Maruti Suzuki reduces petrol car production following petrol price rise

Petrol prices have been increased and its negative impact has been immediately felt in the auto industry. Demand for petrol vehicles is on a downward slide and major auto companies are beginning to feel the pinch.

This is exactly what had happened with India’s major auto manufacturer Maruti Suzuki India Limited. The company has immediately sensed a dip in demand for petrol vehicles while waiting lists for diesel vehicles are growing by the minute so much so that the company it finding it difficult to keep up with demand. Conversely petrol engine vehicles are being kept at arm’s length by consumers, making the company cut production.

Maruti Suzuki petrol cars such as WagonR, Alto, Zen Estilo and A Star have been receiving limited if negligible demand in the past quarter and the final petrol price hike is sure to be the last nail in the coffin. Though oil companies have reduced petrol prices by Rs. 2 the price hike has made the remaining few petrol car aficionados also turn to diesel cars primarily due to the huge price difference of Rs.30 between the two auto fuels. In the mean while 80% of the company bookings are for diesel vehicles. Maruti Ertiga is in great demand so much so that buyers will have to wait a few months for delivery. The same is the story for Maruti Dzire and Swift Diesel. The company is also setting up a diesel engine plant in Gurgaon at an investment of Rs.1700 crores while they have a deal with Fiat to source diesel engines for the coming three years to help the company meet demands.