Automakers widen powertrain bets

Automakers are expanding their powertrain options in India as the dominance of petrol fades. MG recently introduced an SUV with both plug-in hybrid and electric powertrains, while Skoda plans to bring the diesel Superb back to the market. Hyundai is broadening its CNG portfolio and gearing up for new electric vehicles, and Maruti Suzuki continues to support CNG alongside other choices.

This development indicates that India's automobile market is entering a phase where traditional petrol vehicles are losing their monopoly, but car manufacturers are not narrowing their focus. Instead, they are broadening their powertrain bets, offering a range of alternatives such as CNG, diesel, hybrids, electric vehicles (EVs), and plug-in hybrids (PHEVs). The competition is intensifying across various segments, including the mass market.

The transition is being driven by factors such as the move towards ethanol-blended petrol and automakers' strategy of hedging their bets rather than committing to a single successor to petrol. JSW MG Motor India's managing director, Anurag Mehrotra, stated that the future of mobility will not be defined by a single technology solution but by providing customers with the freedom to choose the pathway that best suits their needs.

Ravi Bhatia, president of Jato Dynamics, described the situation as a transition from a dominant powertrain to a much more fragmented market, emphasizing that car manufacturers are investing in optionality. However, this optionality comes with costs, as companies must invest today for several potential versions of tomorrow.

The uncertainty surrounding consumer preferences is already affecting product planning within the industry. A senior executive at a carmaker explained that it is no longer safe to assume that one technology will dominate across segments. Buyers, depending on their usage and location, may have varying requirements, making it challenging to predict the future.

This shift is evident in the market, where petrol's share has declined in recent years, but buyers have not uniformly migrated to a single alternative. Instead, CNG has gained ground, diesel remains relevant, EVs are growing in popularity, and hybrids have carved out a significant niche. Dealers have reported that customers are increasingly inquiring about different technologies based on their specific needs and usage patterns.

The decision-making process is complicated, as engine programs, battery capacity, platforms, and supplier investments must be planned years in advance, even as consumer preferences continue to evolve.

While China provides a glimpse into how unpredictable this path can be, India's shift away from petrol may not follow a straightforward trajectory. For now, automakers are maintaining multiple technologies and waiting for the market to determine the most suitable path forward.