The sales of diesel cars in the small car and sedan segments have reduced to 1.8 per cent in the period between April and June 2020
Ever since the implementation of the BSVI emission standards on April 1, 2020 the Indian automotive industry had to let go of some of the iconic models. One primary reason for brands not selling them anymore is the stricter crash test regulations while the other will be the costs involved in updating the diesel engines to meet BSVI norms, as they do not make a viable business case.
The entry-level small car segments are devoid of oil-burners while many carmakers including Maruti Suzuki have opted against offering diesel powerplants into the future. Resultantly, the market share of diesel models has drastically reduced in the compact car and sedan spaces and it was down to just 1.8 per cent in the opening quarter of this financial year.
In Q1 FY2021 (between April and June period), the diesel sales saw one of the worst slumps and the steep increase in diesel prices can be said as a main reason too. Considering that the diesel variants of any model cost at least Rs. 1 lakh more than their respective petrol versions, the calculative customers looking for a break-even would sway down the petrol way.
The downfall of diesel sales has led to CNG variants clawing back more market share as it increases to 14 per cent. Generally, the people wanting to buy SUVs and crossovers would prefer diesel variants but it does not seem to be the reality anymore. In April to July 2020 period, the share of diesel SUVs has reduced to 42 per cent.
Early this decade, the share of diesel variants in the SUV and passenger UV categories stood at a whopping 98 per cent and in 2012-13, the diesel market share in the regular car space was at 47 per cent. In the future, there will be more clampdown in regulations as the industry will move towards electrification to reduce pollution standards further.
CNG can be considered as an immediate alternative to diesel due to lower price and high mileage but the performance deficiency will put people off. Introducing measures to strengthen the EV infrastructure is certainly key as we drive towards a cleaner future.