Auto Expo 2014: Diesel cars take backseat as price gap with petrol narrows

Written by Mihir Mishra | New Delhi | Updated: Feb 8 2014, 16:28pm hrs
TataConsumers have been ambivalent towards the diesel option after the government decided to partially decontrol diesel prices. PTI
As the price difference between petrol and diesel narrows, carmakers with primarily diesel-driven vehicles in their portfolio are now turning to petrol options to prop up sales which has been on the downslide for a year.

Tata Motors and Mahindra & Mahindra are in the process of adding petrol vehicles in their portfolio, with former having already announced the development of a 1.2 litre petrol engine called Revotron that will also power its newly launched hatchback Bolt and sub-4 metre model Zest while Mahindra & Mahindra is slated to launch petrol version vehicles next year.

At present, we are primarily present in the diesel segment and thereby not addressing 50 per cent share of the market. With the Revotron engine, which will power ours cars in the future, we will be able to address the petrol market, said Girish Wagh, senior vice-president (programme planning and project management) of Tata Motors.

M&M, however, does not have any immediate plans but will be launching compact SUV next calendar year, which will have both petrol and diesel options.

We largely sell commercial vehicles and sports utility vehicles (SUVs) so most of our sales today happen in diesel, hence, we can not do much about it. However going ahead, we would be introducing petrol options in compact SUVs we line-up for launch. The first of these will be launched next year, said Pawan Goenka, president (automotive and farm equipment sectors) of M&M.

Even as the passenger vehicle sales fell by 5.7 per cent in the April to December 2013, M&M and Tata Motors have been badly hit.

During the same period, M&M fell by 17.6 per cent to 1.87 lakh units and Tata Motors registered a decline of 37.3 per cent to 1.5 lakh units.

Consumers have been ambivalent towards the diesel option after the government decided to partially decontrol diesel prices. The government is increasing the price of diesel by 50 paisa per month and link to the real cost of production eventually.

The consumers were opting for diesel vehicles to encash in on the benefit of cost of diesel being over Rs 20 per litre less than petrol. The difference, however, seem to be bridging due to the government deciding to increase the price of diesel.

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