Purchasing Parity w.r.t. Rising Petrol Prices
May 17, 2013 issue of Forbes India,
one of the most respected business magazines in the world, carried a snippet on
the sales of Small Cars in the last two financial years compared with the sales
of SUVs in the same period and connecting the same with the Petrol prices. The
conclusion drawn after comparing the two figures was as follows:
“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 lower running costs… The data shows more people are opting
for diesel-guzzling (and therefore more polluting) SUVs, rather than
petrol-efficient small or compact cars…)
If you read the above paragraph, you
would conclude that we, as consumers, prefer to buy diesel vehicles, which have
a running cost lesser than that of Petrol vehicles. There’s a merit in this
argument. As a consumer, I would buy a product that has a lesser recurring
cost. Now, let’s look at the data and try and understand where the journalist
must have gone wrong.
Description
|
2011-12
|
2012-13
|
% Change
|
Small Car Sales
|
1,517,407
|
1,419,805
|
93.57
|
SUV Sales
|
363,772
|
553,660
|
152.20
|