Why Diesel Cars Make Sense only for a small percentage of users in India

In the early 2010s, the difference between diesel and petrol prices rose to a very significant 50 percent. Plus, diesel engines made their way into smaller cars — hatchbacks and premium hatchbacks. As a result, in 2013, diesel cars made up a whopping 47 percent of total car sales, according to global information provider IHS Markit.

For some buyers, the hangover continues. They still prefer diesel, largely because they think it saves them money. Maruti Suzuki sold 18% diesel cars and 82% petrol cars in 2019-20. Sales of diesel variants still made up nearly a third of car sales in India in 2019.

Do diesels make economic sense anymore?

 

Absolutely not.

Consider this: At the time of writing, one litre of petrol costs Rs. 80.4while diesel is marginally lowerat Rs. 73.5 in Delhi. Thisis a far cry from the days when petrol prices were in the Rs. 60 range while diesel was around just Rs. 40. Gone too are the days when diesel beat petrol by miles, in terms of mileage.

Petrol engines have come a long way. The all-aluminium K-Series engines from MSIL with innovative rocker-less DOHC Camshaft, Plastic Intake Manifold and Offset crankshaft with low tension rings, reduces power transmission losses and improves fuel efficiency. Further, enhanced thermal efficiency and increased compression ratio help boost efficient conversion of fuel into energy.

It is not uncommon for a petrol-powered Maruti Suzuki car to return 24-25 kmpl. And it does so while being peppy and fun to drive, in addition to being so much quieter inside the cabin.

The numbers are stacked against diesel

Let’s do some simple math: If a petrol car does 21.7 kilometres/litre and its diesel counterpart delivers 4 kilometres/litre more, then the per kilometre running cost comes to Rs. 3.70 and Rs. 3.18, respectively. That is a saving of just 52 paise per kilometre.

The on-road price difference between petrol and diesel turns out to be around Rs. 1.5 lakh for a premium hatchback. So, if you want to recover this extra Rs. 1.5 lakh, you will have to drive the car for 2.89 lakh kilometres.
That is a lot of kilometres. If you keep the car for five years, that would mean 57,901 kilometres a year or a 4,825 kilometre a month. Do you really drive that much?

How much do we really drive our cars?

In the Cartoq database of 128,578 used cars, collated from various online used-car platforms, we analyzed how much people actually drive their cars. Here are some numbers:

Average Monthly Usage
FUEL	No. of cars	Average Monthly Usage in KM
PETROL	68,704	858
DIESEL	59,872	1,100

 

While those with diesel cars did clock higher monthly usage — 1,100 kilometres compared with 858 kilometres for petrol — it is nowhere near the usage of 4,825 kilometres required to break even on the additional cost of buying a diesel car. In fact, if you drive just 1,100 kilometres every month, you will need 21 years and nine months to recover the additional cost. That is well beyond the useful life of any car — that is, if the laws allow you to keep running the car for that long!

‘But those are averages, they don’t represent all buyers,’ you say. Right, so let’s look at the data distribution for diesel cars:

Percentage of Cars / Monthly Mileage
Under	Number of Diesel Cars	% of Diesel Cars
500km/month	2,907	4.86%
501-1000 km/month	26,567	44.37%
1001-1500 km/month	19,888	33.22%
1501-2000 km/month	6,804	11.36%
2000+ km/month	3,706	6.19

Nearly 50 percent of all those who bought a diesel drove their cars less than 1,000 kilometres. And as the usage bracket rises, the percentage of users falls. Thirty-three percent drove their cars between 1,001-1,500 kilometres while only 11 percent of the cars were driven in range of 1,501-2,000 kilometres. And just 6.2% of cars were driven more than 2,000 kilometres/month. How many cars driven for more than 4,000 kilometres required to recover the additional cost a diesel car? Well, hardly any.

Conclusion

The nearly 5,000 kilometres monthly running/usage is usually taxi territory. Very few personal car owners, if any, drive their cars so much. The average monthly running of 1100 kms is pretty much what heavy users are likely to clock. And at that usage level, your savings in fuel over five years will be Rs. 34,196. In other words, by buying a diesel car, you are spending Rs. 1.5 lakh extra to save Rs. 38,535! Now, that’s a hangover — and an expensive one at that! Check out the petrol diesel calculator here