A close look at the reasons why car maker Hyundai was not able to launch Hyundai Eon Diesel, Hyundai Santro diesel or other low priced diesel cars in India, suggests that it is the unclear stand of the government that desisted the car maker from taking a firm decision. The dilly dallying attitude over the special tax on diesel cars in India has marred the car industry lately and it continues to do so. However, there was a breather in between when the government had deferred the decision in the Budget. Now that the position is unclear, Hyundai India as well as other car makers is adopting a go slow strategy for India. There are two reasons behind this strategy. First is the low demand and second is the unclear stand by the government over the imposing of tax on diesel cars in India.

Hyundai has reportedly deferred its plan of stepping up the diesel car production and has instead boosted the supply from Korea in the meantime to meet out the demand. Meanwhile, the decision on Hyundai India diesel engine plant is in the pipeline and no decision on it has been taken. Sources also said that the diesel engine plant has been on cards since 2009 and no decision on it could be taken for one or the other reasons. Following this the Hyundai Santro diesel, Hyundai i10 diesel and other proposed diesel cars by Hyundai are still a distant dream.

However, other car makers such as Maruti are playing high on diesel cars and as per reports, the largest car maker has invested Rs 1700 crore in boosting the diesel engine production capacity. Meanwhile, Maruti has also entered into an alliance with Fiat for the supply of diesel engines to it. As per the contract, Fiat will be supply one lakh diesel engines each year for three years to Maruti.