Car buyers still strongly skewed in favour of diesel

Recent hike of Rs 5 in diesel prices has raised a question. Will this price rise in diesel affect the popularity of diesel cars amongst buyers?  The answer to this could be a no as the running cost of diesel car against a petrol car is identified to be lower at new price levels.

According to a report by Times of India, diesel continues to remain pocket friendly for diesel cars compared to petrol ones. According to the survey, per kilometer cost of running a petrol car is Rs 4.89 which is twice as that of a diesel car that is of Rs 2.47.

diesel vs petrol

Car Buyers Confused – Diesel or Petrol?

For the study, hatchbacks and entry-level sedans were considered where average fuel efficiency of petrol car was found to be 14 km/litre and in diesel its 19 km/litre. The study reveals that diesel remains a bit easy on the pocket. The price hike will mean individuals buying diesel cars will have to wait much longer to be able to recover the additional cost on their purchase.

That is, if someone rides for a 1,000 km per month, their break-even time rise from the initial three years and six months to 4 years and a month now. For people who drive up to 2,000 km every month, the change is even slighter— from about one year and nine months to two years and a few days.

Analysts and reviewers feel that Diesels’ grip on the passenger car market will continue. “While there may be a minor shift in the diesel-petrol ratio, the overall impact won’t be much. There may be some shift for petrol cars only in the small car category, but this not for big cars, utility vehicles and SUVs,” said Pawan Goenka, president of the automotive division of Mahindra & Mahindra. Coming of more new cars in the diesel segment, especially SUV and UV segments has added to popularity and potential in the diesel cars segment.

J P Balendran, VP at GM India, also said that buyers won’t shift to petrol cars despite steep hike in diesel prices. “While the market distortion has been addressed to some extent, the price gap between the two fuels is still too large.”