Petrol price hike: Maruti, Tata, Hyundai offer huge discounts on petrol cars

  • May 25, 2012
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  • 3 min read

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Planning to buy a car? Deals on petrol cars have never been better. While the que for diesel cars goes out the door and around the block.

Hyundai Eon

Carmakers are fast-tracking their diesel vehicle plans and planning offers to push petrol cars as the latest petrol price increase is set to accelerate India's race to become a diesel market.

The widening petrol-diesel price differential over the last couple of years have been making more and more consumers opt for diesel vehicles despite higher pricing. Diesel vehicle sales in India jumped 35 per cent last fiscal at the cost of petrol cars that fell 15 per cent in the same period. And this trend is expected to speed up after Wednesday's petrol price increase of more than Rs. 7.50 per litre.

"There is a clear shift towards diesel cars. We are targeting it by increasing our internal diesel engine capacity and also outsourcing some engines from Italian carmaker Fiat," Maruti Suzuki Managing Executive Officer (Marketing & Sales) Mayank Pareek says.

On the one hand carmakers are expediting plans to roll out more diesel models, and on the other hand they are looking to push petrol car sales through offers and campaigns.

Maruti Suzuki Swift

First off the block, Hyundai on Thursday announced a 'petrol price lock assurance programme' that the company said will insulate its customers from the new fuel price hike for the next seven months. Under the programme covers people who will buy petrol models of the Eon, Santro, i10, i20, Accent and Verna till May 31.

"The hike of this magnitude is neither good for the industry or the customers," Arvind Saxena, marketing and sales director at Hyundai Motor India, says.

"We need to soften the blow for our customers," he says.

DIESEL DRIVE

Tata Indica

According to the industry executives, around 2-lakh orders for diesel cars are already pending for delivery and the waiting period is more than a month on an average. Petrol cars are available off the shelf, they say.

Share of petrol-powered cars in India has been declining ever since the government deregulated the pricing of the fuel (petrol) in 2010 and the shift towards diesel cars was aggravated by the widening price difference between the two fuels. Petrol is now about 75 per cent costlier than diesel.

"Diesel is the biggest motivator to buy new cars in the current scenario," says Saxena of Hyundai. The South Korean company is finalising plans to set up a 400-crore greenfield diesel plant that will make 1.5 lakh engines per year for the Indian market.

The company, which sells diesel models for its i20 hatchback and other bigger cars, imports all the engines from South Korea.

The country's largest carmaker Maruti Suzuki is installing a diesel engine plant that will have an initial capacity of 1.5 lakh engines per year by the middle of 2013. The capacity will be doubled in the following year.

Other carmakers such as Ford, General Motors, Toyota and Volkswagen too have gauged the consumer sentiment and started expanding their diesel portfolio in the country.

"Diesel is expected to play a critical role to simulate demand," Toyota Kirloskar Motor Deputy Managing Director (Marketing) Sandeep Singh said. "We are pegging 75 per cent of our total output for diesel vehicles to meet the exponential demand from this fuel," he added.

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