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Cheaper,cleaner diesel burn into sales of petrol cars

Diesel has over a short span of time won over the passenger vehicle buyer.

The dirty fuel is no longer a dirty word in the Indian automotive industry. Long considered the choice of truckers and taxi drivers,diesel has over a short span of time won over the passenger vehicle buyer. With 70 per cent of the market being dominated by small or compact cars,it is no wonder that 2010 saw manufacturers launching new models in this segment. This year too,new models set to drive onto Indian roads include the Honda Brio,Fiat Bravo and Etios Liva. Going by sales,a determinant of their survival in this competitive environment will be availability of diesel variants.

The Chevrolet Beat,without a diesel variant,lost out to competitor Ford’s Figo small car,despite being cheaper. Chevrolet sold 36,368 units of the Beat in calendar year 2010. In comparison,Ford claims to have sold over 60,000 units of the Figo from its launch in March till December. General Motor’s India president and MD Karl Slym had earlier said,“From last year I have been calling for a diesel variant.” The company plans to come out with Beat diesel this year.

In spite of being more expensive than their petrol cousins,what works in diesel vehicles’ favour is the cheaper cost of fuel and better mileage. There is also a changing perception of maintenance. “Diesel,which was considered unclean,is being processed better. Also,with CDRI (common rail direct injection) engines being developed,there is lower cost of maintenance,” said senior auto journalist Deepangshu Dev Sarmah.

Maurti sold 1.07 lakh units of the Swift car from April to December,and close to 12,000 units are sold monthly. Of the units sold,over 40 per cent are of diesel variant,an official said. For the Maruti Ritz,sales stood at 58,000 in the April-December period,with monthly sales averaging 6,000 units. Of this,there is an equal proportion of diesel cars sold to petrol. The official pointed out that diesel car sales are lower than actual demand due to high waiting period.

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“Sales of diesel passenger cars are not reflective of actual demand. Plant capacity is not at adequate levels. Due to long waiting period,buyers are delaying purchases or opting for petrol cars. Companies are now planning to increase production capacity in diesel. Once that happens,there will definitely be a spurt in sales of diesel cars,” said Sarmah. Apart from Chevrolet,Hyundai too has plans for diesel variants. After the success of its i10,the firm has seen good sales of the i20,which was launched with a diesel variant. However,sales in the A2 segment,which includes the Santro,fell from 44,129 in calender year 2009 to 42,397 in 2010. “We plan to set up a diesel engine manufacturing unit by 2013,” said director (sales and marketing) Arvind Saxena. “Diesel still remains cheap as there are government subsidies. So people look for diesel variants… With improved technology,diesel cars are becoming easier to maintain,” he said.

Auto practice leader at PriceWaterhouseCoopers Abdul Majeed said,“In the three-four years that diesel passenger cars have come into the market,demand has been increasing. While controlling around 10 per cent of the small car market then,it has increased to about 35 per cent now.” He said that people are no longer moved to purchase by short term benefits of lowered expenses. “There has been adequate technology investment by companies for improved engines. So,while the cost of the vehicle may be more,in the long run it is worth more.”

Moving to a diesel variant,however,does not always work in manufacturers’ favour. Sarmah said,“When the Indica came out with a diesel variant,there was a new perception of the car,but not for right reasons. The car became synonymous with taxis and inter-state travel due to the cheaper fuel used.”

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RUNNING COOL ON HEAVY FUEL
* Maruti sells 12,000 units of the Swift monthly of which 40 pc are diesel variants
* It sells over 6,000 units of the Ritz,of which 50 pc are diesel variants
* Ford Figo outsold Chevrolet Beat by over 60% despite a later launch as it was available in diesel
* Hyundai,whose sales in the A2 segment have fallen,plans to set up a diesel engine manufacturing unit

First published on: 09-02-2011 at 05:23 IST
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