Those planning to buy a new car in the near future can surely think upon preponing their purchase date, as car makers are ready with petrol cars, subjected to heavy discounts. However, buyers eyeing on the diesel models like the Verna sedan or Swift hatchback have to wait further for about eight to ten months, before they are delivered. The move has been incorporated in spite of the crippling slowdown in the auto sector, caused due to the high interest rates and adamant fuel prices.
Maruti Suzuki, Hyundai Motor and Volkswagen cars dealers are struggling as they have been inundated with bookings for diesel models, while desperately trying to trigger sales of petrol cars. Discounts ranging between Rs. 18,000 and Rs. 44,000 have been offered on petrol cars. As a matter of fact, the leading car companies such as Maruti Suzuki and Hyundai Motor are witnessing a shortfall in diesel engine capacity.
The adversity has emerged as a result of a series of revisions in petrol prices this year. From Rs. 58.37 a litre in January 2011, the price of petrol has plunged to Rs. 66.84 a litre at present, marking a 14 per cent increase. In the national capital region like Gurgaon, Faridabad, Noida and Greater Noida, petrol comes for Rs. 73.55 per litre due to the additional taxes levied by both Haryana and Uttar Pradesh governments. Moreover, diesel has followed the footsteps of its counterpart by currently being available at Rs. 40.91 per litre, compared with Rs. 37.75 in January 2011, a hike of eight per cent.
The disparity in the prices of the two fuels has adversely affected the sales of petrol cars. While the petrol car sales have stooped down as much as 15 per cent during April and October 2011, diesel car sales are heading towards the opposite direction, witnessing an increase of 21 per cent.
It is important to note that the diesel consumption is not proportionate to the diesel car sales, according to petroleum planning and analysis cell (PPAC). It stated that the diesel consumption has decreased by as much 17 per cent between the time period of April and September 2011.
According to R.K. Singh, Chairman of Bharat Petroleum (BPCL), “Diesel consumption in a very strong way is related to slowdown in GDP growth and another reason being high interest rates. Even if you look at the past, diesel growth (consumption) is directly linked to economic growth.”
Diesel cars, responsible for 31- 32 per cent of the overall car industry sales in April 2011, now contribute as much as 48-50 per cent, said Shashank Srivastava, Chief General Manager, Marketing at Maruti Suzuki. Earlier this year, analysts envisaged that the diesel cars may account for half of overall car sales by next three years.
“Even for Maruti’s models that have both diesel and petrol options, ratio for diesel has gone up to 85 per cent as compared with 65 per cent two months ago,” Srivastava added. “Our expectation was of selling 8,000 diesel cars a month, but the demand has been much more. This is the reason for huge waiting period on i20 and Verna,” a Hyundai Motor India spokesman said.
Thus, car makers will make the best possible effort to push the sales of petrol cars, with great intensity, which has discouraged the car industry for a long time.
