Petrol cars continued to rule streets in FY23 amid EV play

0

While FY23 has been a watershed year for alternatively powered vehicles in India, they are eating into the share of diesel passenger vehicles (PVs), rather than petrol and CNG-run automobiles. Petrol-powered cars continue to account for 70% of total PV sales this fiscal, followed by diesel vehicles at 18.5%.

The primary reasons for growth in petrol PV sales are price parity between petrol and diesel, the introduction of petrol hybrids and more model launches with petrol-only option. In the last five years, petrol model sales contribution has increased from 60% to 70%. CNG models account for 10% of PV sales and electric stands at 1.3%. In 2018-19, CNG sales stood at 3.8%, while electric vehicles were yet to take off, according to Jato Dynamics estimates.

“Petrol is the primary choice for cars, entry level and mid-sized SUVs largely driven by the usage pattern and operating economics based on distance travelled. For the larger SUVs, the diesel proportion continues to be high as the operating economics works best here,” said Veejay Nakra, president, automotive, Mahindra & Mahindra.

Tightening emission regulations and the narrowing gap between petrol and diesel prices meant that fewer auto companies launched or upgraded diesel models. In addition, diesel vehicles have to be scrapped after 10 years in the Delhi National Capital Region (NCR). Petrol vehicles have to be scrapped after 15 years. Diesel car sales which accounted for 36% in 2018-19, now contribute just 18.5%. There were 13 petrol car launches this fiscal, followed by eight electric launches, six diesel models and one CNG vehicle.

“There is certainly category creation happening in EVs. With improved affordability, reduction in battery cost over time, more models and better charging infrastructure, the penetration in EVs will see an increase,” added Nakra.

SUV trend continues
The SUV market continued to hold strong – long waiting periods for some models were balanced out by discounts on others. “The trend for SUVs continued and its share will probably be around 42%, a marginal 2% growth. The growth across segments is even this year with declining hatch and sedan segments likely to see growth in excess of 20%,” said Shashank Srivastava, executive director, Maruti Suzuki.

“Higher cost of alternative fuel vehicles and the friction points around availability of wider choice, charging infrastructures is leading to a classical chicken and egg problem. We have seen a significant shift in the petrol vs diesel mix with hybrid technologies being more popular,” said Ravi Bhatia, president at Jato Dynamics.Tata Motors, the market leader in this emerging segment, has the largest portfolio of electric vehicles. Tata Motors expects a 20% contribution from EVs in its overall PV portfolio by 2027-28.

Meanwhile, car prices (ex showroom) have risen significantly by almost 25.4% in the last three years and this has forced many buyers to review their choice. Economic fundamentals indicate some stress as higher inflation, rising interest rates and slower growth will reduce disposable income and hence lower the inclination to spend on discretionary products such as cars, say experts.

The PV industry is likely to end FY23 with record sales of about 3.9 million units, a growth of 26% over FY22 and bettering the previous high of 3.37 million units in FY19, on the back of strong petrol vehicle sales.

Read original article here

Denial of responsibility! Verve Times is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave a comment
Hello,