As diesel car sales slow across India, Mahindra and Mahindra has bucked the trend, commanding a share of the shrinking segment. SUV-led demand has strengthened its position even as rivals retreat and the market pivots towards petrol, CNG and powertrains
Even as diesel car sales continue to slow in India, Mahindra and Mahindra (M&M) has emerged as the clear leader. In 2025 so far, every second diesel passenger vehicle sold in the country is from Mahindra. Most other carmakers have either lost market share or seen no growth over the past three years as diesel demand weakens.
Market share rises despite shrinking segment
Data from Equirus Research shows that Mahindra’s share of the diesel passenger vehicle market is expected to rise to 56% in 2025. This is up from 53% in 2024 and 34% in 2022. During the same period, diesel’s overall share in India’s passenger vehicle market has fallen sharply, dropping to about 18% this year from 33% in 2019.
Diesel demand narrows to few manufacturers
Mahindra’s growing share highlights how the diesel market is shrinking and becoming concentrated among a handful of manufacturers that still offer diesel engines. The broader car market is steadily moving towards petrol, CNG and electric vehicles, even as diesel retains a niche appeal.
Why diesel still appeals to buyers
Puneet Gupta, director at S&P Global Mobility, said that although diesel is losing relevance globally, India remains an exception. Diesel continues to offer a balance of strong performance and lower running costs. A smaller price gap between petrol and diesel, along with rising demand for SUVs, has helped sustain diesel sales.
However, Gupta warned that depending too much on diesel could be risky. He said diesel is nearing the end of its lifecycle, emission upgrades will become costlier, and industry investment is increasingly shifting towards hybrids and electric vehicles. Careful planning is needed to avoid future supply-side challenges.
SUV-led portfolio drives Mahindra’s growth
Mahindra’s gains have been driven by steady demand for its SUV-heavy portfolio, including the Scorpio-N, Thar and XUV700. These models remain popular in semi-urban and rural markets, where diesel is preferred for its high torque, fuel efficiency and ability to handle long-distance and heavier use.
Rivals lose share in diesel segment
Former diesel leaders have seen their positions weaken. Hyundai’s share of the diesel passenger vehicle market has dropped to 14% this year from 22% in 2019 after it discontinued diesel variants in several models. Kia, which once built its presence around diesel versions of the Seltos, is expected to see its share fall to 11% in 2025 from 27% in 2021 and 2022.
Tata Motors is also expected to lose ground, with its diesel share slipping to 8% in 2025 from 14% last year, reflecting its growing focus on CNG and electric vehicles.
Limited diesel presence across industry
Maruti Suzuki has exited the diesel passenger vehicle segment entirely. Honda and Toyota continue to sell small diesel volumes but are steadily shifting towards petrol, hybrid and electric powertrains.
Regulations accelerate diesel decline
The diesel passenger vehicle market in India has contracted sharply since stricter Bharat Stage VI emission norms came into effect in April 2020. Higher compliance costs, regulatory pressure and changing consumer preferences have all contributed to the decline.
Even within the SUV segment, once dominated by diesel engines, manufacturers are increasingly offering petrol, hybrid and electric options.
Transition key to future growth
Analysts say Mahindra’s long-term prospects will depend on how effectively it transitions its strong petrol and diesel lineup to hybrid and electric platforms as India’s vehicle powertrain mix continues to evolve.
