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Diesel cars to cost more from today

By Motortrend India Staff   |   31 March,2010

Diesel passenger vehicles are expected to cost more than their petrol counterparts from April, with car companies looking at passing on the investments made by them to meet the new Bharat Stage IV emission norms (BS-IV) (equivalent to Euro-IV) to the end customers. This is on the back of the improvements achieved in diesel under the BS-IV and hence involving significant investments made by the companies to get their engines calibrated for it. An investment of close to Rs. 25,000 crore is believed to have been made by auto companies to meet the new emission norms.

A price increase of 1-2 per cent is expected across the board by the car makers due to BS-IV this April. This will be the third price hike by the automobile industry after January and post-budget in February, amounting together to around 3-4 per cent.

Typically, a diesel passenger vehicle costs around Rs. 70,000 to Rs. 1 lakh more than petrol passenger vehicles, depending upon the brand and the model. An increase in fuel prices by Rs 0.50 a litre is expected to decelerate the demand for the diesel cars. As much as 55-60 per cent vehicles in the Indian market are petrol passenger vehicles. General Motors India vice-president (corporate affairs) P Balendran said, “We will increase prices between 0.5-1.5 per cent across our models expect Beat. The price rise over diesel cars will be slightly more than the petrol due to the improvement achieved.”

Explaining what new emission norms really mean, Maruti Suzuki chief general manager (research & development) CV Raman said, “In terms of diesel, there is more impact as from 350-ppm it will come down to 50-ppm. For petrol, it will be brought down from 150-ppm to 50-ppm, which is an achievement making emission norms 50 per cent more stringent.”

“There will be an increase in prices but we have not quantified yet as to how much,” Maruti Suzuki India executive officer (marketing & sales) Mayank Pareek said.

Hyundai Motor India director (marketing & sales) Arvind Saxena said, “There will be an increase in prices from April across the board. The increase in prices will be more on diesel vehicles compared to petrol.” Even Tata Motors has talked about increase in the prices.

All the 13 cities including New Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Bangalore, Lucknow, Kanpur, Agra, Surat, Ahmedabad, Pune and Sholapur that follow BS-III are scheduled to move up to BS-IV from April.

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