Auto industry feels hike won’t affect diesel car sales
The statement assumes significance as diesel vehicles have been the primary growth driver in the last two years and with an overall slowdown in auto sales this fiscal, there were apprehensions that if sales of diesel vehicles also plummet, the sector’s growth would be further hit.
Industry officials said that till the time the price differential with petrol remains — petrol is today priced Rs 20 a litre more than diesel (R47.65, in Delhi) — diesel car sales are expected to see continued rise in demand due to benefits like lower operating costs. Even if both fuel are priced in the same range, a diesel engine is still 20-30% more fuel efficient — which may continue to drive sales.
Pravin Shah, chief executive (automotive) at Mahindra & Mahindra, said that till the gap between petrol and diesel remains at around Rs 15, as was the case a few years back, there should be no long-lasting impact on sales. “We are not against the increases which are required to be taken. The gaps are not sustainable and are artificial, which has to be narrowed. To the extent the increase is in small doses as per the government’s announcement, it will be fine. There will be upward revision in petrol prices as well,” he said.
A Tata Motors spokesperson said: “It is a good sign and the
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