Why petrol is making a comeback

    The diesel boom is starting to fade and petrol cars are regaining popularity; we analyse the factors behind this turnaround.

    Published On Dec 07, 2013 12:27:00 AM

    5,160 Views

    Why petrol is making a comeback

    In recent years, India has become well known as a diesel car market. Thanks to a sharp rise in the price of petrol, the gap between it and the price of diesel grew wide, causing a dramatic shift at just about every price point. Even in the luxury segments, where the inherent smoothness and refinement of petrol powertrains are traditionally thought to be preferred, diesel variants outsold their petrol counterparts by significant margins. There are a number of other factors that contributed to this – better diesel engine technology for one – but ultimately it boiled down to the lower running costs that came with using diesel fuel.

    Now, petrol is making a comeback of sorts. Over the past year-and-a-half, the government’s decision to de-regulate diesel prices with a gradual increase has seen the price gap between the two fuels reduce, making buyers take a serious look again at buying a petrol-engined car.

    In fact, the tide has already started to turn. Market leader Maruti’s Swift hatchback has seen its petrol sales go up from around 4,900 units to about 5,700 units. Rahul Kale, general manager at one of the largest Maruti dealerships in Mumbai, has noticed a strong bias towards petrol. He said, “There are far more enquiries and bookings for petrol models, especially in the metros than there are for diesels. In fact, our sales ratio is about 4:1 in the favour of petrols now.” And it isn’t just limited to the metros. 

    Another model that has showed an even more distinct tilt to petrol is the Nissan Micra. With the debut of the petrol-only Active variant, sales have shot up three times to 4,718 units in April-October 2013 from 1,652 units in the year-earlier period. Toyota’s Etios Liva, which got off to a slow start, has also seen a rising trend in sales of petrol variants with 4,598 units sold in the first seven months of 2013-14 as against 1,460 units sold a year ago. The VW Polo has seen a rising trend in sales of its petrols with April-October 2013 sales at 8,343 units as against 5,424 units a year ago. Tata Motors has even accelerated its powertrain development programme – working on a 1.2-litre turbo-petrol offering that is based on the old Xeta engine.

    The figures speak for themselves – the petrol trend is clearly on the rise. But just what has contributed to this change of heart? Here are the five factors that have moved Indian buyers back towards the green nozzle at the pumps.

    1. Fuel Price parity

    Over the past year and a half, diesel’s price de-regulation, combined with a couple of steep hikes, has progressively reduced the price disparity between the two fuels to the point where cost-sensitive Indian consumers are now questioning the economic viability of a diesel car. And they’re right. Since August 1, 2012, petrol prices have risen by just 4.5 percent while diesel’s has soared Northward by a whopping 30 percent!

    Back in August 2011, diesel cost Rs 46.25 per litre in Mumbai, while petrol commanded Rs 75.14 per litre. That’s a difference of a whopping Rs 29 per litre. It meant, if you averaged about 1,500km a month, a diesel Swift’s premium would have taken about two years to break even. But today, the price difference between the two has shrunk down to just about Rs 18 per litre – making the break-even period almost twice as long.

    2. Sticker Shock

    The price difference between petrol and diesel cars has increased. For example, diesel cars that initially cost about Rs 75,000 over their petrol counterparts are now over Rs 1.20 lakh dearer. And with more stringent Euro V emission norms on the horizon, the added hardware required for diesel engines will make them even more expensive to produce, further increasing the price difference between the two.

    3. Improved engine technology

    Diesel engines are inherently torquey and more fuel-efficient than similar petrol motors. But, carmakers have been developing newer engine technologies and are arming their petrol motors with direct injection and turbochargers, delivering Goliath-like performance from David-sized motors. This downsizing of engines is improving fuel economy as well – reducing the fuel consumption and torque differences between the two engines. Take Ford’s small 1.0-litre EcoBoost petrol engine – it produces 123bhp and 17.3kgm of torque! Similarly, VW’s 1.2-litre TSI as seen on the new Polo and Vento TSI deliver fantastic performance for their size.

    4. Refinement

    Despite the recent advancements of diesel motors, they just can’t match the NVH characteristics of a petrol engine. Petrol cars are smoother, more refined and generally nicer to drive.

    5. Automatic choice

    There’s a rising demand for automatic hatchbacks and manufacturers are responding by introducing new petrol automatic models. However, at the moment, there are hardly any automatic diesel cars under the Rs 15 lakh mark, with the Verna diesel auto being the least expensive. Moreover, there are absolutely no diesel hatchbacks at the budget end of the market. Hence, petrol engines are the default choice for consumers looking for a small automatic hatch.

     

    With inputs from Autocar Professional

    Copyright (c) Autocar India. All rights reserved.

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