The country's second largest car maker Hyundai Motor said it is unlikely to achieve its sales target for this year on account of higher petrol prices and increased cost of borrowings.
"In the beginning of the year, we had forecast a 6-7 per cent sales growth. That may be difficult to achieve now," Hyundai Motor India marketing and sales director Arvind Saxena told reporters on the sidelines of the second Siam HR conclave in Mumbai.
Saxena said because of cheaper diesel price compared to petrol, customers are preferring to diesel cars.
"Petrol price is one of the factors (for lower sales growth). Interest rates have not come down, which is a bigger issue. Inflation is still up, economy is still down...so overall sentiment is down," he said.
Diesel models currently comprise 28 per cent of Hyundai's overall vehicles sales, he said.
Hyundai sold 6,16,039 cars and sport-utility vehicles in the previous year. Though the company's domestic sales were up 4.8 per cent in 2011, which stood at 3,73,709 units, its outbound shipments dropped 1.9 per cent to 2,42,330 units.
As to the proposed move to hike duty on diesel cars, Saxena said it would not help the government to augment the revenue collection.
"There are many calculations floating around in the market, but I am not very sure whether it will help augment the revenue which the government is looking at."