With the increasing prices of petrol, you would not be wrong to expect car buyers to prefer smaller, more fuel efficient cars. However, car sales data shows that instead of opting for more fuel efficient variants, buyers are going for diesel models that cost and pollute more, but have lower running costs. The price of diesel, subsidised by the government, is about 20 percent lower than petrol.
The data shows more people are opting for diesel-guzzling (and, therefore, more polluting) SUVs, rather than petrol-efficient small or compact cars. Diesel SUVs, on an average, consume 67 percent more fuel when compared to a small, petrol car. Even within the compact car segment, more people are opting for diesel variants, which generally cost Rs 1 lakh more.
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(This story appears in the 17 May, 2013 issue of Forbes India. To visit our Archives, click here.)