Skoda Kylaq SUVRoaring SUV sales are driving the share of diesel with nine out of ten diesel-powered vehicles sold in the country this year being SUVs. This has helped boost the share of diesel in the domestic passenger vehicle market for only the second time in 13 years at a time when the auto fuel is getting increasingly outshined by petrol, CNG and electric vehicles.
The share of diesel in total PV sales is estimated at 18% as of the first half of December 2024, up from 17.8% in 2023, according to Jato Dynamics, a market research, data and analytics firm. Diesel vehicle sales climbed to 774,000 units from 738,000 units during this period. SUVs have a 55% share of total car sales this year, up from 48.4% in 2023.
This is the second instance since 2011 of diesel improving its share in the Indian passenger vehicle market. It last rose in 2022 to 19% from 13% in 2021.
“What we’re seeing is diesel’s evolution into a specialized solution, not its decline. The technology particularly suits mid- to high-end SUVs, where its low-end torque proves ideal,” said Ravi Bhatia, president, Jato Dynamics.
In addition to being fueled by the growing SUV sales where diesel is a preferred choice, improved diesel technology and better road infrastructure is also stoking demand. More than half of passenger vehicles sold in the local market are now SUVs.
Diesel’s growing share has prompted some companies such as Czech carmaker Skoda to reintroduce diesel models in the Indian market. Skoda is considering reviving diesel options in the next-generation Superb and Octavia premium sedans, which are set to go on sale in India in 2025 as completely built units or fully imported models.
Subsequently, Skoda’s Kodiaq SUV, which has been losing sales to Toyota Fortuner in the absence of a diesel engine, will also get a diesel powertrain when its due for a mid-lifecycle makeover, said people aware of the company’s plans. VW Group brands including Skoda, Volkswagen, Audi, Porsche, and Lamborghini stopped selling diesel vehicles in India from April 2020.
Petr Janeba, brand director at Skoda Auto India confirmed the company’s plans to bring back diesel. “We will first showcase it and seek feedback. Diesel is over 35% out of more than 70,000 Octavia which are currently on the road. The same is for Superb as well,” he said. “Even for the Kodiaq, it’s a preferred solution.”
Modern diesel engines have transformed significantly. With advanced emission control systems, they offer better refinement and environmental performance. While diesel outperforms petrol in CO2 emissions, the added cost of these technologies makes them viable mainly in premium segments, he added.
The high share of diesel is most pronounced for manufacturers that have models priced at more than Rs 15 lakh and in luxury brands. At utility vehicle Mahindra & Mahindra, for instance, the share of diesel inched up to 83.4% in 2024 from 81.1% a year ago. BMW India’s diesel share jumped to 36% from 22.8% in the same period.
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