Car companies hold back expansion plans due to diesel price ambiguity?

Car companies hold back expansion plans due to diesel price ambiguity?

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Asia Bizz: The demand for diesel cars might have gone up due to the rising prices of petrol, but these days certain ambiguity in the prices of the diesel, has forced the car makers to hold back their plans to expand their segment in diesel.

Several car makers including Maruti Suzuki is now forced to go slow or even abandon the plans to expand the diesel segment due to the uncertainty. In the past few months, it was observed that the demand for the diesel cars have gone up and the petrol cars are available at heavy discounts due to a drop in sales.

The price gap between Petrol and diesel is almost Rs. 25, compared to Rs. 9 in the month of June 2010. Now days almost every diesel car is available with a waiting period of at least three to six months.

On the other hand, Maruti Suzuki has planned to think over its plans for expansion, Hyundai Motors is all set to set a diesel engine plant. So as to escape from the ambiguity in the prices of diesel and petrol, companies like Mahindra & Mahindra and Tata, who are known for their diesel models, are now planning to come up with new petrol cars.