It may be that small cars in the country relaxed the rules of fuel efficiency. A report by Reuters quoted the industry and government sources as saying that the government is considering such a step. Actually, such a possibility is being seen after the demand raised by Maruti Suzuki India. Due to the increasing demand for SUV, the sales of small cars have declined and it is becoming a demand for times to take steps to save their existence.
Currently, India’s corporate average fuel Efficiency (CAEFE) regulations have been linked to the weight of cars, for all cars below 3500 kg weighing less than 3500 kg. According to Reuters, sources say that under the proposed change, the limit of emissions for cars weighing less than 1,000 kg will be given relief. However, exact details have not been detected yet.
Why small cars are important for Maruti
Maruti’s concern about small cars is also justified because small cars have been a big hand in the success of the company in the country. It has been a large part of small cars in its total sales. But now there is a decline in demand for small trains like Alto and Wagon-R. Due to this, the contribution of these cars to the total sales of Maruti Suzuki was less than 50% in the last financial year 2024-25. It was about two-thirds of it two years ago. In FY 2025, the company sold 17 lakh vehicles. According to Reuters, a senior government official says that the Indian government is also concerned about the declining sales of cheap and small cars.
Maruti recently argued that if the sales of small cars continue to decline, the overall growth of the passenger vehicle market would be affected. Therefore, more favorable fuel emissions are needed for small cars. The official says that small cars should benefit more. Maruti is demanding such and we agree with it. Currently, companies have to sell a certain percentage of electric vehicles mainly to avoid penalty under existing rules.
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Maruti benefits the most from relaxation of rules
The relaxation of rules for small cars will mean that the pressure to make them electric will be reduced. This will benefit companies with most small cars in the portfolio. Talking about Maruti Suzuki India, 10 of its 17 car models are less than 1,000 kg. If the government relaxes small cars to fuel efficiency rules, then the company can benefit the most. Other companies like Hyundai Motor, JSW MG Motor, Reno and Toyota Motor are also in the market.
