InvestorQ : Is it true that Maruti Suzuki is going to be betting in a big way CNG cars to diversify the risk of rising petrol and diesel prices?
Chandralekha Desai made post

Is it true that Maruti Suzuki is going to be betting in a big way CNG cars to diversify the risk of rising petrol and diesel prices?

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NISHA Nayak answered.
4 months ago
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The current hike in prices of petrol and diesel may have come as an opportunity for Maruti as it now expects sales of natural gas-powered cars to spurt by 59% in the coming fiscal. Maruti believes that more buyers are likely to embrace the greener fuel amidst soaring petrol prices and the easier availability of greener and less polluting fuel elements like compressed natural gas or CNG.

Maruti estimates that it would be able to sell around 2.70 lakh CNG vehicles in financial year 2021-22. That would be a sharp jump from the current level of 157,000 units that Maruti Suzuki will be selling for the financial year ending March 2021. Maruti hopes that things would become a lot more attractive if the government brings CNG under the GST Act to reduce the cost of the fuel for the consumers.

Maruti currently has 8 vehicles that are based on CNG fuel but it plans to convert more products with the CNG option. It may be recollected that Suzuki had stopped selling diesel-run vehicles in April 2020 and has since been pushing customers to opt for eco-friendly CNG vehicles In fact, in the first 10 months of the current fiscal, Maruti saw sales of CNG cars jump by 28% on a yoy basis.

For Maruti, the key is to build a larger portfolio of gas-powered vehicles as well as the right infrastructure in the form of wider network of CNG fuel pumps. This will convince more buyers to opt for CNG cars, which has till now been a largely taxi and cab affair. Of course, the challenge of limited number of fuel stations has made customers worried about the availability of gas beyond city limits.

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