With the recent surge in diesel prices, the demand for petrol cars is gradually increasing, making a comeback in the Indian auto market. As according to Industry experts, the limited difference between the diesel and petrol prices has helped in increasing the demand for petrol cars. According to them, the petrol models of compact car segment and entry level sedan segment have witnessed a rise in demand, particularly because of increase in the diesel prices.
It must be noted that major car companies have reported an intensified demand. Commenting on the issue, Pawan Goenka, President of the Automotive and Farm Equipment Sectors for Mahindra & Mahindra said, “About a year ago, diesel and petrol had a 50:50 share of the passenger vehicle market but now the ratio is 58:42 in favour of petrol. This is around the same level that the auto market was two years ago and the mid-2011 to mid-2012 diesel penetration has been wiped out completely.”
The unprecedented shift in the fortune of petrol cars has helped aggravate demand for the cars, despite the slowdown. Expressing his views on the scenario, Maruti Suzuki's Chief Operating Officer for Marketing and Sales, Mayank Pareek was quoted as saying, “Yes, there has been a change in the fortunes of the A-segment. Last year, the growth was in B-segment due to the diesel-petrol difference and the growth was primarily in diesel. The overall market grew 2 per cent but diesel grew 23 per cent last year while petrol declined 16 per cent." But from September 2012, that trend started to change and by mid-November, diesel had started to slow down. "Currently the situation is that both are in decline - for the last 26 months, petrol vehicles have been declining in demand while diesel has been declining for the last seven months."
He further told that the small car market is reviving with Alto 800, A-star and WagonR models, registering a considerable increase in their sales during the month of July 2013. Adding about the decreasing demand for diesel cars, Pareek said "In passenger cars, the diesel share, which had peaked at 61%, is now coming down steadily and diesel, which was actually growing well last year is now facing de growth while petrol is seeing slower de growth.”
Meanwhile in the utility vehicle segment, which had earlier seen a huge demand for diesel cars, has also been impacted with the new trend that the Indian car industry is going through. Explaining about it, President for Automotive and Farm Equipment Sectors at Mahindra & Mahindra, Pawan Goenka said, "M&M's sales have been affected because UVs are now going down. Some of the petrol diesel shift that happened earlier was from petrol cars to diesel SUVs, which has now slowed down.” He also told that during the first quarter of the current financial year, the growth of utility vehicles dropped particularly because of steep excise duty that the companies are now burdened with.
