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Petrol price hike: Honda advances launch of diesel Brio to Diwali 2012

With petrol prices touching an all-time high and no diesel models to support sales, Honda is planning to advance the launch of its diesel variant of Brio around Diwali.

Mail Today Bureau | June 4, 2012 | Updated 15:48 IST

With petrol prices touching an all-time high and no diesel models to support sales, Honda is planning to advance the launch of its diesel variant of small car Brio around Diwali.

"The company was initially planning to launch the diesel model by 2013. However, with the increasing demand for diesel cars and the hike in petrol prices, the company is advancing the launch of Honda Brio by Diwali this year," a company source told MAIL TODAY on condition of anonymity.

"The company has already asked the R& D department to speed up the work, and if required, it may also go for a third party arrangement," the source said.

In the last one year, the price of petrol has gone up considerably fuelling the demand for diesel cars, which account for more than 60 per cent sales at present.

Honda has no diesel variant in its stable, which is becoming a big disadvantage for the company. Honda Brio will become the first car to have the diesel engine followed by City and Jazz.

"With the huge surge in the price of petrol, there is a massive demand for the diesel model. We are already giving discount on our cars but it is not possible beyond a point," a marketing official from Honda said.

Honda is not the only company to advance launch of diesel cars . Renault has also advanced the unveiling of its diesel model. Even Volkswagen is looking for models that run on other fuels like CNG. Others are trying to sweeten the deal with various discounts and offers.

Sale of diesel vehicles in the country jumped by 35 per cent last fiscal while that of petrol variants dropped by 15 per cent. The sale of petrol cars will see further decline with the latest hike of ` 7.50 per litre.

A day after the increase, Hyundai announced a "petrol price lock assurance programme" that will insulate its customers from the new fuel price rise for the next seven months. The programme covers people who will buy petrol models of Eon, Santro, i10, i20, Accent and Verna till May 31.

"The hike of this magnitude is neither good for the industry nor customers," Arvind Saxena, director, marketing and sales, Hyundai Motor India, said.

Other automobile manufacturers have already started giving discounts and freebies on petrol models and could introduce more such offers following the hike of petrol . According to automobile body Society of Indian Automobile Manufacturers (SIAM), there is a need for the government to reconsider its proposal for such a steep increase in the price of petrol.

"There is a need to seriously consider the option of a moderate increase in the price of diesel before it impacts the growth of the industry," SIAM said.

In a statement, Siam said that there is a requirement to look at the petroleum product pricing policy in a comprehensive manner and remove distortions so that downstream products market do not get disturbed.

"The need of the hour is to bite the bullet by reducing the price hike on petrol and revising the price of diesel, which will bring in more revenue for the government as well as some level of parity between the two competing fuels for the industry," SIAM said.

Courtesy: Mail Today

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