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2020 (Apr-Dec) BS6 Fuel Mix Analysis

Petrol mix in new passenger vehicle sales has reached to 83% in 2020!

Comes BS6 emission norms era and supply-demand equation has changed dramatically in 2020. Petrol is now a dominant fuel in all new car sales. The complexity involved in exhaust gas treatment of diesel engine to meet BS6 criteria has led to a higher price gap between petrol and diesel engine purchase price for customers, and the shrinking petrol-diesel price gap is no relief either.

Manufacturer wise Fuel Mix -

· Renault-Nissan and Skoda-Volkswagen has shunned diesel engines completely and switched to all petrol portfolio.

· In the past both the groups have developed and sold, much-loved diesel K9K and TDI series engines respectively.

· But reluctance for whatsoever reason, may make them suffer, particularly in SUV category, where diesel is still preferred fuel.

· Maruti is still trying hard to upgrade in-house developed 1.5L BS4 diesel for SUV/MUV portfolio.

· In the meantime, they have completely moved to petrol portfolio.

· Interestingly, the approach has little difference, as they tried to substitute diesel with factory-fitted CNG kit (dual fuel).

· Mahindra’s UV portfolio was largely driven by diesel engine (88%).

· But things may change, as Mahindra will put mStallion range of engine in upcoming XUV 500.

· Thar already has 13% petrol mix with an all-new petrol engine.

· Toyota’s non-Maruti sourced portfolio is completely diesel driven

· Ford’s high diesel mix is due to 1.5L diesel engine, which is quite impressive and easily find quite many fans too.

· Hyundai-KIA’s LNT based 1.5L is quite cost-effective and doing quite well for SUV portfolio.

· Tata’s diesel mix for 1.5L is at quite a low now, and upcoming petrol Harrier and Altroz BEV may reduce the mix further.

· Honda’s diesel mix is driven by WRV and Amaze, that too because of the availability of automatic transmission on Amaze and sunroof on WRV.

· Diesel engine could prove to be handy for Honda if only, they get proper crossover/SUV for India.

· MG’s petrol mix is high due to fact that it doesn’t has diesel automatic transmission on Hector.

· So, if someone wants the convenience of automatic Hector, one needs to settle down for petrol DCT or new CVT, now.

· From 2020, Jeep’s customer too had diesel automatic choice, but it comes at a huge price premium, as it is always coupled with an AWD system.

· Maruti continues to command 59% of the petrol engine market share with its highly refined and efficient engine range.

· Diesel market is dominated by Hyundai-KIA’s low-cost LNT solution equipped engines.

· Mahindra with a wide range of diesel and UV heavy portfolio, also, dominates diesel market.

· But the interesting thing is, FCA produces and sell more diesel engines than it sells car in India(0.7% diesel market share).

· FCA commands 8% diesel market share, as the same engine does duty in Tata and MG’s product.

· In fact, MG Gloster’s engine is a derivative of FCA’s engine, further developed by Bosch and Honeywell (Garett now).

· But Tata were clever than FCA and sourced a 6-speed torque converter from Hyundai rather than going for FCA’s 9 speed ZF one, coupled with FWD.

· Toyota’s diesel market share comes from Innova and Fortuner, where diesel mix is 98%.

Body style Fuel Mix Analysis -


· It seems diesel engine is on its last breath for hatchback

· Except for Ford Figo, diesel mix is in single digit for other manufacturers

· But then Ford’s 1.5L diesel is way more superior to 1.2 L petrol

· And Hyundai’s i20 may only be next to survive, because of synergy derived from 1.5L engine

· But with the upcoming Altroz BEV, diesel may have fewer takers for Tata

· Factory fitted CNG kit has emerged as an alternative in the hatchback category


· Story is not very different here from the hatchback segment

· Most manufacturers don’t have a diesel engine for the sedan

· Hyundai has a lot of synergy from SUV and can keep diesel alive for Verna

· Ford’s story is the same everywhere

· Honda’s reluctance to offer automatic for diesel has kept mix at a low level for City


