Latest Car News in India

Wednesday, February 29, 2012

By Manoj Kumawat

Dual Diesel pricing impractical, car cos vociferously oppose proposed tax on diesel cars

It is after the opposition by Ford, Renault and Mahindra that the proposed tax on Diesel cars seems to be averted. Union heavy industries minister Praful Patel in a recent interview has reportedly said that consumption of diesel is less than 5 percent by the automobile sector and a large chunk of diesel is being consumed by agriculture, industries and transportation. On the other hand, Mr Patel has also said that dual pricing for diesel is not feasible due to the practicalities involved in it. Notably, the government has proposed to hike tax on diesel cars following the assumption that cars consume the subsidized diesel meant for agriculture and other uses. Following the reports, there has been upsurge in the industry and several car companies such as Ford, Renault and Mahindra have given voice to their opposition recently.

Mahindra Xylo Pictures

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Mr Patel has though emphasized that cars are not meant to use the subsidized diesel meant for some other sector. However, auto experts and car companies think that the tax on diesel cars will negatively impact the sale of diesel cars in India. Primary votaries of the opposition are Ford, Renault and Mahindra. Where Ford sees the hike as impending the growth of the auto industry. Renault and Mahindra thinks that the tax on diesel is retrograde for the industry as a whole.

Renault Pulse Pictures

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Notably, Mahindra has a large number of diesel car offerings in India including new Mahindra Xylo, Mahindra Bolero besides others and Renault is targeting the diesel car segment heavily by launching its small car Renault Pulse in diesel only option. With the rise in tax on diesel cars, the sale of diesel cars will decrease as the diesel car prices are expected to go up by Rs 80,000 and this will impact the already slow car sales in India.

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