Alternative fuel passenger vehicles, CNG, hybrid and electric models among them, outsold petrol powered cars in India for the first time in August, according to the Federation of Automobile Dealers Associations (FADA).
These vehicles made up nearly 42 percent of passenger vehicle sales during the month, just ahead of petrol at about 41 percent. FADA, which represents dealers of India’s leading car and two wheeler makers, credits the shift to two things: lower running costs on alternative fuel vehicles, and growing unease among buyers about the country’s move to E20 petrol.
That move, a switch from E10 to a blend containing 20 percent ethanol, is meant to cut India’s reliance on imported crude. But the mandate, in force since last year, hasn’t landed well with everyone. Owners of older vehicles in particular worry that the higher ethanol content could hurt fuel economy and engine performance, and the issue has turned into one of the biggest political flashpoints for Prime Minister Narendra Modi’s government in the world’s third largest car market. The government has pushed back on the criticism, calling it “wild claims” and telling people not to “fall for rage bait.”
FADA summed up just how fast things have moved: “A little over a year ago petrol led this contest by nearly 11 percentage points; that lead has now been erased.”
Overall, India’s automobile retail sales climbed 17.5 percent year on year in August to 2.4 million vehicles, with two wheelers and passenger vehicles driving most of the growth.
Market Research Outlook: Petrol losing its lead to alternative fuel vehicles is a real turning point for India’s auto market, and it’s happening as much because of doubts over fuel policy as the usual pitch around cost savings and sustainability. If E20 concerns don’t ease, automakers with strong CNG and hybrid lineups could end up gaining ground faster than pure EV players, especially with India’s charging network still catching up. Expect fuel policy, engine compatibility and running costs to keep shaping how India’s passenger vehicle market moves for the rest of the fiscal year.
