<p>Despite the widespread fear that the central government will levy a hefty additional tax on diesel cars, the car dealers are not witnessing any unusual spurt in bookings.<br /><br /></p>.<p>They are saying that in any case, the demand for diesel cars is always higher than petrol cars and the trend remains consistent. <br /><br />Said Maruti Suzuki dealer Mandovi Motors’ Chief General Manager (Sales) K Yeshwant Rai: “The demand for diesel cars only continues to be on the rise. Bookings for diesel cars are constantly increasing and the hike in diesel tax is not worrisome.”<br /><br />Maruti’s two match-winners have been the Swift and its sedan version, the Swift Dzire, both of which, underwent a facelift recently. Ever since their inception, and specifically, with the launch of their respective diesel variants, both cars have enjoyed long waiting period. <br /><br />Fresh tax<br /><br />The speculation on a fresh tax on diesel cars began in the recent weeks when the Petroleum Ministry suggested imposing additional excise duty on diesel cars to recover a part of the Rs 67,000 crore subsidy on diesel. Today, diesel cars account for almost 50 per cent of the compact car segment, which is roughly half of the total car sales in India. <br /><br />Industry sources affirm that the “cost-saving fuel” is a widely popular alternative to the more prominent petrol and has buyers opting for vehicles running on it. “It is well-known that diesel vehicles are 20-25 per cent more fuel-efficient and emit 15-20 per cent lower greenhouse gases. Hence, higher use of diesel helps to reduce import of crude oil and also reduces overall CO2 emissions,” Mahindra & Mahindra (M&M) President (Automotive and Farm Equipment Sector) Pawan Goenka said. <br /><br />Sources also informed that presently, petrol cars up to 4 metres long with 1,200cc engine capacity and diesel cars of up to 4 metres long with 1,500 cc engine capacity attract 10 per cent excise duty. In addition, longer petrol and diesel cars with more engine capacities, respectively, attract excise duties at the rate of 22 per cent. <br /><br />Now the small diesel cars may attract an additional duty of Rs 15,000. <br />In recent times, the Indian automobile sector, predominantly cars, has gone on a topsy-turvy ride of sorts, with the overall monthly sales figures of each maker showing rises and dips, owing to several factors. <br /><br />Toyota Kirloskar Motor (TKM) Deputy MD (Sales and Marketing) Sandeep Singh confirmed, “The Indian car industry showed significant growth in the beginning of 2011, but could not maintain a bullish tempo throughout the year due to deterring factors such as rising fuel prices and spiraling interest rates.” <br /><br />Less price sensitive <br /><br />Singh, however, said, “Despite the overall slowdown in sales, Toyota saw strong growth last year, which can be attributed to the robust sales of the Etios and Liva, both diesel and petrol variants. Sale of our diesel cars grew 34 per cent.” <br /><br />The demand for diesel cars is so high that even the price hike did not affect them. It might be noted that between July 2011 and the present, the prices of Maruti Swift and Dzire have been hiked to the tune of Rs 45,000, but the demand for their diesel variants has shown no reduction. “In the last one month alone, we have continued to have 10-15 diesel Swift and Dzire bookings on a daily basis. The waiting period for the two variants is anywhere between 4-5 months and customers are willing to wait as they consider it worthwhile,” Rai of Mandovi Motors said. <br /><br />Extended EMI<br /><br />Hyundai dealer Trident’s Director Sameer Kumar also said that there is no apparent increase in bookings before the budget. “Most customers today opt for financial channels to buy a car. So even if there is an additional levy on diesel, customers would end up paying only an extra EMI or so, which is fine with most of them,” Kumar said. <br /> <br />If diesel is the first preference for car buyers, there are reasons for it. According to General Motors India Vice-President P Balendran: “There is change in consumer behaviour as the demand for diesel-driven vehicles in the last few days has gone up slightly. But in our case, there is a 5-10 per cent incremental demand for diesel cars compared to normal and expected market conditions.” <br /><br />Customer demand has shifted more towards diesel vehicles largely due to the huge gap between diesel and petrol prices. The gap has now widened to as much as Rs 27 or nearly 60 per cent, mainly because the government at the Centre did not have the political courage to raise taxes on diesel to realistic levels. <br /></p>
