Maruti Suzuki has 1.29 lakh CNG cars waiting to be delivered

Maruti Suzuki’s order book has been seeing a steady rise, and interestingly, over 40 percent of it is for the CNG-powered models, accounting for 1,29,000 units out of the 3,25,000 pending orders. Shashank Srivastava, senior ED, Marketing & Sales, MSIL said, “CNG is doing very good numbers for MSIL, and almost 17 percent of our portfolio’s sales are being contributed by CNG variants. In the models, where we have a CNG option, the contribution is about 33 percent.”

Maruti Suzuki offers CNG options on nine of its 15 models. In FY22, the brand’s CNG sales increased 44 percent, from 1,62,000 units sold in the previous fiscal to 2,64,000 units, with the Wagon R and Ertiga contributing a major portion. Maruti Suzuki also offers CNG on the Alto, S-Presso, Celerio, Eeco and Dzire for individual buyers, and the Tour M and Tour H3 for fleet customers. Demand for CNG has witnessed a spike for India’s largest carmaker in the last couple of years primarily because of its complete exit from the diesel segment in April 2020 and demand for more affordable options given the high prices of fuel.

Maruti Suzuki’s CNG sales have grown from 76,000 units in FY18 to 1,05,000 units in FY19, 1,06,000 units in FY20 and 1,16,000 units in FY21. Diesel used to account for about 22 percent of MSIL’s cumulative sales, but the company says demand will gradually taper off as emission norms become even tighter. “Diesel has dropped from contributing 58 percent of the total industry PV volumes about five to six years ago, to 18 percent in FY22. For Maruti Suzuki, CNG is filling that gap rather quickly, despite it being available only in nine Maruti models,” Srivastava added.

Going forward, Maruti Suzuki plans to offer CNG in more premium offerings such as the Baleno and Ciaz, which retail from its premium Nexa outlets. This is because “running costs are extremely important even in at the higher end of the spectrum”.

Rising prices worrying customers

However, while the trigger for customers to switch towards CNG was the low fuel cost as well as higher fuel efficiency, recent hikes in CNG have got buyers concerned. According to Delhi-based MK Kumar, buying a CNG-equipped car made absolute sense in December 2021, when he purchased a Wagon R CNG, but CNG prices today have toppled the math.

CNG prices in the national capital have registered a 35 percent increase since December 2021, when they hovered around the Rs 53 mark, and now retail at Rs 71.61/kg, a significant 35 percent increase. Mumbai saw CNG prices go up by Rs 4/kg taking the retail cost to Rs 76/kg.

While Kumar’s 800-odd kilometre monthly run has him wondering if CNG was the answer over petrol by paying an almost Rs 1,00,000 premium, the fact that “the calculation, even at over Rs 70/kg, is in favour of CNG as the cost of running a CNG vehicle comes down to roughly Rs 1.90/km, compared to Rs 5.20/km for a petrol or diesel." Hence, “there’s still a substantial difference”, says Srivastava. “As long as there is high differential between CNG prices and petrol, the demand for CNG should remain strong. However, we have to see how this gap in prices moves,” he added.

Maruti Suzuki is also seeing a significant uptick in sales of its CNG cars in South Indian cities such as Bengaluru where the offtake used to be poor, “but the growing number of CNG pumps is boosting demand,” according to Srivastava. “We expect CNG trims to contribute even further to our sales, provided the supply side allows for an uninterrupted production of these vehicles,” Srivastava signed off.

Upcoming Maruti Suzuki SUVs, cars: 2022 and beyond

Maruti Suzuki has introduced multiple models in the last few months and still has some major launches lined up for this year. Next up will be an all-new Brezza SUV that will hit the showrooms by late June. Additionally an all-new Creta-sized midsize SUV, co-developed with Toyota, will hit the showrooms by August-September. An all-new Alto is also in the works and that could see light of day by late 2022.

Also See:

2022 Maruti Suzuki XL6 facelift: Tech review

2022 Maruti Suzuki Baleno review: More than meets the eye