India’s road transport minister on Tuesday warned local and foreign automakers to either cut production of polluting diesel vehicles or face higher taxes and levies, setting alarm bells ringing in the world’s third-largest car market. From a report: Here are some facts about India’s automotive market, the biggest after China and the United States, where players such as Maruti Suzuki, Tata Motors and foreign giants such as Mercedes and Volkswagen operate. In India, about four million passenger vehicles were sold in the fiscal year that ended in March, according to data from the Society of Indian Automobile Manufacturers.

Petrol vehicles have been the top sellers in recent years — increasing their market share to around 68.4% in January-July 2023 from 42.5% in 2014, according to data from automotive market intelligence provider JATO Dynamics. Cost-conscious Indians are preferring to buy petrol cars as they are cheaper than diesel, even though diesel cars offer better fuel efficiency. In the luxury segment, though, which includes cars and SUVs made by Mercedes, BMW and Audi, petrol variants have accounted for 62% of sales so far this year, down from 68% in 2021, according to JATO Dynamics.

Tuesday’s warning from minister Nitin Gadkari targeted diesel carmakers, whose market share has seen a steady decline to nearly 18% of passenger vehicles in January-July this year from 47.9% in 2014. But when it comes to luxury cars, diesel variants remain in vogue, with their market share rising to 33% so far this year from 31% in 2021.