Diesel car sales to pick up with cheaper fuel, feel dealers in Indore

  • HT Correspondent, Hindustan Times, Indore
  • Updated: Aug 02, 2015 17:14 IST

With the recent price cuts further increasing the gap between the price of diesel and petrol, car dealers are now expecting customers to once again opt for diesel vehicles.

In 2011-12, the price difference between petrol and diesel had increased to Rs 30 due to steep a hike in petrol prices while the government kept diesel prices low to check inflation. However, after diesel was deregulated in 2014, that difference narrowed down to about Rs 10 per litre, adversely impacting sale of diesel vehicles.

“Sale of diesel cars outnumbered that of petrol cars in 2011-12, but then the ratio came down to 70/30 in favour of petrol cars last year. However, the trend has reversed again and the sales ratio is expected to touch 50/50 in the coming months,” said Rahul Jain of Sanghi Brother, a city-based Tata Motors dealer.

In the past few months, the fall in diesel prices has been much sharper than petrol prices, and the gap has now increased to about Rs 18 per litre.

While diesel prices are lower, diesel vehicles cost more than their petrol counterparts, which plays a role in the buy-decision. According to an official of Patel Motors, a Maruti dealer in the city, “Another factor is that diesel engine is more powerful than petrol; so, it is a matter of affordability and requirement.”

Experts say the SUV segment will continue to see high demand as people are now leaning towards bigger space and higher power.

“Rising diesel prices had only minimal impact on the demand for utility vehicles. The impact is more on passenger car sales in the small- and mid-range categories,” said used-car dealer Kishan Kandelwal.

In 2014, the waiting period for some popular diesel models like Swift Dzire, etc, had come down but the demand has picked up again, say dealers. The impact of diesel price fluctuation on sales also varies from company to company.

Some vehicle manufacturers more focused on the SUV segment, have seen impact to a lesser degree.

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