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Old 2nd July 2010, 01:01   #1
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Default Diesel deregulation effect on specific car models.

With the expected deregularisation of diesel prices, the artificial price difference of petrol and diesel will gradually reduce. Petrol is still expected to remain costlier than diesel but the gap will come down very significantly.
Such a scenario will not be desired by several car manufacturers whose product line up places a great emphasis on diesel economy. As diesel cars usually carry a price premium of atleast a lakh over their petrol counterparts, the advantages of these primarily diesel hatches will be significantly reduced. Unless these hatches have a competitive petrol engine, they might find the going tough, with sales reducing considerably.

Some of the cars which come to my mind.

Tata Indica Vista: A car which is going to be the worst hit. Have always been identified as a diesel hatch. Besides the petrol version has a very unconvincing petrol engine. With the known issues with A** people will be more than happy to shift to a i10 and its ilk.

Ford Figo : Has an excellent diesel engine but a not-up-to the market standard petrol.Ford will be forced to offer better petrol engines.

Fiat Punto: Again a good diesel but inefficient petrol engine. People might kill me for saying this but the new K and kappa engines deliver almost equal power with better fuel efficiency. Add excise benefits and it makes a closed case for better engines. Makes an even better case for the 1.4 T-jet on the Punto!!

Thus manufacturers who might have never offered good petrol engines ,might be forced to offer world-class petrol engines. Also agreed that folks who do high mileage might still stick with diesel. People on the forum recommended that diesel cars make sense when one had a daily driving of 30 kms or more. Once that figure gets revised, some of the diesel crowd will no longer find diesel as appealing and will be more than happy to shift to petrol.

Last edited by coldice4u : 2nd July 2010 at 01:11.
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Old 2nd July 2010, 11:45   #2
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Diesel cars would still find many takers. 41.70% Of Team-BHPians who have participated in this poll say they would still buy a Diesel car if Diesel was priced closer to Petrol.
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Old 2nd July 2010, 12:00   #3
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Originally Posted by .anshuman View Post
Diesel cars would still find many takers. 41.70% Of Team-BHPians who have participated in this poll say they would still buy a Diesel car if Diesel was priced closer to Petrol.
The poll may be skewed. Offroaders and 'current' diesel owners may have there preferences 'already' toward diesel vehicles.

I feel, 'majority' of the market which purchases diesel for its economy will surely affect 'D' sales.

Bigger market for diesel, (means higher demand AND constant supplies), can increase the prices further. (may be more than petrol - im just guessing)
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Old 2nd July 2010, 12:35   #4
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Originally Posted by coldice4u View Post
With the expected deregularisation of diesel prices, the artificial price difference of petrol and diesel will gradually reduce. Petrol is still expected to remain costlier than diesel but the gap will come down very significantly.
Deregulation doesn't matter. EVen after diesel prices are deregulated, these will still be lesser than petrol due to differential tax

Last edited by Eddy : 2nd July 2010 at 13:04. Reason: Pl don't quote a long post
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Old 2nd July 2010, 12:46   #5
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The immediate impact of diesel - petrol price equivalence would be that cost of Diesel variants will come down drasticaly. Price differentials would come down to 10-18%.

My quick estimate is that current price differential on OTR between petrol and diesel variants is about 25-35%).

Oh, to put it differently, the price difference would be less than half of what it is right now.

I will make up my mind after that. :-D
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Old 2nd July 2010, 12:57   #6
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It is indeed good news, we will see more competition among car makers for the petrol engines & eventually good news for enthusiast. But I doubt if this would happen, there are too many bigshots who have a control over what the govt does
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Old 2nd July 2010, 13:10   #7
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Swift petrol: 113Nm @ 4,500rpm
Swift diesel: 190Nm @ 2,000rpm

Which version would you prefer for a typical Monday morning city drive?

Last edited by sandeepmdas : 2nd July 2010 at 13:12.
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Old 2nd July 2010, 13:29   #8
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Quote:
Originally Posted by .anshuman View Post
Diesel cars would still find many takers. 41.70% Of Team-BHPians who have participated in this poll say they would still buy a Diesel car if Diesel was priced closer to Petrol.
Even if for the sake of arguments we take this poll to be accurate and representative of the market (of course, there will be many who rightly say this is NOT the case, but let us keep that aside for now), this still shows a sign of danger for diesel cars. Only 41% saying they will stick to diesels regardless of price difference is not a very encouraging number. No manufacturer can afford to retain only 41% of the customers and letting others go away due to some change in operating environment and regulations. So I would say, yes, this is a major concern for diesel cars and I am sure all manufacturers are already busy figuring out their strategies to tackle this situation if and when diesel is deregulated.
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Old 2nd July 2010, 13:31   #9
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Quote:
Originally Posted by sandeepmdas View Post
Swift petrol: 113Nm @ 4,500rpm
Swift diesel: 190Nm @ 2,000rpm

Which version would you prefer for a typical Monday morning city drive?
As a BHPian Swift Diesel but as a common man I would pickup a Sift Petrol.
Reason being easy to maintain and future expandibility chances (Read CNG/LPG)
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Old 2nd July 2010, 13:41   #10
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Quote:
Originally Posted by sandeepmdas View Post
Swift petrol: 113Nm @ 4,500rpm
Swift diesel: 190Nm @ 2,000rpm

Which version would you prefer for a typical Monday morning city drive?
Me going OT.

It will depend on person really.
If you love revving >> Swift P;
U hate pushing throttle >> Swift D.

