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Small car segment: MSIL sees end of road for diesel vehicles after its price overtakes petrol in Delhi

As the share of diesel car sales in the passenger vehicle segment has come down from around 60 per cent in 2012-13 to 28 per cent in 2019-20 (17 per cent share in Q4 FY20), Shashank Srivastava, ED, sales and marketing at MSIL, said ownership of diesel cars do not make much of economic sense.

Written by Sandeep Singh | New Delhi | Published: June 26, 2020 12:58:08 am
While the average price gap between per litre of petrol and diesel stood at a high of Rs 31 in 2011-12, it came down to around Rs 7 per litre in 2019-20 and is down to Rs 5 on an average across the country.

As the per litre price of diesel has overtaken that of petrol in Delhi and the gap has narrowed in many states, Maruti Suzuki India Limited (MSIL) feels it will be the end of road for diesel cars — at least in the smaller car segment. Having stopped production of diesel cars beginning April 1, 2020 and betting big on CNG as the future fuel, MSIL plans to introduce CNG vehicles across all models going forward and it has already introduced it across eight models.

As the share of diesel car sales in the passenger vehicle segment has come down from around 60 per cent in 2012-13 to 28 per cent in 2019-20 (17 per cent share in Q4 FY20), Shashank Srivastava, ED, sales and marketing at MSIL, said ownership of diesel cars do not make much of economic sense. “In the BS-VI regime, the acquisition cost of diesel car is higher by anywhere between Rs 1.25 lakh and Rs 2.05 lakh over the petrol variant and if the running cost of diesel car is not lower (as it was before), it doesn’t make economic sense to buy a diesel car.”

While the average price gap between per litre of petrol and diesel stood at a high of Rs 31 in 2011-12, it came down to around Rs 7 per litre in 2019-20 and is down to Rs 5 on an average across the country. There has been a sharp rise in prices of diesel and petrol over the last three weeks to about Rs 80 per litre in Delhi. With the price of diesel overtaking petrol in Delhi, the running cost of a diesel vehicle is as high as that of petrol car now.

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