NEW DELHI: Five years ago, one out of every two cars sold in the country was a diesel vehicle. Today, that figure has halved to just one in four cars.
The fall is not confined to sedans and compact cars, it has also impacted the SUV category, which has traditionally been a strong diesel votary. The share of petrol vehicles in SUV sales has grown nearly five-fold from 3% in 2012-13 to 16% at the end of 2017-18.
The narrowing price gap between petrol and diesel has been feeding the trend, as have numerous regulatory and legal actions – larger diesel engines (over 2,000cc) were banned in Delhi-NCR for around eight months in 2016, and have a legally permissible life of only 10 years in the national capital against 15 years for petrol.
A similar shorter life for diesel vehicles – which have higher particulate matter (PM) and nitrogen oxide (NOx) emissions — is being contemplated by many other state governments across the country on concern over rising pollution, prompting many buyers to shift their priorities towards petrol.
Taxis in many cities are not allowed in diesel, but only in petrol or petrol/CNG.
Demand for diesel cars set to dip further on higher price
According to numbers provided by industry body Siam, the share of diesel in car sales has come down to 23% at the end of 2017-18 against a high of 47% in 2012-13 (it was 27% in 2016-17). In SUVs, the share of diesel is now 84% against 97% in 2012-13.
The demand crunch for diesel vehicles is only going to get stronger as retail prices of the vehicles — already higher by around Rs 1-1.5 lakh against petrol counterparts — could move up sharply when the stricter BS-6 emission norms kick off from 2020. The upgradation will result in major modifications and upgrades to diesel engines, and companies say that this will further increase their prices against petrol versions.
Carmakers are now trying to align their product strategies in line with the trend. For example, Toyota – which gets most of its sales from diesel engine cars such as the Innovaand Fortuner – has decided to opt for only a petrol engine for its soon-to-be-launched sedan, Yaris. The car, that will compete with models such as Honda’s City and Hyundai’s Verna, will sport a 1.5-litre petrol engine. “Petrol is where we see a strong demand. Thus, we decided against having a diesel engine on the Yaris for now,” Toyota Kirloskar Deputy MD (Marketing & Sales) N Raja told TOI.
Luxury makers such as Mercedes, Jaguar Land Rover, and BMW have also been adding petrol variants across their product line-up against previous offerings which mostly comprised diesel cars.
Mahindra and Mahindra, the company with the strongest sales connect with diesel, also opted for a petrol variant when it introduced its mini utility vehicle KUV100 that comes with a 1,200cc petrol heart. Maruti chairman RC Bhargava has said that there will be pressure on diesel sales in coming times. “I don’t see a big play (for diesel). The market does not like diesel. I expect its share to come down,” he said recently when asked to comment on the trend. economictimes