Sales of petrol cars have overtaken their diesel variants after a gap of about 25 months spurred by a steady rise in the price of diesel, which has shifted consumers' interest from costlier diesel variants to cheaper petrol cars. Car makers are again changing production patterns with a bias for petrol variants, as there has been a spurt in its demand recently, industry executives said. Only 42% customers bought diesel cars in the first quarter of this fiscal year compared to around 54% in the corresponding period previous year.
Oil companies have been steadily hiking diesel prices that have decreased the lucrative gap between petrol and diesel variants, two senior executives working in leading automobile companies said requesting anonymity. In January, the government allowed state oil firms to raise diesel rates in small doses until retail prices are aligned with international rates, which shifted consumers' interest from diesel to petrol cars.
"Petrol cars are now back on consumers consideration. The market scenario is changing with consumers coming back to petrol models and we have seen a gradual swing for Verna and i20 variants," Hyundai Motor India senior vice president (marketing & sales) Rakesh Srivastava said.
According to industry data, auto manufacturers posted 12.5% increase in petrol cars sales last month, which happened at a time when automobile sector is facing a sluggish demand. But the fall in the sale of diesel cars is much sharper, automobile executives said.
Despite the muted market conditions, a positive trend is seen in sales of petrol vehicles last month on the back of rising demand for smaller entry-level cars like Maruti Alto, WagonR and Hyundai EON, they said. But, diesel car sales in July for models like Honda Amaze and Maruti Dzire have been dropping in recent months.
Fuel consumption data corroborate the changing trend. Although, the overall consumption of petroleum products including diesel sales had a negative growth in June this year, petrol consumption has shown a positive growth, the oil ministry's data-keeper, Petroleum Planning & Analysis Cell (PPAC) said in a latest report.
"There has been a growth of 5.5 % in the consumption of petrol in June, compared to an abnormally high growth of 31.2% during May, 2013. But, diesel consumption in June recorded a negative 1.9% growth," an official in PPAC said.
Consumption of petrol jumped by about 13% in April-June quarter this year while the growth of diesel was only 0.6%, the official said. But, PPAC officials cautioned that the trend could be reversed as the gap between diesel and petrol rates are increasing again because of sharp rise in international prices of the fuel and unprecedented depreciation of the rupee against the dollar.
"While there has been a recent shift towards petrol due to price changes, we are expecting both petrol and diesel to sell in equal ratios and stablise in the long term," says Maruti Suzuki's Chief Operating Officer (marketing and sales) Mayank Pareek.
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