Buying petrol model is becoming attractive in the compact or mini UV (utility vehicle) segment with narrowing gap between diesel and petrol prices and changing customer preferences.
Diesel variants have been dominating the UV segment with three-fourths of sales coming from them. However, the segment has started to see some petrol flavour too. Share of diesel-powered vehicles is expected to come down to 40-50 per cent in the compact UV segment in the coming years. Large UVs may, however, remain predominantly diesel.
It is also gathered that petrol variants will be preferred in urban centres, while rural India will stay with diesel variants.
“There will be a more shift from diesel to petrol. The shift will probably be higher in the smaller vehicles and lower in the larger SUVs (sport utility vehicles) and, therefore, higher penetration will come from petrol,” according to Pawan Goenka, Executive Director, Mahindra & Mahindra (M&M).
In the past two years, companies such as Maruti (Ertiga), Honda (Mobilio), Renault (Duster) and Ford (EcoSport) launched products both in diesel and petrol variants in the compact segment.
Honda has seen an increase in share of petrol variants for Mobilio. The ratio has increased to 35 per cent now from 25 per cent about six months ago.
“Given compact UV segment also competes with mid-size car segment because of similar price range and are largely used in city commute, companies that launched diesel and petrol variants in compact segment are relatively well positioned to tap changing customer preference towards petrol models,” said Subrata Ray, Group Vice President, Corporate Ratings, Icra.
M&M and Tata Motors have said that they will be launching new products, especially in compact UV segment, with petrol engine which reflects OEMs have realised changing customer preference and market potential for petrol UVs. “When we launch the compact SUV or anything else that we do in future, we will always come with an equally good petrol option, we cannot rely on diesel being as a primary fuel for compact vehicles,” Mr. Goenka had said.
However, diesel will still be the major fuel powering UVs as it will offer the advantages such as extra power and torque. Also, diesel models will still make sense if the usage is much higher. “Per litre price is lower than petrol and per litre fuel efficiency is higher than petrol cars,” said a Maruti Spokesperson. Maruti and Renault continue to sell more diesel variants of Ertiga and Duster respectively.
Mr. Ray also admitted that diesel engines are well-suited for off-road application because of their low-revving, high-torque nature. Hence, diesel-driven UV will continue to find preference in rural segment where road infrastructure remains weak.