<p>Despite the widespread fear that the central government will levy a hefty additional tax on diesel cars, the car dealers are not witnessing any unusual spurt in bookings.<br /><br /></p>.<p>They are saying that in any case, the demand for diesel cars is always higher than petrol cars and the trend remains consistent. <br /><br />Said Maruti Suzuki dealer Mandovi Motors’ Chief General Manager (Sales) K Yeshwant Rai: “The demand for diesel cars only continues to be on the rise. Bookings for diesel cars are constantly increasing and the hike in diesel tax is not worrisome.”<br /><br />Maruti’s two match-winners have been the Swift and its sedan version, the Swift Dzire, both of which, underwent a facelift recently. Ever since their inception, and specifically, with the launch of their respective diesel variants, both cars have enjoyed long waiting period. <br /><br />Fresh tax<br /><br />The speculation on a fresh tax on diesel cars began in the recent weeks when the Petroleum Ministry suggested imposing additional excise duty on diesel cars to recover a part of the Rs 67,000 crore subsidy on diesel. Today, diesel cars account for almost 50 per cent of the compact car segment, which is roughly half of the total car sales in India. <br /><br />Industry sources affirm that the “cost-saving fuel” is a widely popular alternative to the more prominent petrol and has buyers opting for vehicles running on it. “It is well-known that diesel vehicles are 20-25 per cent more fuel-efficient and emit 15-20 per cent lower greenhouse gases. Hence, higher use of diesel helps to reduce import of crude oil and also reduces overall CO2 emissions,” Mahindra & Mahindra (M&M) President (Automotive and Farm Equipment Sector) Pawan Goenka said. <br /><br />Sources also informed that presently, petrol cars up to 4 metres long with 1,200cc engine capacity and diesel cars of up to 4 metres long with 1,500 cc engine capacity attract 10 per cent excise duty. In addition, longer petrol and diesel cars with more engine capacities, respectively, attract excise duties at the rate of 22 per cent. <br /><br />Now the small diesel cars may attract an additional duty of Rs 15,000. <br />In recent times, the Indian automobile sector, predominantly cars, has gone on a topsy-turvy ride of sorts, with the overall monthly sales figures of each maker showing rises and dips, owing to several factors. <br /><br />Toyota Kirloskar Motor (TKM) Deputy MD (Sales and Marketing) Sandeep Singh confirmed, “The Indian car industry showed significant growth in the beginning of 2011, but could not maintain a bullish tempo throughout the year due to deterring factors such as rising fuel prices and spiraling interest rates.” <br /><br />Less price sensitive <br /><br />Singh, however, said, “Despite the overall slowdown in sales, Toyota saw strong growth last year, which can be attributed to the robust sales of the Etios and Liva, both diesel and petrol variants. Sale of our diesel cars grew 34 per cent.” <br /><br />The demand for diesel cars is so high that even the price hike did not affect them. It might be noted that between July 2011 and the present, the prices of Maruti Swift and Dzire have been hiked to the tune of Rs 45,000, but the demand for their diesel variants has shown no reduction. “In the last one month alone, we have continued to have 10-15 diesel Swift and Dzire bookings on a daily basis. The waiting period for the two variants is anywhere between 4-5 months and customers are willing to wait as they consider it worthwhile,” Rai of Mandovi Motors said. <br /><br />Extended EMI<br /><br />Hyundai dealer Trident’s Director Sameer Kumar also said that there is no apparent increase in bookings before the budget. “Most customers today opt for financial channels to buy a car. So even if there is an additional levy on diesel, customers would end up paying only an extra EMI or so, which is fine with most of them,” Kumar said. <br /> <br />If diesel is the first preference for car buyers, there are reasons for it. According to General Motors India Vice-President P Balendran: “There is change in consumer behaviour as the demand for diesel-driven vehicles in the last few days has gone up slightly. But in our case, there is a 5-10 per cent incremental demand for diesel cars compared to normal and expected market conditions.” <br /><br />Customer demand has shifted more towards diesel vehicles largely due to the huge gap between diesel and petrol prices. The gap has now widened to as much as Rs 27 or nearly 60 per cent, mainly because the government at the Centre did not have the political courage to raise taxes on diesel to realistic levels. <br /></p>
