Earlier this year the Indian Government has passed a law which ‘decontrolled’ prices of fossil ‘fuel’, as a result of price of diesel is rising steadily. The narrowing of difference between diesel and petrol prices in the market has a very interesting result in the car market in India. As the price of diesel goes up the prospective customers of new cars are buying petrol cars instead of diesel cars, which were very popular before decontrolling of fuel prices.
The diesel cars are more expensive as compared to the cars using petrol as fuel. According to one report, there used to be a ‘difference’ of seventy eight percent between two variants before the ‘decontrolling’ of fuel prices; it has now slipped to twenty percent only. It is reported that in April of this year alone fifty seven percent of all cars sold were petrol cars. The public preference for petrol models has another interesting side effect; the car manufacturers are changing their production strategy to increase putting more petrol cars on the roads.
‘General Motors’ is one car manufacturer who has taken advantage of this new trend to introduce petrol variant vehicles to the Indian car market. A high executive announced that they are going to ‘increase’ manufacture of petrol vehicles in the light of high demand of petrol cars. ‘Hyundai Motor India’ also announced that they have increased the production of petrol cars to sixty five percent as compared to sixty two percent in the year ‘2012’. ‘Honda Car India’ is also watching with interest the surge in demand of petrol vehicles in India. The vice president in charge of sales and marketing in Honda said that the sale of vehicles running on petrol is increasing in recent month. They said the sale of their model, the petrol models ‘City’ and ‘Brio’ sales have escalated recently. The markets sources say that cars like, ‘Alto’, ‘Eco’ and ‘WagonR’ have increased their sales as compared to the last year’s sale.