Promising future for diesel powered vehicles in the Indian car market; top automobile firms eyeing diesel as a quick route to success

Monday 05 November 2012, 10:07 AM by

Over the years, debate between diesel and petrol vehicles has been witnessing several ups and downs but considering the prevalent trend, diesel powered vehicles definitely seems to possess a certain edge over their petrol run counterparts in the Indian auto market. At present, most of domestic car enthusiasts are possessed by the dilemma regarding investing in a vehicle that is powered by either of the two conventional fuels – petrol or diesel.

The diesel powered vehicles though more expensive than petrol run contemporaries, offer superior fuel efficiency, besides enjoying subsidised fuel rates provided by the government. Gone are the days when people chided diesel powered motors for their overtly noisy performance, low-end reliability and greater maintenance requirements. The modern diesel motor vehicles have had a major performance revamp and are reliable, robust and less noisy than their traditional forefathers.

Top Utility Vehicle (UV) maker Mahindra and Mahindra (M&M) Limited along with the French auto firm Renault have thrived in Indian market with the enormous success of their diesel product portfolio. The compact Sports Utility Vehicle (SUV) Renault Duster has been shattering all previous sales records for diesel powered motor vehicles in the country, since its launch in the domestic market in July 2012. Evidently, M&M is on cloud nine with the immense reception received by its XUV500 SUV and the much hyped Quanto compact SUV, which was launched in September 2012, with an aim to counter the sales of Renault Duster.

Several automobile industry players have identified diesel vehicle sector as their future targets, in order to cement their positions in Indian market. Honda Cars India Limited (HCIL), a subsidiary of the Japanese auto maker Honda Motor Co., has announced to launch three or four diesel vehicles in the next two to three years on domestic turf. The company has already started developing its diesel engine manufacturing plant at Tapukara in Rajasthan. Expressing his opinion on developments regarding the new diesel engine production unit and importance of diesel segment to the company, Hironori Kanayama, President and Chief Executive Officer (CEO), said, “We cannot tell you the exact product plan, but we are very very ambitious. We are still working on the sequence of which model and the timing of the launch for the same. The future models in diesel will bring us to the right position.”

On the similar lines of HCIL, Hyundai Motor India Limited (HMIL) has also declared to invest a sum of 1,650 crore ($ 300 million) towards setting up a new diesel engine production unit at its Sriperumbudur plant in Chennai. HMIL, the country's largest exporter of passenger cars, believes that the Indian diesel vehicle market is on an upswing and can't be ignored like before. Commenting on the new diesel production facility, Bo Shin Seo, Managing Director (MD), HMIL, said, "The investment will help us meet the growing demand of diesel vehicles in India and reduce the waiting period on our popular models.”

Evidently, the top industry players like Maruti Suzuki India Limited (MSIL) HMIL and HCIL are already facing the heat from diesel oriented automotive firms, such as M&M and Renault. HMIL and HCIL have set the tone with their big investments in the diesel sector and it is about time for MSIL to revamp its current diesel vehicle fleet. Incredibly, M&M and Renault have capitalised on the lack of solid diesel portfolio of their competitors, which may come as an eye opener for other big automobile firms as well.

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