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NEW DELHI: The effect of higher petrol prices is telling on the car industry. With consumers gradually shifting to diesel models, petrol variants are increasingly finding no takers in the market, forcing companies to shut down their production.
As petrol inventories pile up at dealerships and stockyards of companies, manufacturers are left with no choice but to cut production. In any case, companies are being forced to dole out incentives and discounts to boost sales of petrol cars. "So the growth is coming only at a cost," said a company official, requesting not to be named.
Top companies are slashing petrol car output to align themselves to the new market reality and these include Maruti Suzuki, General Motors and Toyota.
Maruti has already said that sales of its petrol cars are under pressure and are likely to fall by 50,000 units this fiscal. Company CEO Shinzo Nakanishi said that fall in volumes could be even steeper if petrol prices continue to move up sharply while diesel remains at the same level.
The company had shut production of key petrol models like Alto, Estilo and A-Star for three days in May-end and early this month. And it is set for another production shutdown from Sunday for plant maintenance that runs for one full week. "Petrol car sales are very low as the market sentiment is down... We do not believe in creating excess stock. So, we adjust our production accordingly," Maruti's managing executive officer (marketing and sales) Mayank Pareek said.
General Motors has also undertaken a similar exercise and is observing NPDs (no-production days) to align production to market reality. "We align production to market demand and observe NPDs to avoid inventory build-up," says P Balendran, V-P at GM India. "They (NPDs) are happening frequently now," he said, pointing to the difficult times for petrol-only models like the Spark and U-VA minis and Optra and Aveo sedans.
Toyota Kirloskar Motors has also stopped production of petrol cars. "We are having some amount of inventory for petrol cars and it has gone up to over 30 days. To control the stock from piling up, we have stopped production of petrol cars from June 16," Toyota Kirloskar Motor (TKM) deputy MD (commercial) Shekar Viswanathan said. TKM rolls out petrol variants of its small car Liva, sedans Etios and Corolla Altis.
Hyundai has also cautioned on the ill-effects of high petrol prices when diesel remains virtually at the same level. "The recent hike in petrol prices has depressed market sentiment. And with the macro-economic indicators providing no cause for cheer, the demand outlook does not look very bright," said Arvind Saxena, director (marketing and sales) at Hyundai India.
And while they cut production of petrol cars, companies are also taking steps to boost output of diesel variants. Maruti is increasing diesel engine production by 4 lakh units from the current level of 3 lakh engines annually. Toyota and Hyundai are also considering setting up diesel engine plants to meet the higher demand for diesel variants.
Auto companies cut petrol car output - The Times of India
As petrol inventories pile up at dealerships and stockyards of companies, manufacturers are left with no choice but to cut production. In any case, companies are being forced to dole out incentives and discounts to boost sales of petrol cars. "So the growth is coming only at a cost," said a company official, requesting not to be named.
Top companies are slashing petrol car output to align themselves to the new market reality and these include Maruti Suzuki, General Motors and Toyota.
Maruti has already said that sales of its petrol cars are under pressure and are likely to fall by 50,000 units this fiscal. Company CEO Shinzo Nakanishi said that fall in volumes could be even steeper if petrol prices continue to move up sharply while diesel remains at the same level.
The company had shut production of key petrol models like Alto, Estilo and A-Star for three days in May-end and early this month. And it is set for another production shutdown from Sunday for plant maintenance that runs for one full week. "Petrol car sales are very low as the market sentiment is down... We do not believe in creating excess stock. So, we adjust our production accordingly," Maruti's managing executive officer (marketing and sales) Mayank Pareek said.
General Motors has also undertaken a similar exercise and is observing NPDs (no-production days) to align production to market reality. "We align production to market demand and observe NPDs to avoid inventory build-up," says P Balendran, V-P at GM India. "They (NPDs) are happening frequently now," he said, pointing to the difficult times for petrol-only models like the Spark and U-VA minis and Optra and Aveo sedans.
Toyota Kirloskar Motors has also stopped production of petrol cars. "We are having some amount of inventory for petrol cars and it has gone up to over 30 days. To control the stock from piling up, we have stopped production of petrol cars from June 16," Toyota Kirloskar Motor (TKM) deputy MD (commercial) Shekar Viswanathan said. TKM rolls out petrol variants of its small car Liva, sedans Etios and Corolla Altis.
Hyundai has also cautioned on the ill-effects of high petrol prices when diesel remains virtually at the same level. "The recent hike in petrol prices has depressed market sentiment. And with the macro-economic indicators providing no cause for cheer, the demand outlook does not look very bright," said Arvind Saxena, director (marketing and sales) at Hyundai India.
And while they cut production of petrol cars, companies are also taking steps to boost output of diesel variants. Maruti is increasing diesel engine production by 4 lakh units from the current level of 3 lakh engines annually. Toyota and Hyundai are also considering setting up diesel engine plants to meet the higher demand for diesel variants.
Auto companies cut petrol car output - The Times of India
