New petrol cars dumped for diesel variants

As buyers switch to diesel cars to beat the spiralling price of petrol, the used car market is flooded with petrol-powered cars, many bought less than six months before.

This comes on the back of dealers facing shortage in fresh supplies of diesel cars after their demand surged to unprecedented levels in the last one month.

While a new used car (less than six moths old) generally carries a discount value of anywhere between 10-15 per cent, depending on its brand and variant, the same has stretched to 20-25 per cent following the petrol price rise.

Preferred for its low-cost and superior fuel efficiency, diesel is finding better acceptance among buyers even as the waiting period for such cars stretches beyond six months in the new car market in some areas. "A diesel model gets picked up from the market as soon as it lands, but we have a new three-month-old Volkswagen Polo and an equally new Fiat Punto, which are finding no buyers because they are petrol-driven despite a steep discount offered by us," said a Mumbai-based used car dealer.

Other used car dealers say buyers do not mind paying the added premium of a diesel model as many of these are bought on finance. The phenomenon is not just limited to Mumbai as buyers in Hyderabad, too, are looking for a similar switch.

"Petrol cars are hardly moving from the market although the price cut on them are very tempting. These are the buyers who were initially planning to go for a petrol model, but looking at the huge difference between the price of the two fuels, they settle for diesel. About 80 per cent of our cars sold are diesel up from under 50 per cent earlier," said a Hyderabad-based used-car dealer, which is the biggest in south India.

Although through constant advancements in technology, petrol cars have managed to come close to the mileage given by a diesel car, diesel cars still have the lead. For instance, a Maruti Swift can give 20-22 km per litre of diesel whereas a petrol variant will deliver 16-18 km per litre.

While the overall new car market has slowed significantly since the past two months, dealers of companies such as Maruti Suzuki, Hyundai, Tata Motors, Volkswagen and Toyota say bookings of diesel cars have shown a 70 per cent jump despite their higher price tag.

A Tata Motors and Fiat dealer in Mumbai said, "Diesel cars are favoured by customers because of the low-cost of its fuel. Buyers who do not drive more than 50 km a day are also seen preferring the cheaper fuel. Petrol cars are hardly moving since May.”

A widely accepted practice says defines unless the car is driven for more than 2,500 km a month (or about 85km a day), the buyer should avoid settling for diesel model. Most diesel models charge a premium of 25-30 per cent over their petrol counterparts.

Arvind Saxena, director, sales and marketing, Hyundai Motor India, said, "The difference in prices of the two fuels has led to such a situation. There has been a surge in demand for diesel cars lately. This is clearly a knee-jerk reaction. But if the government decides to increase the diesel price then the market will balance out."

An almost similar surge has been recorded in demand for CNG-driven vehicles in those markets where the fuel is widely available. Many companies, including Maruti Suzuki and General Motors are, therefore, offering a CNG variant if diesel is not possible for the time being.