Diesel Car Sales Going Off Road Too
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10/06/2012
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Economic Times (New Delhi)
The order book is nothing to be happy about and the long waiting period of the past is all but over. Eight of the 12 top-selling diesel cars are now available off the shelf, indicating that slowdown has started to impact sales of diesel cars as well. A 5-6% increase in car prices after the Budget and the rising road taxes have delivered a body blow to the already suffering passenger car market, especially keeping in mind the recent boost to diesel car production by automakers, including Ford, Hyundai, Maruti Suzuki.
“The market environment is tough. Almost all manufacturers have free availability of diesel vehicles, and the waiting lists for some have come down significantly,” says Ford India president & MD Michael Boneham. “In some cases, incentives are being doled out on diesel cars also,” he says.
Diesel models of Maruti Suzuki Swift, Hyundai i20, Toyota Etios, Volkswagen Polo and Vento, Mahindra & Mahindra Scorpio and Bolero are available off the shelf now. The waiting period of hotselling Swift Dzire and Hyundai Verna has shrunk by as much as one to two months depending on location from four to six months till March.
However, the waiting period of XUV 5OO and Maruti Suzuki Ertiga still remains high at 3-6 months. The demand for diesel cars had gone through the roof over the last one year with price gap between petrol and diesel widening to over . 30 a litre.
In the last three months, the on-road price of cars has gone up by . 30,000 to . 1 lakh. Also, prospective buyers have begun deferring purchases at the time of delivery.
While there are no discounts announced by any of the automakers on diesel cars, a field check reveals that the dealer discounts now range from . 3,000 to . 5,000 on diesel cars from Tata Motors, Volkswagen, General Motors, and Hyundai.
Manufacturers have realigned their production in the last three to six months in favor of diesel, especially after the budget, as there was no hike in excise duty on diesel cars. Ford India had invested $72 million in adding 80,000 units of diesel engine capacity earlier in the year, Hyundai India added 50% to its capacity and Maruti Suzuki got 1,00,000 more units from Fiat for its diesel lineup.
“Although the price difference between petrol and diesel is about . 34 a litre, the demand for diesel cars have not picked up,” says P Balendran, VP, corporate affairs, GM India. “The market remains depressed because of high interest rates, inflation and negative sentiment,” he says.