Latest Car News in India

Wednesday, September 14, 2011

By Pranjal Gera

Automobile companies mad at the Government

Automobile companies are having trouble deciding upon what their future strategy should be. Top autmobile companies have criticised Country's government for not being clear regarding the prices of Diesel. These companies are uncertain whether government is going to decontrol diesel prices or not. Several government officials have been giving out statements regarding the issue. Some have said that the government would soon decontrol the prices of diesel, causing a jump in the price of the fuel. Whereas, others have said that there are no such plans being considered by the government.

The huge gap between the prices of petrol and diesel fuels has resulted in rising demand for diesel vehicles. Now, automobile companies are confused as to what their next step should be. According to them, if the government is not planning to decontrol diesel prices, they will invest in the diesel engine technologies. But if the government decides to do so, these investments will do no good, as the demand for diesel vehicles will again go down.

Praful Patel, The Heavy Industries Minister, last week, said that the government has no plans of decontrolling the diesel prices, as it has social obligations. However, The Deputy Chairman of Planning Commission, Montek Singh said that the prices of this fuel should be freed.

Automobile companies such as Maruti Suzuki, Toyota, Mercedes and Hyundai have criticized the government and said that the confusion is affecting their business and strategies. Government freed the petrol prices last year, which widened the gap between diesel and petrol prices. This caused increase in demand of diesel cars.

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