wants to stop manufacturing anything, it’s the customer who stops buying,” Pareek said.

With diesel cars set to become costlier from 2020 automakers are debating the future of such vehicles. The high costs involved in upgrading cars, especially those with smaller engines might not justify the expense given the demand for entry- and mid-size diesel models remains muted. Maruti Suzuki has already decided not to make diesel cars from April 1, 2020. Currently, Tata Motors does not offer company-fitted CNG kits for any of its passenger vehicle models but it is readying these.

The automaker’s decision to move to CNG-powered cars comes against the backdrop of government’s resolve to set up a 10,000-strong CNG station network across the country by 2028. Pareek believes the government should be able to achieve this target. “We too need to be ready to service customers’ needs. Today, we have CNG stations in 14-16 cities but soon we could see them in say 200 cities,” Pareek said.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Q3 results: Reliance Jio beats estimates, net profit rises 16% at Rs 3,489 crore
2Asset quality improves: Yes Bank reports Rs 151-crore profit on strong interest income
3RBI proposes 4-layered framework for regulation of shadow banks