Indian policymakers are considering easing fuel efficiency regulations for compact vehicles, specifically those under 1000 kg. This initiative is driven by discussions with Suzuki, who are facing a decline in sales of smaller models as consumer preferences shift towards SUVs. A government source indicated that there’s a push to provide greater incentives for manufacturers of small cars. The present Corporate Average Fuel Efficiency (CAFE) regulations tie the amount of permissible carbon dioxide emissions to vehicle weight for cars under 3,500 kg. The proposed changes would relax these restrictions for vehicles weighing less than 1,000 kg, allowing manufacturers to potentially avoid the pressure to sell a quota of low-emission, often electric, vehicles. If implemented, the relaxation would primarily benefit Suzuki, given that a majority of their current models fall within this weight category. Suzuki’s sustainability report from 2024 highlighted the environmental advantages of their smaller car offerings, noting both lower emissions and a reduced material footprint. The proposal was discussed in a closed-door meeting on June 17, with representatives from Tata Motors, Mahindra & Mahindra, and Volkswagen. Some sources express apprehension that these adjustments could give Maruti Suzuki an unfair advantage in the marketplace.
