India's Passenger Vehicle Market Sees Petrol Share Drop Below 50% in August

The share of petrol-fuelled vehicles in India's passenger-vehicle market has fallen below half to 48.1 per cent in August 2026, down from 51.9 per cent in the previous year. According to market data, concerns surrounding the transition to E20 petrol have influenced customer purchase decisions, as previously predicted by the Federation of Automobile Dealers Associations (FADA).

The overall passenger vehicle market grew by 14.9 per cent year-on-year in August, with registrations crossing 3.9 lakh units. Amidst this growth, alternative powertrains gained significant ground. Nearly one in three new passenger vehicles now runs on CNG or a battery. Combined with strong hybrids, alternative powertrains accounted for 34.8 per cent of passenger vehicle retails in August 2026, compared to 29.9 per cent in August 2025.

Maruti Suzuki retained its market lead with 1.64 lakh units, while Tata Motors grew the fastest among the six major manufacturers tracked, recording 57,357 units. Tata's market share rose to 14.7 per cent in August 2026 from 12.1 per cent in August 2025, narrowly outpacing Maruti's gain to 42.1 per cent from 39.6 per cent. Kia registrations also rose by 16.6 per cent year-on-year to 23,162 units.

Meanwhile, manufacturers with heavier petrol and diesel portfolios experienced slower relative growth. Mahindra saw a 4.4 per cent increase in registrations, but its market share slipped to 12.7 per cent from 13.9 per cent. Hyundai recorded a 4.2 per cent uptick in registrations, while its share declined to 11.9 per cent. Toyota was the only major manufacturer among the six to record an absolute fall in registrations.

Industry experts attribute the powertrain diversification to long-term economic considerations and maturing ecosystems. Hemal Thakkar, Senior Practice Leader and Senior Director at Crisil Intelligence, noted that consumer preference for cost-efficient mobility, a maturing CNG ecosystem, and increasing EV acceptance are driving the change. Factory-fitted CNG portfolios, such as Tata's twin-cylinder technology and Maruti's wide range of models, have successfully helped transition CNG beyond traditional fleets into mainstream family cars.

Despite the strong year-on-year growth, sequential retail registrations dipped by 6.6 per cent in August. Analysts attribute this monthly contraction to normalization following a stronger July, inauspicious periods in southern states, and consumers postponing purchases ahead of the upcoming festival season.

"The shift away from traditional petrol vehicles highlights how rapidly consumer preferences are evolving in response to regulatory changes and long-term economic considerations. Automakers that have successfully diversified their portfolios with factory-fitted CNG and electric options are capturing market share more effectively. For the broader industry, this trend underscores the necessity of adapting to alternative powertrains to remain competitive in a changing market landscape." — Dr. Shishir Gupta, Founder & CEO, StartupLanes