Diesel vehicles saw strong growth, particularly in the SUV segment, as buyers continued to value their efficiency and performance for long-distance travel.Gujarat’s passenger vehicle market recorded strong growth in FY2026, expanding by over 11 per cent, but the momentum was driven more by a diversified fuel strategy than a decisive shift toward clean mobility. Latest registration data from the Union ministry of road transport and highways shows total car sales rising from 3.47 lakh units in FY2025 to 3.86 lakh units in FY2026, reflecting changing buyer priorities anchored in cost, performance, and usage patterns. Diesel vehicles emerged as one of the biggest contributors to growth, adding nearly 11,800 units year-on-year and posting an estimated 16 per cent increase despite expectations of a gradual phase-out. Industry experts attribute this resilience to sustained demand for SUVs and larger vehicles, where diesel engines continue to offer superior torque, fuel efficiency, and highway performance.
“A strong preference for SUVs is driving diesel demand. Buyers who frequently travel long distances still see diesel as the most practical option,” said an Ahmedabad-based dealer. Rather than a comeback, diesel appears to be retaining relevance in specific segments where its advantages remain unmatched.
SUVs continue to gain popularity across Gujarat as families increasingly opt for long-distance road travel. Buyers who once preferred sedans are now choosing SUVs for better comfort, space, and driving confidence on highways. A growing ownership pattern involves households maintaining one SUV for travel and another car for daily urban use. In this mix, diesel SUVs remain a favoured choice despite higher upfront costs.
Petrol-CNG vehicles also recorded strong growth, increasing by over 14 per cent or more than 18,000 units. With fuel prices remaining high, urban and semi-urban buyers are gravitating towards CNG for its lower running costs while retaining conventional drivetrains. This further reinforces Gujarat’s position as India’s strongest CNG vehicle market.
Electrified segments posted sharp percentage gains, with diesel hybrids growing 55 per cent and hybrid EVs rising 36 per cent. However, their absolute volumes remain limited. According to Pranav Shah, chairperson of FADA Gujarat, hybrids are gaining acceptance as a middle path amid EV adoption challenges, though higher costs and limited model availability continue to restrict wider uptake.
Petrol-only vehicle sales dipped marginally, indicating gradual churn rather than structural decline. Overall, the data points to a market evolving in multiple directions, where consumers optimize fuel choices based on cost, performance, and usage rather than making a uniform shift toward electrification.
