Costly fuels add to industry’s woes

Murali Gopalan | Updated on: Sep 27, 2018

Petrol and diesel prices are reaching dizzy levels

As if the insurance drama and high material prices are not bad enough, the auto industry now has to deal with the reality of diesel and petrol prices going through the roof.

The spiral has been pronounced in recent weeks with petrol, in particular, having breached the ₹90/litre mark in some cities. Oddly enough, customer protests have not been too vocal and it is only politicians whose decibel levels have been predictably higher.

Yet, it is not as if everything is hunky-dory with a lot of resentment simmering beneath the surface. With the pressure on public transport mounting by the day, customers would rather have their own bike or scooter to get around in towns and cities. Yet, the fuel prices are beginning to pinch their wallets and they could now look for other options.

It’s here that mileage will be the new norm going forward and models that assure optimal fuel efficiency will make the cut with buyers. This would mean compact cars will be back in the reckoning as also entry/executive commuter bikes and scooters.

There is a school of thought that believes today’s customers have more money in their hands and will not be deterred by pricier diesel or petrol. In that case, SUVs will continue to do well as also sporty motorcycles even while there may not be a dramatic spurt in sales. Auto-makers will be hoping that the good times continue but the headwinds are getting stronger by the day.

Published on September 27, 2018
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