Government considering easing CAFE norms for cars under 1,000kg

As a result of lobbying by Maruti Suzuki, the Indian government is reportedly considering easing fuel efficiency norms for small cars – defined as cars weighing less than 1,000kg. According to Reuters, industry and government sources have confirmed the development, with some stating that Maruti has approached the Central Government and that the Ministry of Heavy Industries (MHI) is mulling the proposal.

1. Maruti has lobbied for the easing of CAFE norms for cars under 1,000kg
2. Currently, all cars that weigh less than 3,500kg have the same standard

Maruti small cars will benefit from the easing of CAFE norms

Maruti sales in FY2025 increased by only 0.05 percent due to a decline in small car sales

While small cars have been the major driver of Maruti Suzuki’s sales in the past, the more affordable side of the market has seen a massive decline in sales in recent years. This has impacted Maruti’s sales – FY2025’s 17,60,767 units were just a 0.05 percent growth over FY2024’s 17,59,881 units – and has seen its market share decline steadily to 40.61 percent by the end of FY2025.

The Indian government seems to share Maruti Suzuki’s concerns about the declining sales of small, affordable cars. The proposal on the table is for CAFE (Corporate Average Fuel Efficiency) norms for small cars to be eased – currently, all cars that weigh less than 3,500kg have the same standard – in a phased manner.

Hyundai, Tata, Renault, and Honda among carmakers that could also benefit

At the moment, Maruti has 17 models on sale in India, of which 10 weigh less than 1,000kg – the Alto K10, Celerio, S-Presso, Wagon R, Baleno, Swift, Ignis, Fronx, Dzire, and Eeco. Other carmakers that would benefit from the easing of fuel efficiency norms for small cars are Hyundai (the Grand i10 Nios, Aura and Exter), Renault (Kwid and Triber), Tata Motors (Tiago), Toyota (Glanza and Taisor), Honda (Amaze), and Citroen (C3).

SOURCE: Reuters