Petrol powered UVs have contributed to the major share last fiscal over diesel due to a number of reasons mentioned below
The market share of petrol utility vehicles has nearly doubled in the last twelve months in the domestic market, signalling a shift in the trend that has been happening for some time now. This can be attributed to the increase in diesel fuel price seemingly every day and the increase in the selling price of BSVI compliant diesel vehicles.
The BSVI emission standards came into effect on April 1, 2020, and automobile manufacturers discontinued the diesel-spec variants of their existing product range due to the high costs involved in upgrading them compared to the petrol models. The narrowing gap between petrol and diesel prices can be considered as another reason for the shift.
In the last FY, three out of five UVs sold were petrol (about 60 per cent) and the statistics stood at one out of three (about 33.3 per cent) in the previous fiscal. The higher preference towards gasoline equipped models can be clearly seen in the sub-four-metre SUV segment, as the diesel share plunged from 60 per cent to 25 per cent on a YoY basis.
In the hatchback segment, the preference for diesel variants reduced from 5 to 1 per cent while in the sedan space 33 per cent to 6 per cent, and in the vans from 10 to 3 per cent last FY. Besides having lower price tag comparatively, the fuel economy of the petrol-powered vehicles has also improved and the running cost differences have gone down as well.
Nine years ago, the diesel fuel price was 40 per cent cheaper than petrol but now the difference stands at only around Rs. 5. Leading automakers like Maruti Suzuki and Hyundai are looking to expand their CNG lineup to give customers a more economical option in the entry-level segments while Tata Motors has already been spied testing the CNG-spec Tiago and Tigor.
Before the inevitable switch towards electric mobility solutions, alternative fuels like CNG are considered as realistic options. In the mid-size SUV segment, diesel-powered variants contributed to 64 per cent of the total volume and it went up to 94 per cent in the more premium SUV segments in FY2021 as diesel engines offer better performance and can be more fuel economical.