Moreover, Torque can be varied for a given power. (hope my physics is rite)
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Old 2nd July 2010, 14:05   #11
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Quote:
Originally Posted by coldice4u View Post
Tata Indica Vista: A car which is going to be the worst hit. Have always been identified as a diesel hatch. Besides the petrol version has a very unconvincing petrol engine. With the known issues with A** people will be more than happy to shift to a i10 and its ilk.

Ford Figo : Has an excellent diesel engine but a not-up-to the market standard petrol.Ford will be forced to offer better petrol engines.
Petrol-Diesel split for Indica and Figo is 10%-90% and 45%-55% respectively. The Figo petrol may not be great for enthusiasts, but it seems to be good enough for the mass market because of its VFM pricing. So I highly doubt if Ford will ever release a 'better' petrol 1.2L engine for the Figo.
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Old 2nd July 2010, 14:24   #12
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Quote:
Originally Posted by Dr.AD View Post
Even if for the sake of arguments we take this poll to be accurate and representative of the market , this still shows a sign of danger for diesel cars. Only 41% saying they will stick to diesels regardless of price difference is not a very encouraging number.
This sort of conclusions(the verbatim) are often seen in 24x7 news channels.

'Once a diesel, always a diesel' as successive advancement to the common rail technology is boosting both power and mileage and there is no compulsive motivation to return back to petrol.

PS: there is still no mass produced turbo petrol in India.
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Old 2nd July 2010, 14:27   #13
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Quote:
Originally Posted by .anshuman View Post
Diesel cars would still find many takers. 41.70% Of Team-BHPians who have participated in this poll say they would still buy a Diesel car if Diesel was priced closer to Petrol.
That is a significant number. For cars like the Vista with mostly Qjd sales, Tata would be in a very uncomfortable position. They just dont have a good engin6e to which people might shift to. Same goes for the other 2 cars i had mentioned, the Figo & GP.

Quote:
Originally Posted by BaCkSeAtDrIVeR View Post
The immediate impact of diesel - petrol price equivalence would be that cost of Diesel variants will come down drasticaly. Price differentials would come down to 10-18%.
My quick estimate is that current price differential on OTR between petrol and diesel variants is about 25-35%).
I dont know the kind of premium that manufacturers charge on their diesel versions over and above the manufacturing costs. Diesel engines are expensivet. I dont think price difference can be reduced by more than 50 %.

Quote:
Originally Posted by sandeepmdas View Post
Swift petrol: 113Nm @ 4,500rpm
Swift diesel: 190Nm @ 2,000rpm
Sandeep, one of the reasons the Swift is not on my list is because of the excellent engines that it has to offer for both P & D versions.

Quote:
Originally Posted by Dr.AD View Post
Even if for the sake of arguments we take this poll to be accurate and representative of the market (of course, there will be many who rightly say this is NOT the case, but let us keep that aside for now), this still shows a sign of danger for diesel cars. Only 41% saying they will stick to diesels regardless of price difference is not a very encouraging number. No manufacturer can afford to retain only 41% of the customers and letting others go away due to some change in operating environment and regulations. So I would say, yes, this is a major concern for diesel cars and I am sure all manufacturers are already busy figuring out their strategies to tackle this situation if and when diesel is deregulated.
Absolutely right. This is not about diesel vehicles per se, but rather about the effect on specific car models. For eg, maruti needs to be least bothered as the Swift & the Ritz have excellent petrol engines to offer just in case diesel sales decrease.

Quote:
Originally Posted by ashthedivx View Post
As a BHPian Swift Diesel but as a common man I would pickup a Sift Petrol.
Reason being easy to maintain and future expandibility chances (Read CNG/LPG)
From a common mans pwrspective,why should i spend a lakh more to get a diesel when i will have to drive longer to recover the costs. Such a thought will give several manufacturers sleepless nights. As i had said in my post diesel will continue to sell but, i would like to have a model-specific discussion.
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Old 2nd July 2010, 14:27   #14
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Thanks Coldice4u for creating this thread. Few days back when the news of Diesel prices deregulated came out I also had the same query and posted in another ongoing thread which is closed now

If the price gap reduces between petrol and diesel, there will definitely be a effect on diesel vehicle - sales or may be pricing too. In general, diesel cars are considered for high usage and more mileage, so people with high usage recovers the extra price paid over a period of time taking into effect the less diesel price too. Reduced price gap of fuel will only increase that price recovery time, so there will be second thought by many prospective diesel car buyers.
In Hatchbacks, difference of diesel and petrol variant of same car is around 80K - 1.25L.
This difference is more pronounced in Hyundai cars - i20 diesel and petrol.
So if price comes down for diesel vehicles, guess Hyundai will be badly affected, as i10 and i20 prices of some models already overlap and if diesel i20 price comes down, it`ll be great for customers.
Ofcourse there will be buyers who`ll buy diesel cars for the driving characteristics but the nos. would be less compared to general buyer.

I have no idea about the manufacturing cost of diesel cars, this is my personal view based on information available in Team-BHP and those excellent excel sheet calculations to help decide on deisel and petrol cars.
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Old 2nd July 2010, 14:34   #15
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Quote:
Originally Posted by Gilead View Post
Petrol-Diesel split for Indica and Figo is 10%-90% and 45%-55% respectively. The Figo petrol may not be great for enthusiasts, but it seems to be good enough for the mass market because of its VFM pricing. So I highly doubt if Ford will ever release a 'better' petrol 1.2L engine for the Figo.
Its early days for the Figo. The P Figo has not been returning very good FE numbers. If such a situation continues only people looking for space and comfort might stick with it. IMHO they should get a powerful and efficient petrol engine. Imagine a Figo with the K-series engine. You ca6n go for it with your eyes closed.
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