Carmakers Fume Over Latest Petrol Price Hike

Published: Thursday, May 24, 2012, 12:00 [IST]

The automobile industry in the country has slammed the petrol price hike by the government saying the hike will affect the growth of the industry further. The sales of petrol cars have been seeing a slump with the already high price of petrol.

Society of Indian Automobile Manufacturers (SIAM) Senior Director Sugato Sen said: "Petrol cars are not selling as such already. With this record hike, the situation will go from bad to worse." Major carmakers like Maruti Suzuki, Hyundai Motors and General Motors expressed deep concern over the monstrous price hike ever of Rs 7.5/ litre.

Maruti Suzuki India Marketing and Sales Managing Executive Officer Mayank Pareek described the price hike as a “disaster” and said: "This will further increase the skew between petrol and diesel vehicle demand, which is already very wide. This will severely affect the sales of entry level cars, which are mainly petrol driven."

Pareek added: “Last year, the petrol segment declined by 16.2 per cent as the demand shifted to diesel vehicles. Now there will be more demand for diesel cars after the price hike but most of the manufacturers are running on full capacity for diesel vehicles.”

Hyundai Motor India Ltd Marketing and Sales Director Arvind Saxena said: "Demand is already under pressure on account of inflation and high interest rates. A hike of such magnitude is neither good for the customer nor for industry."

General Motors India Vice President P Balendran expressed similar concern and said: "Earlier, the industry was expecting a growth of 8-10 per cent this fiscal but I will not be surprised if we are in the negative territory due to fuel price hike and high interest rates as the market continues to be sluggish."

He added: “This will result in inventory pile up of petrol vehicles as more and more consumers will opt for diesel vehicles.”