Petrol cars back in vogue as auto biz fights slump

India's auto manufacturers are feeling the brunt of a slowdown in demand, but petrol cars are back in vogue. The country's biggest carmaker Maruti Suzuki has seen sales of its petrol cars recover over the past two months. This is after a 14-percent drop last fiscal.

Other manufacturers like Hyundai are starting to see improved buying sentiment on petrol cars among the first-time buyers. CNBC-TV18's Ronojoy Banerjee reports the demand for petrol cars is in tandem with the fall in sales of diesel vehicles. And this has prompted Maruti to suspend the production of its diesel vehicles on Friday. Also Read: Maruti Suzuki India goes for one day production shut-down
In FY13 diesel cars outsold petrol vehicles for the first time ever. In fact the share of diesel vehicles increased to nearly 60 percent out of the total 1.9 million cars sold from 48 percent in the previous fiscal.
But now a role reversal is at work with the discerning Indian consumer once again turning towards the smaller petrol-variants of popular hatchback-models. For instance, in the case of Maruti Suzuki that saw total petrol car sales decline over 14 percent last fiscal has seen the segment clock an impressive growth in the first two months.  In April, the sales of the Alto 800, A-Star and the Wagon-R increased almost 14-percent at a time when the company's total domestic sales remained flat.
Similarly, in May the small petrol-car segment clocked a growth of 5 percent while total sales for Maruti fell a whopping 13 percent in the same period
Worryingly, diesel variants of the Swift and Sx4 have reported a sharp fall in sales prompting the company for the first time to suspend production of both diesel and petrol cars for a day on Friday to bring down the inventory levels that are in the range of almost 6 weeks now.
Even Hyundai has seen the sales of the Eon and i10 improve as compared to the previous year. The reasons for the latest trend are not hard to guess. From a price gap of Rs 30 between a litre of petrol and diesel up to last year, it has today shrunk to about Rs 8 today.
Mayank Pareek, COO, marketing and sales, Maruti Suzuki, says, "Based on value consciousness, cost of ownership and running, expect 50-50 ratio between sales of petrol and diesel cars this year."
What's more, with new petrol-car launches lined up — namely Ford's Ecosport and Hyundai's small one-litre hatch — it may further boost the fortunes of the segment.