Diesel price deregulation plan worries the car makers
By siliconindia   |   Friday, 16 July 2010, 19:38 IST   |    1 Comments
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Diesel price deregulation plan worries the car makers
Mumbai: The government's intention to deregulate diesel prices has made car makers to review their plans of adding diesel engine options to the existing petrol models. The major car manufactures such as Mitsubishi, Maruti Suzuki, Toyota Kirloskar and Ford India suggest that the future model variants to be launched in India will depend entirely on the price at which the cheaper fuel is sold, reports Swaraj Baggonkar from Business Standard. At present, diesel is cheaper than petrol by a minimum of 28 per cent, going up to 40 per cent in the four major metros. Diesel has been more fuel-efficient than petrol models due to the high energy content in the fuel. Diesel models also command a premium over petrol variants, which can range between 50,000 and 100,000 for compact cars and sedans, due to their expensive and complex technology. Sandeep Singh, deputy managing director, sales and marketing, Toyota Kirloskar, said, "Our decision on launching the diesel variant for the Etios or for other models will be based on the government's move for the fuel. About 50 per cent of small car buyers are buying diesel models currently but this will be reviewed if diesel prices go up." Korea's Hyundai Motor is yet to decide on the proposed diesel engine plant in India. Arvind Saxena, director, sales and marketing, Hyundai Motor India, said "Over four to six years, the price gap between petrol and diesel has narrowed considerably. After the deregulation, this gap is expected to narrow even further and this will increase the demand for gasoline powered cars." Executive vice president and business head of the Chennai car plant of Hindustan Motors, Y.V.S. Vijay Kumar, said, "Our diesel Outlander may not come to India very soon, as there is uncertainty over the price of the fuel. Customers will move towards the petrol models as they carry more power and refinement, if the price of diesel goes up."

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