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Updated: November 12, 2011 08:31 IST

Petrol price hikes pump up diesel car sales

Anil Kumar Sastry
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Rise in price drives buyers to cars that are cheaper to run

Frequent petrol price hikes are leaving petrol-driven cars on the shelf while buyers are driving off with diesel cars.

Comparative figures of registration of cars for the first nine months of 2010 and 2011 indicate an overall increase of 9.7 per cent in diesel car sales and a 2.39 per cent decrease in petrol car sales in the Bangalore region.

Waiting period

This is despite a waiting period ranging from two to six months for a new diesel car, which costs Rs. 80,000 to Rs. 1 lakh more than their petrol variants.

Similarly, many used car dealers, including company-operated, are unable to sell high-end petrol cars though smaller cars fare slightly better.

An executive at a company-operated outlet told The Hindu they cannot stop buying used cars as it would affect sales of new cars.

‘Like hot cakes'

“However, we have been quoting Rs. 15,000 to Rs. 20,000 less compared to last year's prices for petrol cars,” he said. “On the other hand, used diesel cars are selling like hot cakes.”

B.K. Suresh, Senior Sales Manager with Lathangi Ford, a Ford dealership, confirming the plummeting demand for petrol cars, said: “Till August this year, the ratio of petrol and diesel cars used to be 45:55. It is now 25:75.”

A senior executive with Tata Motors said that almost all Tata and Fiat cars sold these days are diesel variants. During the first nine months of 2010 and 2011, the number of cars registered in eight regional transport offices (RTOs) of Bangalore was 49,335 and 50,087 respectively.

Though there has been only 1.52 per cent increase in the number of cars registered, the increase in the registration of diesel cars is 9.7 per cent, according to data available with the Transport Department.

Of the 49,335 cars registered in 2010, 15,975 were diesel-powered. This year, of the 50,087 registered, 17,525 were diesel. Consequently, there has been a decline in the registration of petrol cars, from 33,360 in 2010 to 32,562 in 2011.

The big difference

Public sector oil marketing companies have hiked petrol prices five times since January this year.

With the November 4 increase, petrol became dearer by Rs. 11.16 a litre from its prevailing price in January (Rs. 65.63). In between, the price was increased to Rs. 71.1 in May, Rs. 71.38 in July and to Rs. 74.82 in September.

Hike in diesel

However, diesel price was hiked only by about Rs. 4 during this period, from Rs. 42.34 to Rs. 46.06 in June. There was a marginal hike in July to Rs. 46.21 a litre.

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