The Indian car market is adversely affected by high vehicle prices, constant hike in fuel prices and high borrowing cost, which makes it difficult for average Indian customer to go for an affordable car. Petrol prices are constantly increasing, which makes it difficult to buy petrol cars. Although the price of petrol cars is lower than diesel cars, the former is avoided to a great extent due to their high running cost.
Devaluation of rupee and recent petrol price hike will push customers towards diesel cars. In 2011-2012, diesel engine cars contributed 37 percent of the total sales. It is expected that similar trend may continue this year. In order to go with the current market trend, the largest car maker, Maruti Suzuki said that it will reduce the production of its petrol cars and increase the diesel car output. As per the report of Economic Times, two lacs order for diesel cars are yet to be completed. This provides a clear picture of the demand of diesel cars in the country. Demand of petrol cars is reducing and the recent fuel price hike will adversely affect the segment.
The falling rupee has further made the situation worse as cost of imported inputs have increased. Car makers are planning to raise the price of their models and if this happens, it will be third hike this year. As per reports of the Economic Times, luxury car makers General Motors and Toyota Kirloskar Motors will soon announce the increased price of their models. Even, Maruti Suzuki and Hyundai Motor will not lag behind. Car prices will also be pressurized by higher demand of diesel cars.
The constant rise is petrol prices is pushing up the price of diesel cars. Customers are now left with only option to go for two wheelers. Bike manufacturers are now in close competition with one another to launch cheap models. Even Yamaha is planning to enter the low cost bike segment by launching a bike priced around Rs. 27,500. As per reports of Business Standard, it will be the cheapest bike in the country. Honda Motor has also launched its low cost motor bike the 110 cc ‘Dream Yuga’, in India. So, there is always a bike for those who can’t afford to buy a car.
