Diesel cars, which seemed to be driving into oblivion in the passenger car space, have staged a quiet comeback following resumption of normal production levels and improved availability of semiconductors.

Carmakers and dealers have seen a rise in demand for diesel powered passenger vehicles, especially sports utility vehicles (SUV), in the last several weeks. This has come as a surprise for many as several companies, including market leader Maruti Suzuki, completely stopped making diesel cars for the Indian market as their price had become unaffordable for the sub-₹10 lakh car buyer.

Hyundai Motor India witnessed a higher-than-industry-average response for the diesel variant of the newly launched refreshed Venue and for other models that have diesel as an option.

Hyundai Motor’s bookings

Tarun Garg, Director – Sales and Marketing, Hyundai Motor India, said, “33 per cent of the bookings we got for the new Venue are for diesel variants, which is up from 23 per cent we had for the older model.” Venue is Hyundai’s sub-4 meter compact SUV whose petrol prices start at ₹7.53 lakh, while diesel variants starts at ₹9.99 lakh.

Diesel penetration for the Korean car brand is ‘extremely good’ in all the models where diesel is available as an option. “In Creta, diesel share is 61 per cent compared to 53 per cent last year, Alcazar is 81 per cent whereas last year it was 69 per cent, in Verna it is 50 per cent as against 37 per cent last year. Overall share of diesel in Hyundai portfolio has risen to 30 per cent from 25 per cent but it is around 50 per cent in models where diesel is available as an option,” Garg added.

Tata Motors and Mahindra & Mahindra (M&M) have also seen good response for diesel variants. “Around 70 per cent of the demand for XUV700 is for the diesel variant. 60 per cent of sales of XUV300 is diesel. We have a strong preference for diesel for our range,” said Rajesh Jejurikar, Executive Director, M&M.

Good response

Rajan Amba, Vice-President, Sales, Marketing and Customer Care, Tata Motors Passenger Vehicles, said, “In line with the overall growth, we have received an excellent response for our range of passenger vehicles having diesel powertrains. The diesel versions of Nexon, Altroz, Harrier and Safari contribute 20 per cent to sales, which is above industry average.”

Dealers, however, say that demand for diesel models did not go down to the extent it was projected. Sales of diesel variants crippled because carmakers chose to produce petrol variants more since they was cheaper and required fewer semiconductors. Thus, the waiting period on diesel cars went up, in turn, leading to lesser demand, say market watchers.  

Vinkesh Gulati, President of the Federation of Automobile Dealers Association, said, “Petrol cars need 20 per cent less semiconductors than diesel cars. Manufacturers started making much more petrol cars leading to a shortage of diesel cars. Today, we have reached normal production levels since chip supply has improved and therefore manufacturers are gradually ramping up diesel vehicle production.”

Not just Maruti Suzuki but Volkswagen, Renault, Skoda, Nissan and Toyota do not have diesel models under ₹15 lakh. While three out of every five Cretas sold by Hyundai are powered by a diesel engine, Maruti Suzuki and Toyota would offer their new Creta-rivalling models with only petrol engines.