The demand for diesel cars has started softening for the first time in many years according to Maruti Suzuki chairman RC Bhargava. Maruti is India's biggest car manufacturer. (Read: Five reasons why 2013 may see weak sales)
"Six months ago, most diesel cars were on the waiting list and there was no need for discounts as they were all selling well, but after Diwali, the demand for several diesel models is not as strong as earlier. Barring Swift, DZire, Ertiga and Duster, which have a waiting list, other cars are all available off the shelf and some of them have discounts too," Mr Bhargava told NDTV Profit on Monday. (Watch: RC Bhargava, chairman of Maruti Suzuki, on diesel cars)
Rising diesel prices may be one of the reasons for the softening demand of diesel cars, Mr Bhargava said. Diesel price went up by Rs 5 in September 2012 and the government is likely to hike diesel prices further in 2013 to halt the pace of dieselization. (Also read: Maruti versus M&M: Which stock to bet on in 2013)
“Petrol car sales have declined for a second straight year. In 2013-14, they are likely to flatten out and so all growth has to come from the diesel side. If diesel prices also go up that would be another setback for the industry," Mr Bhargava said.
He added that high ownership cost is also affecting car sales.