In a declining market for diesel cars, Mahindra and Mahindra (M&M) accounts for every second diesel-powered car sold in the country so far in 2025. Most other passenger vehicle (PV) manufacturers have seen their share either decline or remain steady in the past three years amid a broader deceleration of diesel car sales.
The XUV700 and Thar maker dominates the diesel PV market, with its share projected to increase to 56 per cent this year, from 53 per cent in 2024 and 34 per cent in 2022, according to Equirus Research data.
M&M’s rising share reflects the consolidation of the diesel segment around a handful of manufacturers continuing to offer the powertrain, even as the domestic car market pivots toward petrol, CNG and electrified alternatives. The share of diesel has fallen to 18 per cent in 2025 from a high of 33 per cent in 2019. Queries emailed by ET to M&M didn’t elicit a response till press time.
“Globally, diesel is losing ground, but India remains an outlier. For Indian buyers, diesel still delivers the ideal mix of power and low running costs, and the narrowing petrol-diesel price gap has boosted its appeal. Rising SUV (sport utility vehicle) demand is pushing diesel’s share even further,” said Puneet Gupta, director, S&P Global Mobility.
He added, however, that “over-reliance on diesel could be risky”. It’s a sunset technology, upgrades due to stricter emissions will get costlier and industry investments are shifting towards hybrids and electric vehicles (EVs). Deep supplier or capacity investments in diesel now carry mid-term risk.
“India must balance demand and supply of diesel vehicles carefully to avoid future shocks for our automotive partners,” said Gupta.
M&M’s market share gain in diesel has been driven by consistent demand for its SUV-heavy portfolio including the Scorpio-N, Thar and XUV700 models, which continue to find merit in semi-urban and rural markets, where diesel is preferred for its torque advantage, fuel economy and suitability for heavier, highway-oriented vehicles.
In contrast, former diesel leaders Hyundai and Kia have seen their market shares drop. Hyundai’s diesel share has fallen to 14 per cent this year, from 22 per cent in 2019, after it discontinued diesel variants in several popular models, according to Equirus Research. Kia, which initially built momentum on diesel models like the Seltos, held a 27 per cent share in 2021 and 2022, which is expected to fall to 11 per cent this year as the segment continues to shrink.
Tata Motors, too, is expected to lose ground in the segment, with a decline in its share to 8 per cent in 2025 from 14 per cent last year. Its intermediate performance reflects an accelerating shift towards CNG and EVs in its portfolio.
While Maruti Suzuki no longer has a presence in the diesel segment, Honda and Toyota contribute marginal diesel volumes as they continue to move toward petrol, hybrids and EVs.
India’s diesel passenger vehicle market has contracted sharply since implementation of stricter Bharat Stage VI emission norms from April 2020 because of higher costs of after-treatment systems, besides regulatory pressures and shifting consumer preferences.
Even within the SUV segment-once the stronghold of diesel-the shift towards alternative powertrains is evident as manufacturers streamline offerings and expand hybrid and EV options.
The industry’s long-term growth will depend on how effectively M&M transitions its strong petrol and diesel portfolio into hybrid and electric platforms as India’s powertrain mix evolves, said analysts.
