Trend of buying petrol cars is slowly picking up as the price difference between the diesel and petrol is slowly narrowing. The recent development might be good news for Maruti Suzuki and might also put some pressure on the sales of Mahindra and Mahindra.
In recent times, the global crude oil prices have fallen which has led to a decrease in prices of petrol by ten percent and at the same time, the oil companies are continuing to hike Re. 0.50 in prices of diesel. By now, the price difference between petrol and diesel has fallen to Rs.17 per litre which is the lowest since the deregulation of petrol.
One report states that, at the current fuel prices, the cost of ownership is lower for the petrol vehicles when compared to the diesel vehicles. The trade-off is expected to be in favour of petrol until the difference between petrol and diesel increases to Rs. 25 per litre. This report notes that the price differential could also lead to faster-than-expected recovery in the sales of petrol cars.
The shift to petrol cars might also affect the sales of Mahindra and Mahindra as most of its passenger vehicles are diesel engines.