Petrol car demand on the rise due to increase in price of diesel

Last year has been a roller coaster ride for car manufacturers in India, who were trying to figure out their future strategy based on the huge price gap prevalent on petrol and diesel fuel. Thanks to this gap, demand for diesel powered cars was increasing while that of petrol cars was declining.

Petrol car demand on the rise due to increase in price of dieselThe current price gap has seen prices of petrol and diesel reducing. And the fact that diesel cost 15 to 20% more than their petrol counterparts, has led to an increase in demand for petrol engined vehicles in the past few months. Waiting periods for petrol cars have seen an increase, while companies are augmenting their production capacities to once again roll out more petrol cars to meet this increased demand, reports ET.

The de-control of diesel has also bridged the price difference between petrol and diesel bringing it down to INR 13.50. This shift of demand back to petrol cars has got auto manufacturers such as Maruti Suzuki India, Hyundai Motor, Honda Cars, General Motors India, Ford India, Volkswagen and Renault-Nissan in a tizzy as they had invested huge sums of money in setting up plants for diesel engines. This switch in fuel preferences at a time when auto sales in the country are going through their worst ever decline streak (seven months and counting), has caused further complications for auto companies.

General Motors is one such company that has had to augment production of petrol cars due to the fact that sales of this have doubled. Petrol variants have seen an increase by 20 to 35% which has caused a waiting period of three months for the recently launched Sail sedan. Auto dealers across the country are unanimous in their view that petrol models are back in demand thus resulting in increased sales in recent months.

Petrol car demand on the rise due to increase in price of diesel (2)