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
· 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
· 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
· 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