Carmakers witness slowdown in diesel car bookings

The order book is nothing to be happy about and the long waiting period of the past is all but over. Eight of the 12 top-selling diesel cars are now available off the shelf, indicating that slowdown has started to impact sales of diesel cars as well.

A 5-6 percent increase in car prices after the Budget and the rising road taxes have delivered a body blow to the already suffering passenger car market, especially keeping in mind the recent boost to diesel car production by automakers, including Ford, Hyundai, Maruti Suzuki. "The market environment is tough. Almost all manufacturers have free availability of diesel vehicles, and the waiting lists for some have come down significantly," says Ford India president & MD Michael Boneham. "In some cases, incentives are being doled out on diesel cars also," he says.

Diesel models of Maruti Suzuki Swift, Hyundai i20, Toyota Etios, Volkswagen Polo and Vento, Mahindra & Mahindra Scorpio and Bolero are available off the shelf now. The waiting period of hotselling Swift Dzire and Hyundai Verna has shrunk by as much as one to two months depending on location from four to six months till March. However, the waiting period of XUV 5OO and Maruti Suzuki Ertiga still remains high at 3-6 months. The demand for diesel cars had gone through the roof over the last one year with price gap between petrol and diesel widening to over Rs 30 a litre. Also Read: Delivery of top-end Maruti Suzuki Ertiga delayed

In the last three months, the on-road price of cars has gone up by Rs 30,000 to Rs 1 lakh. Also, prospective buyers have begun deferring purchases at the time of delivery.

While there are no discounts announced by any of the automakers on diesel cars, a field check reveals that the dealer discounts now range from Rs 3,000 to Rs 5,000 on diesel cars from Tata Motors, Volkswagen, General Motors, and Hyundai

Manufacturers have realigned their production in the last three to six months in favor of diesel, especially after the budget, as there was no hike in excise duty on diesel cars. Ford India had invested $72 million in adding 80,000 units of diesel engine capacity earlier in the year, Hyundai India added 50% to its capacity and Maruti Suzuki got one lakh more units from Fiat for its diesel lineup. "Although the price difference between petrol and diesel is about Rs 34 a litre, the demand for diesel cars have not picked up," says P Balendran, VP, corporate affairs, GM India. "The market remains depressed because of high interest rates, inflation and negative sentiment.”

Sandeep Singh, deputy managing director - marketing, Toyota Kirloskar says the last months have made a huge difference in the market and Etios diesel cars today are available off-the-shelf, "Its not only the price increase because of excise duty alone but even the on road price of vehicles have also gone up due to increasing road taxes, that has hit the demand hard. The enquiry levels have gone down be it on petrol or diesel," said Singh.