The Hindu Business Line : Diesel variants dominate luxury car sales

Once popular cars, the Optra and the Corolla, are slowly losing the race to the diesel variants of their competitors, clearly indicating that cheaper fuels as well as higher mileage are important considerations even for the rich.

"Clearly, the trend is towards dieselisation of the segment," Mr Ankush Arora, Vice-President (Sales & Marketing), General Motors (GM), told Business Line.

The sales numbers indicate that the sales of GM's Optra are seeing a slowdown. For the first five months of the current calendar year, sales showed 29 per cent decline to around 2,200 units, while that of the Corolla showed a slight decline of eight per cent to 3,600 units. The Corolla, however, still leads the C Plus segment.

Even though diesel versions of the C Plus segment cars (price range Rs 8-12 lakh) carry a premium of Rs 50,000-Rs 80,000 and in some cases more, they are seen as one-time investment compared with relatively far less running cost of these cars.

For example, the Octavia, with a diesel variant, is powering the rise in sales, indicating customers' increasing preference for diesel cars.

Though Skoda officials did not share sales figures, market sources said that the Octavia has grown over 20 per cent during January-May 2006, compared with the corresponding previous period.

Another C Plus car, Hyundai's Elantra, has also witnessed a decline in sales but not as sharp as the Optra's. This is primarily because the Elantra has a diesel variant in its line-up. For the January-May period, sales declined nearly eight per cent to 1,130 units.

"Clearly, diesel gives operating economy in terms of lower costs as well as higher mileage," said Mr Arvind Saxena, Vice-President (Sales & Marketing), Hyundai.

Mr Saxena added that the diesel variant of Elantra constitutes 60 per cent of the total sales of the car.

However, the preference for diesel variants is a recent trend though the Optra was an exception, as month-wise figures show that its decline in sales started in 2005 itself compared with sales in 2004.

Mr Arora, however, put it down to decline in the segment itself. "The segment itself has declined and at the same time, customers have far more models to choose from."