Indian car buyers already prefer the diesel due to its affordability, as the fuel is cheaper than petrol. The recent price hike in the price of petrol has further heated up the argument regarding the better option amongst the two fuels. According to car dealers, the hike has further strengthened the demand for diesel cars in the country as it has broadened price difference between the two to almost Rs. 30 per litre. They said that the raise has reinforced the belief of consumers that diesel cars are more affordable to run. The government's move of first decontrolling and then raising petrol prices has turned the tide towards diesel run cars.
As per the director of a dealership handling a large domestic car maker, the shift towards the diesel cars has been happening since the past three years. He elaborated on this, saying that every car maker which launches a new car now also presents the diesel variant of the same. On condition of anonymity, he revealed, "It's not the cost difference between petrol and diesel alone that has influenced the buyer preference; diesel engine technology has improved significantly leading to better fuel efficiency." The amalgamation of several factors added to the popularity of diesel cars, which now have a higher waiting period on booking. He said that the recent petrol price rise and speculations about this hike not being the end of it may make the wait longer.
According to industry reports, almost 50 per cent of the total sales volume is generated by the diesel segment, which consists of hatchbacks, sedans, Sports Utility Vehicles (SUV) and Multi Utility Vehicles (MUV). The sales of petrol cars dropped during FY 2011-12 by around 15 per cent, while the diesel car sales reported a growth of 35 per cent. The country's largest car manufacturer, Maruti Suzuki, said that the distribution ratio was 55 per cent and 45 per cent, respectively, for the petrol and diesel cars out of 66,000 vehicles sold during 2011-12 in Pune.
Director - Principal, DSK Toyota Motors - a Toyota dealer in Pune, Shirish Kulkarni, said that conditions favoured diesel over the past few years and the demand for diesel vehicles may strengthen in the future. He stated, "In 2010, 60% of the cars they sold were diesel version; in 2011 the proportion rose to 65 and currently it is at 70%."
According to him, the benefits of diesel variants are lower running and maintenance costs, coupled with better mileage. However, he mentions that the diesel cars do not suit everyone's requirements. He commented, "There is a price difference of nearly Rs. 1 lac between the petrol and diesel versions of a car. Additionally there is an interest cost on this difference. One will have to run the car at least 80 km to benefit from the price difference and mileage."
As per Aniruddha Bhagwat, Head - Sales, Audi, the high end segment of the car market has been witnessing the demand models for diesel for a long time, with their sales accounting for 80 per cent of the total volumes. He said, "The tilt for diesel version in low and mid segments often comes as a shock reaction to a petrol price increase. In high end the decision about the fuel version is price inelastic as most consumers go for diesel version for the sheer power it lends to the vehicle."
