Thierry Bollore, chief executive officer of Renault SA. (Bloomberg)
Thierry Bollore, chief executive officer of Renault SA. (Bloomberg)

Renault pulls the plug on diesel in India, to focus on petrol vehicles

  • The French firm is the second carmaker in the country after Maruti to discontinue selling diesel vehicles
  • CEO Thierry Bolloré says share of diesel vehicles is reducing as a percentage of firm’s overall sales

NEW DELHI : French auto maker Groupe Renault will stop offering diesel engine options on new vehicles in India, the company’s chief executive officer Thierry Bolloré said on Wednesday.

To begin with, Renault’s latest product, the Triber multi-purpose vehicle, will only be available with a petrol engine when it goes on sale in the next couple of months.

“Today, there is a clear regulatory approach saying that diesel is not anymore welcome. Even the gasoline ICE (internal combustion engines) are not welcome in Europe in the future. The regulation is designed to push the car industry forward to electric vehicles and other electrified power trains. As a consequence, we have decided to limit the development of powertrains in diesel. Even light commercial vehicles very quickly will be electric vehicle oriented. Triber also has no diesel engine," Bolore said on the sidelines of the unveiling of the new model.

Bolloré did not specify on the future of Renault’s Duster, Lodgy and Captur vehicle models which are offered with diesel engines in India.

Renault will become the second carmaker in the country to discontinue selling diesel vehicles. Market leader Maruti Suzuki India Ltd earlier announced its decision to stop selling diesel vehicles from 1 April 2020, coinciding with the introduction of new emission norms.

Renault’s local unit will become the first mass market automobile manufacturer in India to launch a product in the utility vehicle (UV) segment without a diesel engine. Customers in the segment are still inclined towards diesel engines due to factors such as more fuel-efficiency than petrol vehicles. Diesel vehicles currently comprise about 80% of total sales in the segment.

Overall, diesel vehicles make up about 40% of passenger vehicles sold in the domestic market.

Bolloré said the share of diesel vehicles is reducing as a percentage of Renault’s overall sales. In Europe, since 2012, there has been a regular decline in the share of diesel vehicles, which gained speed after 2015.

India will introduce the strictest Bharat Stage VI emission norms from next April. The norms, which are similar to Euro 6, are expected to make diesel engines costlier by 2 lakh to 2.5 lakh compared to petrol ones. Also, from 2022, vehicle manufacturers will have to adhere to the second phase of the Corporate Average Fuel Efficiency (CAFE) norms and in 2023, the real time emission test will also be introduced.

These regulatory changes will not only make diesel vehicles more expensive but companies producing diesel vehicles are also expected to have tough time limiting greenhouse gas emissions.

“The reality is that we have very flexible lines (assembly). So, we could in the past use our diesel line to manufacture gasoline engines. We have invested enough and could push our diesel lines to continue manufacturing gasoline. We did not have to change our production lines and just had to adapt them, which needed some money but not some unacceptable amount of money," Bolloré said.

The Triber, which was unveiled on Wednesday, is aimed at recovering market share Renault lost to rivals over the last couple of years. Renault’s small car Kwid and sport-utility vehicle Duster did manage to make significant inroads in the domestic market but lack of new launches and subdued response to its last product Captur SUV led to a sharp drop in sales.

Bolloré said the company has made mistakes in the past but the fact that India will be the third largest auto market in the near future is a good enough reason for the company to keep investing in the country. He expects Renault India to double its vehicle sales by 2022.

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