More than 3 out of 4 hatchbacks and sedans sold in India are now petrol powered. Only 23 % of buyers opting for sedans and hatchbacks in India are choosing diesel powered ones. This figure was as high as 50 % in 2013-14. Only the SUV segment – where nearly 7 out of 10 buyers opt for diesel powered ones – is diesel dominated. Since most car sales in India comes from hatchbacks and sedans, diesels seem to be dying quite fast.
Only 20 % of the top-selling Honda City sedan’s sales come from diesels (previously 60 %). In case of even an SUV like the Hyundai Creta, 30 % of buyers are opting for petrols. In case of many SUVs, the only reason buyers opt for diesels is the lack of availability of petrols. This is expected to change fast as many automakers are introducing petrol engines on SUVs as well.
Top executives at Maruti Suzuki and Hyundai – two of India’s largest car makers – confirm the trend of diesels losing favour among buyers.
RC Bhargava, the Chairman of Maruti Suzuki said this,
I don’t see a big play (for diesel). The market does not like diesel. I expect its share to come down.
Hyundai’s Rakesh Srivastava, director (sales & marketing), added,
Diesel is losing ground now, and the shift is quite pronounced
There are multiple reasons why car buyers are opting for petrols instead of diesels. The primary reason is economics. The price difference between petrol and diesel is now down to Rs. 10. Since diesel powered cars are costlier than petrols, buyers need to drive diesels for much longer distances to make up for the higher initial cost. Also courts in India have banned (lower registration periods) diesel cars older than 10 years, reducing resale value of older cars. This uncertainty over the future of diesels is another factor pushing customers towards petrols. Diesel cars have also been in the spotlight for emission scandals, and customers – who’re now more environment conscious – are avoiding diesels.