Petrol Cars in Demand Again due to rising Diesel Prices

Ever since the Government of India decontrolled the fuel prices, the gap between petrol and diesel prices started narrowing, which has brought buyers' shift back to petrol run vehicles. As against the peak 78% difference in fuel prices last year, the gap has now come down to 20%. Moreover, the diesel variants cost about 15-20% more than the petrol variant of the similar car, which is one more reason why people are moving towards petrol run vehicles. So, Indian car makers are now reconsidering their production strategy to meet the petrol cars demand.

As per a report published on ET, the surge in petrol car demand has brought some models in the waiting list. In fact, petrol cars accounted for over 57% of the total sales in April, recording a hike of 4 per cent. And it is expected to increase even further. General Motors is recalibrating its production plans, as the petrol car sales have gone almost double in recent months. In past one year, the total sales of petrol hatchbacks and sedans have grown 35% from 20%.

Speaking about the same, P Balendran, VP (Corporate Affairs), General Motors India said, "We have flexible production for both the fuels at our Halol plant. To meet the escalating demand for petrol, we are increasing production of these cars in line with the changed customer preferences." He further said that GM is selling more petrol variants of the new Sail Sedan, and the waiting period for the petrol run Sail Sedan has gone to three months.

"In the past few months, petrol models are making a resurgence on account of reduction in price differential in fuel types that has led to a change in our production pattern," says Rakesh Srivastava, senior vice president (sales marketing), Hyundai Motor India. Petrol car production have now gone up to 65% from around 62% in 2012, while the rest 35% is of diesel cars. "But diesel models would continue to grow and constitute 40% of the passenger cars on the strength of many diesel models, good performance and strong marketing initiatives," Srivastava added.

Honda Car India, which has recently launched its first diesel car Amaze in the country, has also inspected demand growing for the Brio and City models in the past few months. Jananeshwar Sen, senior VP (marketing sales), Honda Car India says, "The market is steady for petrol cars. Both our volume models, City and the Brio hatchback, have been gaining numbers," .

Sales of entry level small cars including Alto, Eon and WagonR, which are available in petrol only variants, have escalated to 47,800 units in April 2013 over 44,380 units sold in the corresponding month, last year.