Wednesday, July 31, 2013

Diesel Vs Petrol Car Variants – mileage – mere psychological satisfaction

When every middle class Indian decides to chase down his dream to own a car, the first thing he would try to negotiate with himself and the car is the mileage that his car would be offering him with. The middle class Indians are more concerned about mileage other than comfort, luxury and safety features that the car could offer him.

Finally deciding his particular brand car, he would have done all the possible calculation of mileage on the same variant cars of all companies and finally would decide to go for diesel car as it gives more mileage compared to petrol variants.

In the case of both diesel and petrol car variants the mileage is more of psychological satisfaction that user arrives at. By nature, Indians don’t mind spending a small sum on daily basis compared to spending a huge amount at one go. The psychology works this way, money spent to purchase the car at one go is forgotten as fuelling is a frequent activity the middle class Indians want maximum benefit for the money that is spent on daily basis and that is why he is obsessed with 1 Liter Diesel Rs. 54 = 20km whereas 1 Liter Petrol Rs. 73 = 13-16km recipe. When a petrol model car is being fuelled with Rs. 73 (as July 31, 2013) and gives a mileage of 15km per liter in case of Maruti Swift (VXI) and the same Maruti Swift (VDI) is fuelled with Rs. 54 and gives a mileage of 20km.

In the long run money spent on running both diesel and petrol variants (VXI and VDI) would be the same. The diesel car is at least 1.00 lakhs to 1.50 lakhs costlier than the petrol variants of the same company with same features as well as the maintenance cost of the diesel car is higher compared to petrol variant of the same company.  If that extra lakh, otherwise would have been spent on the diesel car, is deposited in the bank, with the interest that is being generated, petrol fuelling expense would be moreover met for a family that runs the car less than 10,000kms annually.

Having spent those extra lakhs already, a diesel car owner enjoys those so-called extra mileages. Only if diesel car was economical, perhaps petrol cars would not have been sold out in large numbers as it has been. Therefore, the mileage that is the predominant consideration of the middle class Indians while going for the diesel car is merely the psychological satisfaction that one arrives at. The current margin between diesel and petrol price is merely Rs. 20 and if the current market trend continues in another 5 years of times the price of the both diesel and petrol will be leveled.      


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