Why petrol cars will continue to beat diesel even with high fuel prices

Petrol cars are not dying. And they will never be dead as long as the fuel exists. In fact, the trends for 2013 show that buyers are shifting back to petrol cars in the past few months, and the thirst for diesel is actually ebbing. Petrol cars, by virtue of them being far cheaper continue to outnumber diesel cars.

We took a look at the trends in the past eight months, since the beginning of this year, to see if there was still a clear shift to diesel, with the constant fuel price hikes. However, because diesel too has become expensive with a steep price hike last year and another hike expected in the next few weeks of about Rs. 3 to Rs. 4 per litre, diesel cars have been seeing limited demand. Also diesel cars are far more expensive and hence sell in lower volumes, when you look at all cars under the Rs. 25 lakh price bracket. Also see: Will diesel cars still make sense once diesel prices rise?

Sales figures: SIAM/Industry figures/Team-BHP

The car makers who are selling the most though are those who sell both petrol and diesel engine cars within the same model – like the Maruti Swift for example. Among cars that sell both fuel choices, it is the highest selling. Among petrol-only cars, the Maruti Alto continues to be the highest selling, while among diesel only cars, the Mahindra Bolero is the highest selling vehicle month on month. Also read: Why diesel cars give more mileage than petrol cars?

Why petrol cars will continue to sell

The cheapest petrol car available in India right now is the Tata Nano, with prices starting at Rs. 1.5 lakh. The cheapest diesel car on the other hand is the Tata Indica EV2 L priced at Rs. 4.01 lakh! The next available cheap diesel cars are the Tata Vista TDI, Chevrolet Beat diesel and the Ford Figo diesel, all priced above Rs. 4.5 lakh. Hence, the larger segment of buyers who drive less than 20-30 km a day will continue to buy a petrol car, as the breakeven time now, with diesel prices catching up with petrol (the priced difference is down to about Rs. 18 per litre), is going to increase even further. Also read: Diesel or petrol – which fuel is more environment friendly?

Diesel cars sales stay flat

Look at the trends in the past few months and you will see that sales of petrol only and petrol-diesel car models has gone up in the past three months, while diesel only models have remained rather flat in terms of sales. Among those who sell both petrol and diesel cars, the ratio of petrol to diesel cars has come down. Diesel cars at the beginning of the year used to account for nearly 80% of sales among cars where both petrol and diesel was available. That has come down to 60% now, according to car makers we spoke with at a recent SIAM event.

With complete fuel price deregulation, even for diesel on the cards, diesel prices will soon catch up with petrol by next year, after the General Elections. Premium diesel is already fully deregulated and is priced close to petrol at about Rs. 70 per litre. It’s a different matter that petrol pumps say that premium diesel sales are all but dead, ever since prices were hiked. Also see: How to get maximum mileage from your diesel cars

Also see: Petrol fuel economy advice!