For the first time in history, the diesel percentage of passenger vehicles (PVs) has slipped below 17 per cent (16.7) in August —a significant decrease from the 19 per cent recorded in the same month last year, while the share of CNG vehicles is growing in the segment, said industry veterans.

“The diesel percentage has slipped below 17 per cent for the first time in the industry in August. The highest-ever diesel penetration in the industry was in 2012-13 when it was 57.7 per cent. Interestingly, the penetration of CNG is growing in the segment and on a cumulative basis (April-August) the penetration of CNG is now 14 per cent as compared to 10.4 per cent in the same period last year. For Maruti Suzuki India (MSIL), the penetration for CNG is 25 per cent in this period as compared with 18.7 per cent in April-August last year,” Shashank Srivastava, Senior Executive Officer – Marketing and Sales, MSIL, told businessline.

Only petrol or hybrid

According to him, the newly-launched SUVs are also offered in petrol or hybrid versions and that is also one of the reasons for declining sales in diesel vehicles. The reasons could be due to new regulations banning more than 10-year-old diesel vehicles in some States, and also that the gap between prices of diesel and petrol are shrinking a lot in the past few years. MSIL offers all its vehicles in petrol only and a mix of petrol-hybrid and petrol-CNG.  

Apart from MSIL, Honda Cars India, Nissan India, Renault India, Skoda Auto India and Volkswagen India sell their vehicles only in petrol. In the luxury car segment, Audi India also offers only petrol or fully electric vehicles.  

Talking about SUVs, Srivastava said MSIL is on track to achieve leadership in the segment, and during August, it was the leader in SUV sales with 41,658 units, beating Mahindra & Mahindra, which sold 37,223 units.

Top markets ditch diesel

Interestingly, over the last four years, diesel vehicles are declining dramatically in Punjab, Andhra Pradesh, Telangana. Maharashtra, Rajasthan, Haryana and Uttar Pradesh which were big diesel markets.

For instance, in 2019, Punjab was the top market of diesel PVs with 49 per cent, which has come down to 22 per cent as of June this year. Similarly, Andhra Pradesh had 39 per cent market share which is now 26 per cent; Telangana was at 35 per cent which is now at 24 per cent; and Maharashtra from 35 per cent to now 29 per cent.
Rajasthan is at 21 per cent now from 31 per cent in 2019, Haryana from 34 per cent 18 per cent and UP from 33 per cent in 2019 to 18 per cent as of June 2023.    

“Diesel cars’ high price due to regulations, limited supply as original equipment manufacturers (OEMs) are switching to petrol, and short shelf-life are forcing customers to consider other fuel options,” Som Kapoor, Partner at EY, told businessline.