· There are hardly any takers for Toyota’s petrol-guzzling Innova, but diesel is of course revered

· CNG did help Maruti to substitute diesel engine demand

· XL6 in the petrol-only avatar was doing pretty well


· Conventional wisdom suggests that SUV has to have diesel

· But BS6 era has seen a dramatic change in mix

· As exhaust gas after-treatment is very complicated and expensive for diesel engines

· So here we sliced and diced data differently to get real story

· Products are segregated into three basket based on size – small (under 4m), medium (4-4.5m) and large (4.5m+)

· Bigger and heavy car means low fuel efficiency, and here comes diesel engine for rescue, with high torque and efficiency

Diesel still sells significantly in SUVs

· In small crossover/SUV category mix is as high as 72%

· But then it also depends on proposition offered by individual product and engine

· For example Ford’s diesel engine is superior to petrol, hence higher diesel mix for Ecosport

· But Thar’s petrol mix acceptance suggest where the industry is heading to

· In the medium category, the scale is tilted by diesel-only - Scorpio, Bolero, and Creta+Seltos - which also comes with the convenience of Automatic transmission

· In the large SUV category it is a no-brainer, 5-6 kmpl efficiency of a petrol engine is deterrent

· MG Hector is the slight exception due to the non-availability of automatic transmission on diesel

· However, upcoming XUV 500 and Harrier petrol may tilt the equation in future

· Good thing is BEV SUV has secured 1% market share in SUV/Crossover segment


- Bigger the car size, higher is diesel mix


- Ladder chassis cars are heavy and so is the fuel choice

- But Thar has definitely changed some perception, and numbers too

Engine size

· Overall India is a small car market with small engines (67%) due to unique tax rule

· Small, under 1.2L engine, has biggest market share(80%) in the petrol segment

· Manufacturer’s focus on new downsized turbo petrol engine has set the course in BS6 era for the smaller engine as well

· Well in the diesel category, engine displacement does matter due to the inherent nature of power and torque curves

· Due to SUV/MUV large diesel engines will survive

- Toyota still has quite a dependence on large diesel engine for its pick-up chassis derived products – Innova and Fortuner

- Hyundai’s 1.2L diesel may see sunset quite soon due to such low demand

- Instead of making cars like Tucson in such small numbers, Hyundai should rather focus on selling its nice 2L engine to others

- Tata is selling more FCA sourced 2L diesel engine than its own in-house 1.5L

- MG is totally dependent on FCA for its diesel portfolio

- Small petrol engine dominates every manufacture’s portfolio

- Toyota’s petrol engine portfolio is now 98% driven by Maruti’s engine

Electric car

· BEV (Battery Electric Vehicle) car market share is 0.2% of total cars sold in BS6 era (2020 Apr-Dec)

· Tata has garnered 71% of BEV passenger car market with Nexon and Tigor BEV

· Mahindra once pioneer in BEV passenger vehicle is not even a fringe player now

· MG too is playing its card quite well with the right product choice (Crossover), and secured 25% market share

· BEV party has started now only, and in the next 5 years, any newcomer will not be a late entrant

· In fact, in this nascent stage, every newcomer with the successful product will be the market, thyself

CNG Car (Dual fuel)

- Interestingly, factory fitted CNG cars contributed 6% of overall market share

- This push is largely from Maruti and Hyundai for its budget friendly cars

- Maruti’s failed attempt to develop 1.5L BS6 diesel engine on time, has made them to venture into CNG kit for Dzire and Ertiga (for fleet segment)

- Hyundai i10 Nios figures shows that this move may also help in keeping upcoming CAFÉ norms and carbon footprint under check, in future


# Diesel engines will face a new challenge from 1st April 2023 with BS6 RDE phase

# Hatchback, Sedan and sub 4m SUV may see the demise of diesel engine, as, the current mix is low

# Hyundai-KIA may have to go for SCR+DPF from the current LNT, which will affect the cost of diesel Creta+Seltos

# Large diesel engine will survive as they need software upgrade with current hardware setup in most cases

# Driver for BEV will be new products introduction and development of charging infrastructure


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