With the decrease in demand for diesel-powered cars in the Indian auto market now-a-days, many auto manufacturers are considering or starting to discontinuing diesel-powered variants of models altogether. Is this the end of our diesel addiction?
What is the current diesel engine scenario?
The share of diesel cars in the Indian new car market scene has been dwindling at a fast pace for a while. Between 2012-13 and even today, the share of diesel cars has dropped from more than 50 per cent of total cars produced to just 22 per cent. The reducing popularity of diesel vehicles in India can be traced back to multiple factors. The first and biggest one is the narrower price gap between petrol and diesel prices. Although the gap was once INR 29 with petrol being the higher one, the difference in prices of both fuels has gone down to only around INR 5-7/litre. Actually, in some areas, the price of petrol is even lower than that of diesel. This is one of the primary reasons for a dull future for diesel cars.
Additionally, another reason for the diminishing popularity of diesel-powered cars is the upcoming BS-VI emission standards which will take effect next year and will certainly discourage many car companies from manufacturing diesel vehicles. The largest automaker in India, Maruti Suzuki, with over 50 per cent of market share, has announced that it will shelve diesel-powered vehicles after April 2020, when the more stringent emission norms come into effect.
The Maruti Omni's production has been shelved due to its inability to comply with the upcoming BS-VI emission standards.
Tata Motors is another manufacturer that is discontinuing diesel cars by following Maruti Suzuki’s example. This is surprising since diesel motors have been Tata’s strong point. Nevertheless, the 1.05-litre diesel motor from the Tata Tiago is now ready to be discontinued. Moreover, neither the Altroz nor the production version of the H2X will be offered with a diesel motor under the hood.
The President of Passenger Vehicles Business Unit of Tata Motors, Mayank Pareek, states:
“We feel that low demand for entry- and mid-size diesel models will not justify the high costs involved in developing a new small capacity engine.”
Pareek added that the demand for petrol models in the small car segment now accounts for 80% of total production. Therefore, it does not make much sense to invest such a huge cost in making its current diesel motors adhere to the new emission standards.
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There are many other factors contributing to the reluctance of carmakers in continuing to produce diesel cars. Firstly, the advent of the BS-VI emission standards will lead to a wide gap between the prices of petrol and diesel motors, in some cases by at least INR 1 lakh. On the other hand, due to the introduction of fuels which are compliant with the BS-VI norms, the prices of petrol and diesel are getting closer, with diesel costing more in some locations. Last but not least, the fuel efficiency of petrol motors is getting better and better, leading to decreasing demand for their counterparts.
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What are the BS-VI emission standards and how will they affect the Indian auto market?
You may have heard a lot about the BS-VI emission standards but do you actually know what it means? To clarify, the 'BS' stands for Bharat Stage, which are the standards formulated by the government to put a restriction on the release of air pollutants from motor vehicles. First introduced in 2000, these norms restrict the emissions of such air pollutants like sulphur oxides, particulate matter (PM), hydrocarbons, carbon monoxide and nitrogen oxides from ICE-powered vehicles. As the stages increase, the regulations become more rigid.
The air pollution in India is becoming worse each day, which has led the Indian government to skip the BS-V norms and step straight from the BS-VI to the BS-VI standards. The new stricter norms will require many auto manufacturers to invest a great amount of money in making their diesel engines more environmentally friendly. This will involve the usage of better particulate filters, more advanced engine software and hardware, which will in-turn make the diesel-powered vehicles much more expensive. This is one of the biggest reason for the dropping demand for this type of vehicle. According to some car experts, with the introduction of the BS-VI emission standards, the gap between diesel cars and petrol cars will be as large as INR 2 lakh or even higher.
Can the serious air pollution in India be resolved with the implementation of the BS-VI emission norms?
This was also the root cause for the recent 'dieselgate' scandal. In international market, Volkswagen had had difficulty in fulfilling the Euro 6, similar to the BS-VI norms in India and found a way to get around this problem with 'cheat devices'. Four years ago, its vehicles were discovered to be actually emitting much more pollutants than what was allowed. Disappointingly, the company utilized a software to cheat the testing machines into thinking that its cars are meeting all the requirements. Now, one or two more major car manufacturers have come into the spotlight for being accused of using cheat devices of its own.
Will diesel motors be discontinued in India in the near future?
The answer to this question is absolutely not. Posting a ban on a type of vehicles which has such high popularity in the country will definitely take time, not to mention the fact that Europe has had to spend more than a decade completely implementing the Euro-6 emission standards.
Moreover, the SUV segment in India is developing much more quickly than ever, with 70% of customers preferring diesel variants because their robust SUV designs match well with the “torque-y” nature of the engine. Therefore, it is unlikely that there will be a sudden discontinuation in the production of diesel-powered vehicles.
The Maruti Vitara Brezza, which is only powered by diesel engine options, is the dominant in the compact SUV segment.
Finally, diesel vehicles are often associated with lower running costs and higher torque outputs than its petrol counterparts. Therefore, people who use their cars on a regular basis, prefer a high torque figure are more likely to prefer a diesel mill.
Although diesel-powered vehicles have been decreasing in popularity in India, the complete discontinuation of this type of vehicle is still very far away.
What do you think about diesel cars and their prospects in India? Let us know in the comment section below.
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