Ford expect 8 to 10 per cent price increase in passenger vehicles following the implementation of BSVI regulations
With car manufacturers taking steps to meet upcoming BNVSAP crash standards and the stringent BSVI emission regulations are less than a year away from coming into effect, we are beginning to see changes in the industry. Maruti Suzuki announced phasing out diesel engines right before April 2020 BSVI deadline, as they are too expensive to build and no longer have a strong business case.
However, the 1.5-litre DDiS 225 diesel introduced in Ciaz made its way into Ertiga’s lineup yesterday and seeing the demand in the higher segments Maruti Suzuki might actually sell select diesel variants in the near future. In the midst of things, Ford India will continue to offer oil-burners in its domestic portfolio and the existing powertrains will be upgraded before BSVI regulations kick in.
Ford’s Executive Director, Marketing, Sales & Service for India, Vinay Raina told PTI that more than 65 per cent of the customers prefer purchasing diesel variants of the brand’s top-selling EcoSport compared to petrol. In contrary to Maruti Suzuki, which has had its petrol models’ sales increase substantially in the last few years, Ford sees the demand for diesel stay put and the trend is expected to continue into the coming years.
The increase in Maruti Suzuki’s petrol variant sales across different segments is due to the negative vibe persisting among buyers and the increase in diesel fuel price further exacerbated the issue. The largest automaker in the country extracts majority of its volume from the below Rs. 10 lakh segments as fuel economy would not be much affected in the small cars.
It is a different scenario for Ford though as EcoSport is the major sales driver for the American company. In cumulative sales of 2,56,496 units, the compact SUV contributed a huge share of 1,40,345 units in the last financial year. Raina expects the prices of passenger cars to increase by up to 10 per cent as manufacturers will obviously pass on the costs involved in upgrading engines to meet BSVI compliance to the customers.
Ford could expand the CNG alternative fuel if demand exists. The brand has partnered with Mahindra to co-develop a mid-size SUV and it will have plenty in common with the next generation XUV500 amidst not being a badge engineering job. Mahindra will also supply low displacement petrol powertrain to Ford from next year onwards.