The mid-range sports utility vehicle (SUV) space, the fastest growing segment in the country’s car market, is bracing for a technological face-off. The South Koreans currently dominate this space, with Hyundai Motor — India’s second largest carmaker — and its sister concern Kia Motor, between them, packing in multiple models that run on both diesel and petrol mills.
The Japanese counter, led by passenger vehicle (PV) market leader Maruti Suzuki India and Toyota Motor, is focused on a petrol-only strategy, riding purely on petrol-powered engines mated with hybrid systems. Two new Suzuki-Toyota SUVs, both powered by petrol engines with hybrid drive units, promise to deliver higher power and significantly better fuel economy to stay in the fight with the diesel options offered by the others.
Both the Maruti-Toyota SUVs — code named ‘D22’ for the Toyota version and ‘YFG’ for the Suzuki version — are likely off the blocks later this year and could take on the diesel advantage that the South Korean duo, and others like homegrown carmakers Mahindra & Mahindra and Tata Motors and the Europeans including Germany’s Volkswagen and it’s Czech sister concern Skoda alongside France’s Renault enjoy.
While the share of diesel engines in India’s PV segment has dropped from over 60 per cent in FY14 to around 16 per cent, the diesel option still accounts for 50 per cent of the sales in the SUV segment, where Maruti Suzuki and Toyota are intent on cancelling out the diesel advantage enjoyed by others with their petrol-hybrid offerings.
The Japanese strategy is focused on jettisoning the diesel option for this segment by overcoming the obvious advantages of the diesel mill through their focus on petrol engines combined with hybrid powertrains. What helps in this game plan is that Toyota is a global leader in hybrid technology, with Maruti Suzuki expected to pitch in with its supplier base to increase localization and thereby making the hybrid offerings more cost-effective.
The localization effort is being seen as a counter to the tax relief on hybrids, which Toyota has been lobbying hard for, albeit unsuccessfully so far. The bet is also that as the BS-VI emission norms get tighter, the diesel mill will progressively get even priced out.
Both the Japanese players are in the process of attempting to bring hybrids down from the pricier, more premium segments of the car market to lower down the price points.
For Maruti Suzuki, this comes at a time when it has seen its market share drop to around 43 per cent in FY22 from nearly 48 per cent in FY21, and well over 50 per cent in the previous two years. The plan to bring in multiple petrol-powered SUV products mated to hybrid powertrains in order to enhance fuel efficiency heralds the clear intent of not making a comeback in the diesel segment. The company is also focusing on increasing its play in the CNG segment to bring in additional volumes. Incidentally, in the non-SUV segment, Maruti Suzuki’s market share continues to be at over 65 per cent, with leadership positions in both the hatchback and MPV (multi-purpose vehicle) segments. The lack of products in the fast growing SUV segment, however, had impacted its overall market share.
The extent of reversal of the Maruti stance is evident from the fact that its two primary offerings in the SUV segment – the Vitara Brezza and the S-Cross – were only offered with diesel engines for over four years into their launch, without a petrol option . The automaker’s plan to wean away from diesel came after the new BS-VI emission norms were rolled out two years ago and the company has ruled out getting back into the diesel segment as it feels the sale of such vehicles would further come down with the onset of the next phase of emission norms in 2023 that would further jack up the cost of diesel vehicles.
Incidentally, carmakers such as the Koreans, alongside their diesel push, are also relying on “engine downsizing” in the petrol segment, with a turbocharged petrol engine option among the variants.
These engines use a turbine that is powered by the engine’s exhaust gas to force that extra compressed air into the combustion chamber, leading to more efficient combustion of the air-fuel mixture.
The result is these smaller turbocharged engines produce more power than a bigger engine, while consuming less fuel.
The primary difference between the petrol and diesel engines is that petrol engines use spark plugs to ignite the air-fuel mixture, while diesel engines rely on heavily compressed air without any spark plugs.
Diesel engines are thereby more efficient and use 15-20 per cent less fuel translating into lower running costs, and also boast of higher low-end torque that provides for a better driving experience with higher loads or on inclines, thereby making them the primary choice for SUVs.
However, they usually cost more than petrol vehicles as diesel technology is more expensive and their servicing and maintenance costs are higher.
A hybrid system typically comprises a petrol engine that is paired to an electric motor and a NiMH (Nickel-metal Hydride) battery pack that enables the vehicle to be driven on a pure electric mode for short distances. The battery pack is recharged by the engine or through regenerative braking. Cars with the hybrid system can be driven for stretches on electric power alone, using the internal combustion engine to top up the battery while running. With this hybrid set-up, the powertrain can deliver a 40-80 per cent jump in fuel efficiency over its non-electrified counterpart, thereby obviating an anxiety range typically associated with EVs. But this comes at a higher price, given that they incorporate the electric motor and battery pack, alongside the combustion engine. This hybrid system being by the Maruti Suzuki-Toyota combine would be similar to the one used in the recently unveiled Honda City e:HEV hybrid or the Toyota Camry, but will come in at a lower price point.
Alongside the hybrid powertrain partnership, Maruti Suzuki and Toyota are already working on a pure-play battery electric vehicle (EV). Suzuki Motor Corp, the parent of Maruti Suzuki, has said it would invest Rs 10,440 crore to build a new EV factory and a battery facility in India.
The announcement by Suzuki noted the first concrete commitment on electrification by Maruti, which has maintained that the Indian car market is not yet prepared for a mass shift towards BEVs (battery electric vehicles) and that the pace of development of the supporting infrastructure such as charging points is less than adequate.
Tata Motors and Hyundai Motor have taken a lead in this segment, with strong plans for an electrification of their product offering, at a time when passenger EVs have seen a sharp jump of well over 50 per cent in sales in 2020-21, albeit over a relatively small base.
While Maruti Suzuki has been treading speculatively on the EV track, there was an expectation that the EV version of the WagonR would have been the company’s first battery-electric model for India. A prototype of the WagonR EV was showcased in September 2018 and road testing of some 40-odd prototypes was also underway. But pricing seems to have been a deciding factor in the WagonR EV project being put on the backburner.
Instead, an SUV is being readied in partnership with Toyota, which with Suzuki has a global partnership agreement, and the product is targeted to hit the markets in three years from now. The vehicle is likely to be produced under both the Suzuki and Toyota badgings, with the Maruti Suzuki version reported to be codenamed ‘YY8’.