The Hindu Business Line : Auto cos smell an opportunity

New Delhi, June 4 The fuel price hike means different things to car and to two-wheeler companies. While Maruti and Hyundai smell an opportunity to sell more compact cars that provide better fuel efficiency, two-wheeler makers do not see any major impact.

“Whenever there is a fuel price hike, there is a temporary dip in the market. But this is a short term phenomenon. Eventually there is a shift to more compact and fuel-efficient cars,” said Mr Mayank Pareek, Chief General Manager, Marketing and Sales, Maruti Suzuki India. On the other hand, fuel prices matter relatively less to potential buyers of premium cars.

Hyundai also expressed similar sentiments. “The industry is already under pressure because of rising input costs and hardening interest rates. The fuel price hike may aggravate things further,” said Mr Arvind Saxena, Senior Vice-President, Sales and Marketing, Hyundai Motors India. At the same time, he held that “this is a phase where I see the shift will be towards compact cars and the demand for more fuel-efficient cars and alternate fuels will increase”.

Honda Siel Cars India, which makes premium cars, also tried to underplay the impact of the fuel price hike. “Any such move is a dampener. The luxury segment may not be affected. But in case of premium cars there could be some impact. But considering our strength in fuel efficiency in our segment we will not be impacted significantly,” said Mr Jnaneshwar Sen, Senior General Manager, Marketing and Sales, Honda Siel Cars India.

TVS Senior Vice-President, Mr R. Chandramouli, ruled out any major impact stating that the consumers were expecting a much higher increase and so the current price hike would not have significant impact on sales. Similarly, a Hero Honda official said that it would not have repercussions on the overall demand, but there would be a possible shift towards the fuel-efficient entry level 100cc bikes.

Mr Eric Leblanc, Managing Director, Volvo India Pvt Ltd, said fuel constitutes almost up to half the operating costs in the transport economy of commercial vehicles and every hike was a reminder to make transport more efficient. While fuel hike is a stress for all, it was also an opportunity for everyone to take urgent steps to make transport more sustainable, safe and efficient.

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