The Telegraph
Monday , July 8 , 2013
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City drives the change in fuel fight

Diesel or petrol? The dilemma and the debate won’t die down but Calcutta is pulling away from the conformist crowd of car owners for whom fuel cost is the only factor.

In a season of slump that has seen automobile manufacturers trying to ride the rough with new models and even Honda biting the diesel bait, car buyers in this city have reposed their faith in petrol, the traditional fuel of choice for the family car.

“Calcuttans have always driven petrol cars,” declared industry analyst Rahul Khanna. “There was a period when the growing gap in fuel pricing had skewed the balance in favour of diesel but petrol has made a comeback in this city.”

Showroom statistics reflect the reverse trend, a conundrum for an industry that still sells many more diesel variants than of petrol elsewhere in the country. From Maruti to Toyota, almost every carmaker has seen a return to a more balanced diesel-petrol ratio in the Calcutta sales charts.

For Shiladitya Chakravarty, who recently replaced his 2006 Hyundai Accent with a Verna, diesel was never an option. The showroom manager did work out a back-of-the-envelope calculation showing how much he would gain in three years by paying just over a lakh more for a diesel variant of the 1.6 Fluidic but he stood his ground.

“I don’t drive myself but I have always preferred the refinement of a petrol engine to the economy and power of diesel. It’s a personal thing but I also find it unfair, if not unethical, that diesel is so highly subsidised and you have luxury cars running on it,” Shiladitya said.

If there was any doubt in the minds of petrolheads drawn towards diesel, it was removed by the government’s move to decontrol the price of diesel. The gap is still substantial but the arithmetic of owning a petrol car looks better for the Calcuttan looking for a refined, low-maintenance drive.

Diesel prices have risen seven times in Calcutta so far this year to reach Rs 55.16 a litre, against Rs 50.98 in January. The price of petrol is Rs 76.10 a litre, against Rs 75.03 in January.

For all the hoopla about diesel being cheaper than petrol, experts say that it is still more economical for the average vehicle owner to drive a petrol variant of a passenger car.

Taking the price of petrol to be between Rs 74-78 per litre and the Rs 1 lakh or more extra that a diesel variant of any car costs, the owner has to do about 70,000 to 80,000km a year to break even.

Even if one were to do 100km a day on an average, that would work out to only 36,500km a year. Someone driving within Calcutta, where the average distance between two destinations is considerably shorter than in Delhi, would require at least five to seven years of car use to finally reap the economy of diesel. Just that by this time, most owners would be ready to replace their vehicles!

Maruti Suzuki, which had waiting periods running into months for diesel models of the Swift, Swift Dzire and Ritz, is in the middle of a slump.

“We no longer have waiting periods for the Swift and Ritz,” a spokesperson for the company said from Delhi. “Diesel had accounted for less than 15 per cent of our sales in 2011-12, rose to 20 per cent in 2012-13 and then declined to 16 per cent.”

Even the diesel version of the new multi utility vehicle Ertiga doesn’t have as long a waiting period as it did before fuel pricing broke free of the shackles of subsidy. “Ertiga had a 10 to 12-week waiting period that has come down to eight to 10 weeks,” said a sales manager at Bhandari Automobiles.

A sales executive at Mukesh Hyundai has more telling statistics to share. “The sale of diesel cars has dropped 30 per cent while petrol cars are going out of the showroom more than they did in the past two years. Since last November, 90 per cent of the enquiries have been for petrol cars,” he said.

A customer no longer has to wait for an i20 or Verna diesel. Until a year ago, the waiting period for both was 90 to 100 days.

“Previously, the diesel-petrol mix stood at 80:20 for our Verna and Elantra models. That has come down to a ratio of 50:50. In the case of i20, the mix stands at 20:80,” the sales executive said.

Tata Motors, whose forte is diesel technology, has started feeling the pinch. “As it is, the automobile market is down. Car sales have hit a plateau,” rued Vinod Agarwal of Lexus Motors.

The increased preference for petrol has made the market gloomier still for Tata Motors. “The petrol-diesel ratio for Tata vehicles was 10:90 before deregulation. Today, it stands at 15:85,” said Anil Bagaria of KB Motors. “The most affected model is the Vista. We are selling more petrol Vistas than ever before.”

Chevrolet dealer Rajesh Sanei echoed the market sentiment. “Since November, we have been selling two to three models more of petrol.”

Much of this, of course, wouldn’t make sense to automobile reviewers who have turned into diesel evangelists. “Diesel is available everywhere...diesel engines are less sensitive to fuel quality. And they don’t shudder or explode anymore,” wrote one columnist.

But Calcutta — dare we say as usual — has shown itself to be resistant to assembly-line thinking.

“The price difference between petrol and diesel will shrink. And since diesel cars are costlier than petrol models by at least a lakh, we will certainly see more petrol cars selling,” said a Chevy dealer.

Nissan seems to be the only one to have bucked the trend, showing growth in the diesel segment. “The petrol-diesel mix has changed for us from 70:30 to 60:40,” a company official said.

Ashok Manaktala of Topsel Toyota said the product mix of the world’s largest automobile manufacturer at its Calcutta showrooms had changed with the deregulation of diesel pricing. Of the 20 Corollas Manaktala sells in a month, 16 are petrol variants. “In the Etios range, we sell 65 petrol and 35 diesel variants a month,” he said.

Honda is the one company that is benefiting both ways. Its City and Civic models had lost the leadership position in their respective segments as the price of petrol soared but Amaze, its first diesel car, has hit the sweet spot thanks to the promised mileage of 25.8km to the litre.

“Demand for petrol is back and the Amaze, which also comes with a diesel option, has blazed a trail. The diesel-petrol mix is 50:50,” said Sanjay Lamba of Pinnacle Honda.

The only segment that hasn’t witnessed any change in demand pattern is the luxury troika of BMW, Audi and Mercedes. “Audi has not been impacted (by fuel pricing) at all,” said Sandeep Bajaj of Audi Calcutta.

Ditto BMW OSL Prestige. At Mercedes, too, it’s business as usual with a 75:25 diesel-petrol mix.

Any dip in the sale of diesel vehicles is good news for environment experts who maintain there are greater benefits to be had through the shift back to petrol.

“Any reduction in the number of diesel cars can give enormous air-quality and, by extension, health benefits. Diesel emissions have been reclassified by the WHO as Class I carcinogen, putting it in the same class as tobacco,” said Anumita Roy Choudhury of the Delhi-based Centre for Science and Environment.

This is, of course, an unending debate. The automobile industry’s refrain is that modern diesel cars satisfy strict emission norms. Some even classify diesel as the cleaner fuel.

But those like Roy Choudhury insist that diesel has always got away with murder. “Even under the emission standards that you follow, a diesel car is legally allowed to emit more particulate matter and three times more nitrogen oxide compared to a petrol car,” she said.

The presence of both these pollutants in Calcutta’s air is high.

The level of fine particulate is almost double the national permissible standard.

Petrol cars mainly spew carbon dioxide and hydrocarbons, whose levels are relatively lower in the city.

“More than 95 per cent of the commercial vehicles in the city run on diesel and they are the prime polluters. So a decline in the number of diesel-powered private cars will not change the pollution profile of the city much,” said emission expert S.M. Ghosh.

Calcutta police would like to believe they aren’t adding much to the pollution either. Lalbazar’s fleet currently has 1,081 diesel vehicles to 321 running on petrol.