A host of factors has prompted the Indian consumer to make a shift to petrol variants.
The writing on the wall is clear for diesel passenger cars. The narrowing price gap between petrol and diesel, the Supreme Court ban on registration of diesel vehicles with engine capacities of 2,000 cc or more in Delhi-NCR, and the embargo on 10-year-old diesel vehicles in the capital, and now in Kerala, could very well lead to the death of diesel cars in India. This apart, the adoption of stringent BS VI norms is expected to widen the price gap between petrol- and diesel-run cars further.
The price-sensitive Indian luxury consumer was quick to take note of the recent developments, and has shifted gears in favour of petrol vehicles – with less than 40 per cent buying diesel variants in April 2016, compared to 58 per cent in April 2013. As a result, automakers are saddled with huge under-utilised, or even idle capacities, and investments worth billions of dollars on diesel technology seem to be under threat. The growing uncertainty has also prompted companies to rework production schedules for rolling out more petrol cars.
In fact, companies that have taken the maximum hit, such as Toyota, Mercedes-Benz, Mahindra & Mahindra and Tata Motors, are crying foul over the apex court ban. “There is no reason to criticise diesel as dirty fuel because it meets all emission and other mandated standards. The chain of events against diesel is against the ‘law of natural justice’ and this surely hampers investments in the automotive industry,” Mercedes-Benz India CEO and MD Roland Folger told Business Today.
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