The passenger car segment might see a drop in diesel cars sales with Maruti declaring to stop diesel car production but the major transportation industry would still be preferring diesel over petrol. The dominance of diesel in SUV and MUV will continue as per industry experts. For a normal user if the kms are less than 15000 per year then the high initial cost justification does not apply due to lowering gaps between petrol and diesel prices.
It is expected that the variation in price in diesel cars would be more evident in small and compact UV segment. Getting a diesel variant conforming to BS-VI would be a costly affair and unless the volumes picks up it would be a tough challenge for the OEMs to introduce a diesel variant.
As per TML (Tata Motors Ltd) the diesel cars with BS-VI compliance would make the price for car high and might pull down the demand for for entry and mid-sized segment which would eventually hurt the small capacity engine cars.
The price is an important factor for new car customers who would be interested in entry level models from OEMs and the diminishing gap between petrol and diesel would further decrease the demand for diesel cars if it is not priced competitively which seems difficult given the cost involved in making BS-VI compliant small cars.
CNG has also been a spoiler when it comes to intra-city taxi segment which has seen a huge migration from diesel to CNG owing to high initial cost and rising diesel prices leading to further decline in diesel car sales.
World over diesel is quite popular in Light and Heavy Commercial vehicle segment but in India it got attention in personal segment due to govt policy of keeping a wide gap between petrol and diesel prices. Whatsoever be the case the industry experts expect that the diesel would continue to play important role in SUV and MUV segment in India.
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