Car Manufacturers Rush to Introduce Diesel Cars

Auto companies are doing everything in their capacity to meet the rising demand for diesel powered vehicles, including increasing production capacities at their plant and launching more diesel models. Of all the passenger cars sold in India, diesel powered variants account for around 40%.

GM India, which recently launched their diesel powered Chevrolet Beat in India, intends to launch similar variants for their other models, such as the Aveo sedan, Aveo UVA and the Spark as well.

The company’s MD and President, Karl Slym, said that they are interested in bringing out diesel variants in other segments as well.

According to industry analysts, luxury car manufacturer, Mercedes Benz India is also planning on launching their E Class and C Class cars in India with small diesel engines.

Auto analyst, Abdul Majeed, was quoted as saying that the current demand for diesel variants stands around 30 to 35% that is expected to increase to a large extend in the following couple of months. He added that since the past two months, six to seven out of every 10 customers opt to buy a diesel variant.

The sales of diesel powered car have witnessed compounded yearly growth rate of around 22% from the fiscal year 2005-06 to 2008-09, whereas the growth for petrol powered cars in comparison has been only 12%, a clear marker of the shift in car buyer’s preference.

Majeed added that in spite of the diesel cars selling for more in comparison to petrol cars, higher by at least INR 1 lakhs, diesel cars offer great fuel efficiency and thus low running costs that attract a lot of customers.

For cashing in on this demand, Fiat have already begun offering their diesel powered Linea and Punto cars for the same price as their petrol variants. Fiat India’s chief executive and president, Rajeev Kapoor, said that with rising petrol prices, cars powered by diesel make a more attractive proposition.

The country’s largest passenger car manufacturer, Maruti Suzuki will soon launch their new diesel powered Swift car that will be equipped with a 1.3l diesel engine. With six to seven out of every ten cars of the Swift sold having a diesel engine, the company expects their new model to push their sales volume even higher.

Ford Motor is also increasing their focus on diesel powered cars. Ford India’s executive director of sales, service and marketing, Nigel E. Wark, said that for their upcoming cars, they will focus more on diesel variants. The company intends to introduce 8 cars in India by 2015.

Majeed added that while the demand keeps increasing steadily, manufacturers will still require another 6 to 10 months, before they can increase their production capacity to catch up with the demand.

While Maruti Suzuki and Ford India plan on increasing their production capacity in the upcoming months, GM India announced that they have the required capacity for keeping up with the new levels of demand. SIAM recently lowered their growth forecast for the fiscal year 2011-12 for cars from the earlier 16% to 18% estimate to 10% to 12%. The sales of cars had risen to 30% in the fiscal year 2010-11, which was the highest growth since the fiscal year 1999-2000.

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