Diesel SUV: The craze of diesel SUV continues! Price tension will increase due to BS7 rules?

Diesel SUV : While hatchback and sedan buyers have turned away from diesel vehicles in the Indian car market, demand for diesel engines remains strong among consumers who like SUVs, off-roading and long drives. The market share of diesel passenger vehicles has remained at around 18 per cent over the last three years due to strong torque, good mileage and being useful for long distance travel. Interestingly, in 2012-13, this share was as much as 47 percent. But then due to stricter emission norms, increasing use of petrol-CNG and electric vehicles, diesel has almost disappeared from small cars in cities.

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Now in the wake of BS7 emission norms, the fate of diesel vehicles is back in the spotlight. As the new regulations are likely to increase the price of diesel vehicles, there is a debate in the industry whether the dominance of diesel in the SUV segment will last. According to experts, diesel is now becoming more and more limited to buyers of large SUVs and luxury vehicles rather than the general consumer. Because power, driving experience and long range are more important for these customers.

Mahindra & Mahindra has benefited greatly from the diesel SUV market. The company’s models Mahindra Scorpio, Mahindra Thar and Mahindra Bolero are getting huge popularity among customers. But the company is now focusing on electric and other powertrain technologies instead of just relying on diesel. Mahindra officials explained that the company’s emphasis is on providing various options according to the needs of the customers.

Even in the luxury car market, the demand for diesel vehicles is seen to continue. According to Santosh Iyer, MD and CEO of Mercedes-Benz India, diesel models accounted for over 50 per cent of the company’s sales last quarter. Consumers still prefer diesel considering cost of ownership, mileage and commuting capability. At the same time, the company is also giving preference to hybrid and electric vehicle options.

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Meanwhile, BS7 norms are expected to increase the price of diesel vehicles by Rs 30 thousand to Rs 1 lakh. This change could be especially important for customers buying SUVs in the Rs 10-20 lakh range. Hence, the entire auto industry is paying attention to whether diesel consumers will switch to CNG, hybrid or electric vehicles in the future.