OEMs in India Plan to Invest in Popular Diesel Powertrains


Ammar Master

Vehicle makers have revived their plans to invest in diesel engine manufacturing facilities in India after the Indian government decided not to implement any additional tax on diesel-powered vehicles in the Union Budget 2012‐13 that was announced earlier this year. The decision to further invest in manufacturing is being driven by the strong demand for diesel-powered vehicles, which account for nearly half of all passenger vehicles sold in India, suggests Ammar Master, senior analyst, LMC Automotive*. Excerpts from a recent perspective in partnership with J.D. Power Asia Pacific on diesels in India:

“The main reason behind the strong demand for diesel-powered vehicles is the cheaper price of diesel at the pumps. In fact, the price gap between diesel and gasoline (petrol) has widened by as much as 40% since the government deregulated gasoline in June 2010.

As a result, the unexpected surge in demand for diesel vehicles caught India’s largest vehicle maker Maruti Suzuki off guard and the company lost sales. Continue reading ›