The diesel cars have been a great source of fuel efficiency and newer technologies have made it a preferred option. Gone are the days when diesel vehicles were cumbersome and had the perception of costlier maintenance.
India will upgrade to Bharat Stage VI in 2020 which will bring stringent norms on carbon emission. This will directly influence the spending on new technology on diesel vehicle to make it more eco-friendly and to meet the emission norms.
Companies are shelving their plans on building small diesel engine because of the cost involved in building one. The overall costs are bound to go high due to the investments in technologies to meet emission standards and this will translate to the cost of the vehicle.
C V Raman, executive director of engineering at Maruti Suzuki, said: "It will put a lot of pressure on cost and development. The gap between petrol and diesel vehicles today is Rs 1 lakh; it will go up to Rs 2 lakh when the new regulations come in. The customer will decide if diesel is still relevant for him or not."
There will be an increase of Rs 2 lakh when you compare the price between petrol and diesel vehicles. Four years ago the diesel market was 52 percent and has considerably decreased to 26 percent in May 2016.
The decrease in the volume of diesel vehicles confirms the transition of choice to petrol vehicles by the customer.
Sumit Sawhney, country CEO, and managing director at Renault India said, "It does not make sense investing in small diesel engines for India considering that in less than four years, the market will graduate to Bharat Stage VI. Investment in BS VI diesel engine is much higher vis-a-vis gasoline."
"Our understanding is that by 2020, the small car market will be petrol while diesel will be seen only on large cars and SUVs (sports utility vehicles). That is why Renault is not working on any small diesel engine programme," added Sawhney.
Cars like the Renault Kwid, Tata Tiago and Maruti Suzuki Celerio offer mileage in the range of 23-25kmpl, which is at par with diesel vehicles. This makes the petrol vehicles a good buy from the customer's perspective.
Companies would rather invest their money on newer models than investing on improving technologies revolving diesel motors. This makes them competitive and keeps them ahead in the race.