From accounting for one in every two cars sold in India back in 2012, the diesel vehicles have been suffering from dwindling popularity. In 2016, only one out of four cars sold in the country runs on diesel, a share of 26%.
The steadily decreasing price difference between the petrol and diesel fuels combined with additional procurement cost of diesel cars (diesel hatchbacks are around 1 lakhs more expensive than their petrol counterparts) has been making diesel cars less and less popular in the mass market segments.
Another factor that is driving the sales trends away from diesel cars is the reducing replacement cycles (4-5 years) in bigger cities. With a short lifecycle, it’s difficult to recover the initial investment made on diesel vehicles.
Considering the retail price in Delhi, the price difference between petrol and diesel prices reduced from INR 27.2 in July 2012 to INR 10 now. In other words, the approximate per-kilometer running cost advantage of diesel cars reduced from INR 2.72 to INR 1.75 (assuming an average fuel efficiency of 14 kmpl for petrol cars and 19 kmpl for diesel cars).
The latest anti-diesel sentiment like the NGT diesel ban in Delhi which prevents sales of bigger engined diesel models also proved to be an important factor in the diminishing share of diesel cars.