MUMBAI: Japanese carmakers Honda and Toyota plan to develop diesel engines for their passenger cars even as rivals like Maruti Suzuki and Hyundai spend more on building and marketing diesel cars to keep pace with demand.
Honda, which has only petrol-powered vehicles in its portfolio in the country, is developing a small diesel engine for the Indian market, while Toyota will soon roll out a diesel version of Corolla Altis, making it its first diesel-driven passenger car in India.
“We feel the need to develop a diesel engine,” said Jnaneswar Sen, vice president (marketing), Honda Siel. He pointed out that more than half the vehicles sold in Europe are diesel. The company is yet to decide the timeline for the launch and which cars it will power, an official said.
Toyota, which sells only diesel versions of its utility vehicles and SUVs such as Innova and Fortuner in the country, has 90% of sales coming from diesel vehicles.
“While diesel is cleaner advanced technology, gasoline will also be important for us,” said Sandeep Singh, deputy MD (sales and marketing) of Toyota Kirloskar Motors.
Other carmakers such as Maruti Suzuki, Hyundai Motor, Tata Motors, General Motors and Ford too have stepped up production of diesel cars to cash in on increasing demand for diesel-powered cars that are more fuel efficient and environment friendly than petrol-driven cars.
Maruti Suzuki, which sells 60% of its popular Swift, Dzire and Ritz cars in diesel versions, plans to roll out smaller diesel cars, using Fiat’s 700cc engine. Maruti, which sources diesel engines from Italian carmaker Fiat, also plans to get 1.6 litre and 2 litre engines.
“While we will develop diesel engines, Maruti’s strength will continue to be gasoline as we make fuel efficient petrol engines,” said IV Rao, managing executive officer (engineering) of Maruti Suzuki.
With Suzuki’s global tieup with Volkswagen, Maruti may source diesel engines from the German carmaker in the coming years.
Its main rival Hyundai Motor is considering making diesel engines. “Currently we import are diesel engines. To have them in small cars it has to be cost effective,” said Arvind Saxena, director, marketing and sales, Hyundai Motor India. Currently Hyundai’s i20, Getz, Verna and Sonata have diesel options.
The Indian car market, which grew 25% to 1.9 million vehicles last year, is dominated by petrol models. Three out of every four cars that the country’s largest carmaker Maruti Suzuki sells is petrol-driven.
But the proportion of diesel sales has been going up steadily from 15% in 2006 to 25% in 2009, thanks to superior technology and fuel efficiency that modern diesel engines offer.
Traditionally, high maintenance and premium pricing kept customers away from diesel models. This is no longer the case.
Many customers prefer diesel versions because of better fuel efficiency that makes up for the premium they pay, say analysts.
“What matters to the customer is the running cost and therefore the preference for a diesel model,” said a Mumbai-based analyst.
“Since majority of consumers go for car financing, the difference in monthly installment is marginal,” he added.
Kapil Arora, partner, automotive, at Ernst and Young, said he believed that there would be more diesel car sales in the next 4-5 years if diesel subsidies continue and if the manufacturers can mass supply diesel vehicles.
Source;
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