While petrol car sales have fallen, diesel cars continue to perform well for the country’s largest car maker, Maruti Suzuki. Diesel cars outselling petrol engined ones across many segments has to do with diesel engines’ inherent fuel efficiency and the lower price of diesel when compared to that of petrol. Come September 2013, Maruti Suzuki will go ahead with the planned expansion of the Manesar car factory. The new assembly line at Manesar is expected to add 150,000 cars/year to the factory’s current output of 1.5 million units/year.
The commissioning of the 3rd assembly line at Manesar will happen simultaneously with Maruti Suzuki’s new diesel engine factory. The diesel engines churned out from the diesel engine factory will be used on Maruti Suzuki’s diesel cars produced at the third assembly line at the Manesar factory. Maruti uses the Fiat 1.3 Liter Multijet turbo diesel engine on a range of its best selling car models such as the Swift hatchback, Ertiga MPV and the Swift Dzire compact sedan. This peppy and fuel efficient diesel engine is used on a range of cars, across manufacturers, in India.
Due to the huge demand for diesel engined cars over the last couple of years, Maruti signed a new agreement with Fiat India to source more Multijet turbo diesel engines. Maruti’s new diesel engine factory is expected to ease pressure and allow Maruti to produce more diesel engine cars at Manesar. The increase in production is expected to reduce waiting periods, a major bane of best selling diesel engined cars in Maruti Suzuki’s line up. Quick availability of diesel engined cars such as the Swift, Dzire and Ertiga could lead to a minor sales boost for Maruti Suzuki as car buyers who opted for other brands owing to long waiting periods could come back to the Maruti fold.
All said, the Indian car industry shows no signs of reversing the sales slowdown. With the diesel prices partially deregulated, the price of diesel could touch the 60 rupee mark by the end of 2013. At that price, it will remain to be seen whether car buyers will continue to buy diesel powered cars at the same rate as they have been doing so currently. With the capacity expansion at Manesar, Maruti Suzuki, it seems is betting on car buyers to continue their buying of turbo diesel engined cars.