Petrol cars have long dominated the Indian automobile market, but that dominance now appears to be weakening. The industry is seeing a noticeable shift toward CNG, hybrid and electric vehicles, while petrol cars are increasingly piling up in dealership stockyards.
Petrol Cars Are Losing Their Dominance in India
The change is being linked to several factors, including rising fuel costs, changing consumer preferences and concerns surrounding E20 petrol. There is also discussion about whether India could eventually move beyond E20, creating additional uncertainty for buyers considering a new petrol vehicle. According to automobile industry expert Amit Khare, the decline in diesel vehicles took almost 14 years. In 2012, the large price difference between petrol and diesel made diesel cars attractive. But as diesel prices increased, their market share gradually declined.
The shift away from petrol, however, appears to be happening much faster. According to the discussion, E20 has had a noticeable impact in less than 14 months, creating problems for manufacturers as well as dealers. Manufacturers have produced petrol cars according to earlier demand patterns, but consumers are increasingly looking at alternatives. As a result, dealerships are reportedly carrying around 50 to 70 days of petrol vehicle inventory, compared with the more normal 30 to 40 days.https://www.autocarindia.com/advice/which-petrol-car-to-buy-amidst-near-future-government-policies-on-ethanol-blended-fuel-501919
Maruti Suzuki Looks Toward CNG and AMT
One of the most important developments discussed is Maruti Suzuki’s possible move toward combining CNG with AMT technology in India. The reported plan is to introduce CNG AMT combinations in multiple models around the end of September or the beginning of October. The reasoning is straightforward: if customers are moving away from petrol, manufacturers need to make CNG vehicles more attractive.
AMT, or Automated Manual Transmission, uses an actuator and control unit to operate a manual gearbox automatically. The clutch pedal is removed for the driver, while the system determines when to change gears according to speed and driving conditions. This combination could be particularly useful in Indian cities, where traffic congestion is increasing and many buyers prefer automatic cars. Conventional automatic vehicles are generally more expensive, while CNG offers considerably lower running costs.
The idea is that customers could get the convenience of an automatic transmission along with the lower running cost of CNG. This could make CNG vehicles a stronger alternative to both petrol cars and some entry level electric vehicles.
The broader trend is already visible across the industry. Manufacturers are increasingly looking at petrol plus technologies rather than relying exclusively on conventional petrol engines.
CNG, Hybrid and EV Options Are Expanding
Several manufacturers are already increasing their focus on alternative powertrains. Kia is expanding its electrified portfolio, while MG has introduced plug in hybrid technology. BYD is also looking to expand its electric vehicle presence in India.
Tata Motors is reportedly considering CNG options for some larger vehicles, while Mahindra is putting greater emphasis on its EV lineup. CAFE norms are also increasing pressure on manufacturers to improve overall fleet efficiency, making it difficult for companies to depend heavily on conventional diesel vehicles. Hyundai is also planning additional electric vehicles for India, including smaller EVs aimed at the mass market. The result could be a market where petrol engines continue to exist but gradually become less important.
In hybrids, for example, the petrol engine remains part of the vehicle, but electric power can take over a significant portion of driving. Similarly, CNG vehicles continue to use an internal combustion engine but reduce dependence on petrol. So petrol engines are unlikely to disappear suddenly. Instead, their decline could happen gradually as customers move toward cheaper to run or more efficient alternatives.
However, manufacturers cannot change their production mix overnight.
Automobile factories depend on complicated supply chains. Parts suppliers can receive orders several months in advance, manufacture components and send them to factories according to the original production plan. Even if a manufacturer decides today to reduce petrol car production, existing component orders cannot simply disappear. That is why changing production lines and supply chains can take around three to six months.https://unbiasedpollkhol.com/
Heavy Discounts Could Be Coming
The biggest immediate challenge is what happens to the petrol cars already sitting with dealers.
Manufacturers and dealers are reportedly hoping that the Navratri and Diwali festive period will help clear some of this inventory. These are traditionally strong months for automobile sales in India.
Heavy discounts could therefore become an important tool for clearing older petrol stock.
There are reportedly around 20,000 to 30,000 older vehicles from 2025 or earlier still sitting with some dealers. These cars could receive particularly attractive discounts because newer model year vehicles may be available at similar prices.
However, not every petrol vehicle will necessarily receive massive discounts. The deepest offers are more likely to apply to old or slow moving inventory. CNG and EVs are in a completely different situation. Their stock is reportedly around 10 to 12 days in some cases, and several models are already experiencing waiting periods. This creates an unusual situation: petrol vehicles are sitting in stockyards while some CNG and electric vehicles have waiting periods.
The automobile industry may therefore put increasing pressure on the government for support, including possible GST adjustments or other incentives. Manufacturers are also dealing with higher component costs, expensive imports and currency related pressures. Several important components, including certain hybrid systems and automatic transmissions, are imported.
The coming festive season will therefore be crucial.
If manufacturers successfully reduce petrol production while increasing CNG, hybrid and EV production, the inventory problem could gradually ease. But if petrol production continues at the same pace while demand remains weak, dealership stock could become an even bigger problem.
The petrol engine is unlikely to die overnight. But India’s automobile market is clearly moving toward a multi fuel and electrified future, and manufacturers that adapt quickly could be better positioned for the next phase of the market.