With mainstream and affordable vehicles, Petrol powertrains are more prominent, while Diesel offers great value in premium segments
Ever since the stricter BS6 emission norms hit the Indian automotive market in 2020, many manufacturers jumped ships in favour of Petrol, Petrol + Electric and Petrol + CNG. Situation further worsened for Diesels after the implementation of even stricter BS6 P2 emission norms from 1st April 2023.
OEMs discontinued Diesel powertrains quoting the costs for adapting their current engines to meet stricter emission norms, would not meet the set profit margins. However, with buyer trends shifting more towards SUVs, popularity and demand for Diesel variants have increased, as per Jato Dynamics, a market research, data and analytics firm.
Diesel Car Demand Soars
With the growing demand for SUVs, Diesel engine variants have been witnessing more acceptance. Owing to their torquey nature and pulling power, Diesel engines are the preferred choice in larger vehicles, especially SUVs. Around 9 out of 10 Diesel vehicles sold in India are SUVs, demonstrating a much-needed growth projection.
In the first half of December 2024market share of Diesel vehicles in India stood at 18%, which is an increase from 17.8% market share registered last year. This growth corresponds to the rising demand for SUVs. In the first half of December 2024, SUVs commanded a 55% market share, up from 48.4% registered last year.
Speaking in terms of volumes, Diesel vehicle sales increased to around 7,74,000 units, up from around 7,38,000 units last year. The increase in SUV popularity is complementing the growth of Diesel vehicle sales.
This is the second time Diesel vehicle sales have demonstrated a growth trend post-2011. The last stellar growth demonstration for Diesel vehicles was witnessed in the year 2022 to 19%, up from just 13% seen in the year 2021. This growth trend is a clear indication that Diesel, as an automotive fuel, is not on a decline.
Back to diesel?
Petrol, Petrol + Electric and Petrol + CNG continue to garner excellent reception from buyers in mainstream and affordable segments. Diesel, however, is emerging to be a preferred choice from buyers looking at more premium vehicles, primarily mid-size to large-size SUVs. If we take Mahindra Auto as an example, Diesel variants contribute to 83.4% of sales, up from 81.1% a year ago.
OEMs like SAVWIPL (Skoda Auto Volkswagen India Pvt Ltd), which had completely shifted to Petrol and Petrol + Electric, are now contemplating bringing back Diesels. Petr Janeba, brand director at Skoda Auto India has expressed the brand’s plans to bring back Diesel engines with Octavia, Superb and Kodiaq.
