Maruti Suzuki Chairman's Concerns on CAFE 3 Norms

Maruti Suzuki Chairman expressed concerns regarding the proposed Corporate Average Fuel Efficiency (CAFE) 3 norms, arguing that they favor larger vehicles despite the environmental benefits of small cars.

Overview of CAFE Norms

• CAFE norms are government-mandated fuel consumption standards.
• They require auto manufacturers to meet fleet-wide average carbon dioxide emission targets based on vehicle weight and sales volume.
• The norms aim to reduce oil imports and carbon emissions from road transport.

Chairman's Perspective

• He claims the norms are modeled on the European car market, where small car sales have declined due to high prices.
• He argues that the rules favor bigger cars, despite smaller cars emitting fewer emissions per passenger, using less material, and consuming less fuel.
• He stresses the need for differentiation, given India’s unique transportation requirements.
• Two-thirds of the population relies on scooters and motorcycles; hence, small cars are a logical, safe, comfortable, and affordable means of mobility.
• He criticizes rival automakers for a self-serving approach, urging the government to prioritize national interest.

Industry Concerns and Projections

• CAFE 3 norms mandate a one-third reduction in average vehicle emissions by April 1, 2027.
• Automakers like Tata Motors, Mahindra & Mahindra, and Toyota Kirloskar have voiced concerns, particularly about potential relaxation for small cars.
• The Society of Indian Automobile Manufacturers warns stricter regulations could significantly raise vehicle prices.
• While the industry saw robust growth in the past two years, projections for FY26 estimate only a 1–4 percent increase.

Conclusion

The Chairman's comments highlight a significant debate within the automobile industry regarding the balance between regulatory standards and market needs, emphasizing the importance of considering India's specific transportation dynamics.