Diesel car sales to drop during the ongoing end quarter of 2012-13

Tuesday 26 March 2013, 10:46 AM by

The sales recorded by diesel powered vehicles have dropped by 5 per cent during February '13 as compared to the year-ago period in Indian passenger car market. Accordingly, the senior executives of top auto makers feel that diesel vehicle sales are most likely to drop in the ongoing fourth quarter (Q4) of 2012-13 fiscal. This year in February, the passenger car sales plunged by 25.71 per cent to a 12-year low in the country. The auto makers cited high interest rates and the ever increasing fuel costs as the primary reasons behind the last month's drop in sales.

Expressing his views on diesel vehicle sales going downhill in the country, Mayank Pareek, Chief Operating Officer (COO), Marketing and Sales, Maruti Suzuki India Limited, was quoted as saying, “There has been some moderation in sales growth of diesel vehicles. While diesel vehicle sales at Maruti Suzuki increased by 54 per cent and 60 per cent in December and January, the growth rate tapered off to 22 per cent last month.” Further, R. C. Bhargava, Chairman, Maruti Suzuki India Limited, said, “There are little signs to show that growth would be more than five-seven per cent in the coming fiscal.”

Since the Indian government's decision to de-regulate the price of diesel fuel took place in 2012, the demand for diesel powered vehicles has dropped in the country. The price differential between petrol and diesel retail costs is shrinking, which has also resulted in slow sales recorded by diesel models in the Indian passenger car market. Commenting on the diesel car sales in India, a senior petroleum ministry official has been quoted as saying, “Before a price rise of around Rs. 5 on diesel late last year, the monthly growth on diesel consumption this year was around 13 per cent. Now, diesel decontrol may pull down this growth.”

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