Maruti Suzuki India Limited (MSIL), the country's largest passenger car maker, has revealed that hike in the prices of diesel fuel will have a minor impact on sales of diesel-run vehicles in the domestic market. As per reports, R.C. Bhargava, Chairman and key decision maker of MSIL, has confirmed the company's stance that the increase in prices of diesel will have a muted effect on its sales in the country. It is evident that the Maruti Suzuki's statement contradicts the opinions of industry experts and economists, who believe price hike could refrain domestic consumers in investing on diesel models.
Evidently, the government has put the ball in court of the Indian Oil Marketing Companies (OMCs) for diesel price regulation in India. The auto market is in trepidation over OMCs' imminent and regular small hikes in the diesel price. Bhargava has informed that Maruti Suzuki currently has a long waiting list for its diesel powered cars, which is somehow not expected to reduce. He further said that it is highly unlikely that the company will face any sales related troubles due to the impending marginal increase in the diesel prices. The Chairman has also confirmed that the company will continue expanding its diesel engine assembly operations at its Gurgaon facility.
In 2012, the Indian auto market witnessed a paradigm shifting phase in vehicle purchase pattern, witnessed among domestic audience. Evidently, sales of diesel driven vehicles, such as Renault Duster and Mahindra's XUV500 and Quanto, outpaced those of their petrol run counterparts last year. The rampant surge in sales of diesel-run vehicles as compared to their petrol powered twins can be attributed mainly to their superior fuel efficiency performance and availability of subsidised fuel rates set by the Indian Government.
On similar lines of the Maruti Suzuki Chairman, Pawan Goenka, President, Automotive and Farm Equipment Sector (FES), Mahindra and Mahindra, has also announced a similar statement. Commenting on the government's latest move, Goenka was quoted as saying, “We welcome the statement made today by the petroleum ministry on diesel fuel price increase. Mahindra has always been supportive of narrowing the gap between diesel and petrol fuel prices by another Rs. 5/litre. In our opinion such an increase in diesel price will have very little impact on UV and CV demand but may slightly shift demand to petrol in the passenger car segment in the small and mid-range.”
At present, Maruti Suzuki retails many of its popular products, such as Swift, Swift DZire, SX4, Ritz and Ertiga in diesel powered vehicles. With the exception of SX4, almost all other diesel-run aforementioned models have been recording impressive sales in the Indian passenger car market.
