Maruti’s Takeuchi invokes Ratan Tata, Osamu Suzuki to rally support for small cars, CVs

Pertinently, the letter was written to Shailesh Chandra, president of industry lobby Siam and managing director of Tata Motors PV (passenger vehicles). The two companies have been at loggerheads in drafting a response to the government’s latest draft of the Corporate Average Fuel Efficiency III (CAFE III) norms, which has delayed a unified industry response to the government.

In the same letter, Takeuchi also offered an olive branch—Maruti’s backing for suggestions by Tata Motors and Mahindra & Mahindra (M&M) to support small commercial vehicles (CVs) in the same efficiency norms, “as they serve the less privileged segments of society”.

To be sure, while the small car segment is dominated by Maruti Suzuki, small CVs are dominated by Tata Motors and M&M.

Maruti Suzuki had nearly two-third share in total small car sales of about a million units in FY25, but the segment has seen a sharp fall in sales over the past few years. In small CVs, Tata Motors held a 32% market share with its Tata Ace and Tata Intra series, and M&M had a dominant 45% share. Maruti holds a small 5% share in the segment.

“Great global leaders like Mr. Ratan Tata and Mr. O. Suzuki have always felt the pain of two-wheeler owners and their families trying to afford an entry-level car,” Takeuchi said in the letter dated 17 October that was also marked to the CEOs of leading passenger vehicle and commercial vehicle companies. Mint has seen a copy of the letter.

“Unfortunately, the more efforts our designers undertake in improving the fuel efficiency of the car through light-weighting, the tougher the CAFE target becomes,” Takeuchi added.

Notably, Ratan Tata had famously cited the story of him being touched by seeing families struggle on two-wheelers, which led to him announcing the development of a low-cost car and the launch of the Tata Nano in 2009.

Maruti Suzuki, Tata Motors and Siam did not immediately respond to a request for comment on the issue.

Aiming to iron differences

Takeuchi’s letter sought to iron out differences between Maruti and Tata on both small cars and small CVs, on both of which the companies had opposing views.

In the letter, he expressed fears that the stringent nature of Cafe norms and the extra burden put on small cars could lead the country’s largest carmaker to discontinue such cars in the future. While Maruti Suzuki had pitched for either small cars to be exempted or get some relief in the final calculation of total Co2g/km emission in the upcoming CAFE III norms, Tata Motors has opposed any such relief.

On the other hand, Maruti was opposed to relief for small commercial vehicles in the absence of any for small cars, but Takeuchi’s letter indicated a change in stance.

“Maruti Suzuki is genuinely supportive of the bottom of the pyramid consumer who is stretching hard to afford the purchase of an automobile,” Takeuchi conveyed to Chandra, asking him to convey Siam’s unanimous stand on small CVs to the government to seek relief for such vehicles in emission norms.

“On the same principle, we feel that the super-small car segment has been under stress and, for scientific reasons, sees immense difficulty in meeting an almost impossible CAFE target,” he added.

Calling small cars the most fuel efficient and clean in absolute terms, Takeuchi asserted that the CAFE regime still penalizes them with a big gap, which may force the company to discontinue them.

“Would this be a good step for our society and economy?” Takeuchi asked Chandra. “I would request your eminent assessment and that of our industry members if the smallest such segment can be exempt from the same regulation.”

Due to the differences between the two companies, Siam has been unable to respond to the latest draft of the government’s emission norms, which were released on 25 September. The automobile lobby was expected to file a response within 21 days of the release of the norms.

One of the primary concerns of Maruti Suzuki, as highlighted by Takeuchi in the letter to Chandra, is that the emission targets are becoming disproportionately stringent for small cars compared to larger cars.

An executive aware of discussions between the industry and the government noted that the calculations put forward by Maruti Suzuki suggested that small cars have to bear a big burden.

“The argument put forward has been that the maximum emission CO2g/km cap for cars weighing around 1,000 kg tightens by 42% between the end of Cafe 2 and Cafe 3. But for cars weighing around 2,000 kg, the emission cap comes down by only 29% in the same period,” the executive said.

This phenomenon has concerned the country’s largest carmaker, which worries that the 3G advantage provided in the draft rules may not amount to substantial relief.