Top car makers of Indian auto market have acknowledged the government's decision to regularly hike the price of diesel fuel as a welcome move and believe that the step looks like in right direction towards the industry growth. However, the automotive companies have affirmed that the increase in prices of fuel could also have some affect on sales of diesel-run models in the country.
Maruti Suzuki India Limited (MSIL), the country's largest passenger car maker, has stated that it will continue expanding plans at its diesel engine manufacturing unit in Gurgaon, Haryana. As per reports, the company will be investing an astounding sum of Rs. 1,700 crore on its Gurgaon based diesel unit, with absolutely no concerns regarding the government latest ruling.
Informing about the company's stance on upcoming hike in prices of diesel, R C Bhargava, Chairman, MSIL, was quoted as saying, “This is a step in the right direction for the country overall, as we cannot afford such a high subsidy burden... This will, however, not in any way affect Maruti Suzuki's plans for diesel engine plant. We don't have a problem with the proposed diesel price hike.”
Mahindra and Mahindra (M&M) Limited, the country's leading utility vehicle maker, believes that hike in diesel prices can lead to an increase in demand for petrol driven vehicles in the small and mid-range segments of Indian market.
Expressing his agreement with the Indian Government's latest decision to allow small hikes in prices of diesel fuel, Pawan Goenka, President, Automotive division and Farm Equipment Sector (FES), M&M, said, “Mahindra has always been supportive of narrowing the gap between diesel and petrol fuel prices by another Rs. 5 per 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.”
Further, Toyota Kirloskar Motor Private Limited (TKMPL), an Indo-Japanese joint venture partnership between Kirloskar Group and Toyota Motor Corp., has also welcomed the government's latest move. The company believes that the upcoming price increase of fuels should not be sudden, but must be done in a gradual manner.
Informing about the company's stance on impact of diesel price hike on sales and growth in domestic auto market, Shekar Viswanathan, Vice Chairman (VC) and Whole Time Director, TKMPL, was quoted as saying, “It is always better to have a realistic and market related pricing, and the earlier it is the better. We want the consumers to have the choice. If there is more demand for petrol vehicles, then we will be producing more petrol vehicles.”
