Diesel car sales drop to 26% in lieu of ban and rising prices

The Indian automotive market is clearly showing an inclination towards petrol-powered cars, especially after the infamous diesel-car ban in Delhi-NCR. As a matter of fact, number of diesel cars sold has dropped to 26% of the total sales, while the same was 52% in 2012.

The main reason behind this shift in customer preferences has been the recent debate on the diesel car ban. Supreme Court has enforced a ban in Delhi and the NCR that has stopped sales of diesel cars having engines bigger than 2,000 cc. This ban has not only affected bigger cars in Delhi, but has marked its impact throughout the country. People have become apprehensive about the ban being extended to lower capacity cars as well, and the National Green Tribunal's plans to enforce similar bans in more cities has further de-motivated customers from putting their money on diesel cars.

Additionally, the price difference between petrol and diesel has been narrowing every fortnight. Whenever a fuel price increase is made, diesel suffers a larger hike than petrol, while when a price deduction has to be executed, the drop is larger for petrol than diesel. As a result, while the difference between diesel and petrol prices in 2012 was around Rs. 27, it has now reduced to just Rs. 10. This narrowing fuel price gap means that it takes longer to recover the extra cost one pays for buying a diesel car. And since people in cities are now replacing cars in every four to five years, they have run out of a reason to put the extra money in a diesel car.

Industry experts suggest that this petrol-inclined buying trend will be staying here for quite some time. As a result, various manufacturers have started introducing petrol models of their cars, even in the full-size SUV and luxury sedan segment.

Source: ET Auto