Go Back   Team-BHP > BHP India > The Indian Car Scene


Reply
 
Thread Tools Search this Thread
Old 6th June 2012, 13:59   #16
Senior - BHPian
 
mayankjha1806's Avatar
 
Join Date: Jan 2011
Location: BLR/Gurgaon
Posts: 2,133
Thanked: 820 Times
Default Re: Maruti cuts down Petrol car production. Has it lost the Plot?

I think they are just responding to market dynamics and are ensuring they have enough capacity if the trend changes somehow, due to policy or economic changes.

Any sane minded leadership will do the same, and they are no different. All probably they are doing is responding to market demands more proactively.
mayankjha1806 is offline   (1) Thanks Reply With Quote
Old 6th June 2012, 14:01   #17
BHPian
 
Join Date: Jul 2011
Location: Kolkata
Posts: 88
Thanked: 26 Times
Default Re: Maruti cuts down Petrol car production. Has it lost the Plot?

Imbalance was created by our super-creative Government and thus everything else is just a reaction to that action!

Really, what would the manufacturers do, if they are not able to sell petrol mills? :-(
Sad state of affairs.

Seems like demand-supply is regulated by our Government and not the market itself.
SupratikDebnath is offline   (1) Thanks Reply With Quote
Old 6th June 2012, 14:14   #18
Senior - BHPian
 
Join Date: Dec 2007
Location: Bangalore
Posts: 1,062
Thanked: 291 Times
Default Re: Maruti cuts down Petrol car production

Isn't it obvious? Alto sales have dropped 10K units a month! They obviously cannot keep producing 30K units a month. I seriously have my doubts if Alto can even sustain the 20K sales.

Anybody who is in the market for a Alto or WagonR will definitely consider the old Indica eV2.

Last edited by blue_pulsar : 6th June 2012 at 14:18.
blue_pulsar is offline   (1) Thanks Reply With Quote
Old 6th June 2012, 14:49   #19
BHPian
 
Join Date: Nov 2009
Location: RJ-02,DL,MH-12
Posts: 920
Thanked: 1,080 Times
Default Re: Maruti cuts down Petrol car production

Have you read the joint statement made by the three oil companies yesterday (5 June 2012) of how they have been ripped off their margins et al.
- Can someone please advise them to make statement which could be read and understood by the reader. They sell in litres (retail) and talk in barrels (in statement made to public), no wonder a large chunk of readers could not make out what they want to say.
- Why in this world our excise duties, central and state taxes are linked as percentage of the fuel prices so that the taxes increase simultaneously with increase in fuel prices? Why can't we have an absolute number say Rs X/litre as a fixed tax / duty amount so that the impact of global crude price is clear to the end user. The revenue of government even in the case of fixed taxes is bound to increase with increased consumption, but no we are at their disposal and are suffering because of them. The government is here to fool us.
- The government is against monopoly (with all kinds of laws to check it) why they have created a monopoly / cartel in fuel market?
i74js is offline   (1) Thanks Reply With Quote
Old 6th June 2012, 15:47   #20
Distinguished - BHPian
 
hemanth.anand's Avatar
 
Join Date: Jan 2010
Location: Bengaluru
Posts: 2,159
Thanked: 5,912 Times
Default Re: Maruti cuts down Petrol car production

They have not lost the plot. In fact they are playing it perfectly.

The following is my take on this:
To support my argument, I have taken the OTR prices of Swift in Bangalore.
I'll take the base variant prices (rounded to the closest 10k).
2007 prices are from TBHP ownership reports. 2012 prices are from www.marutiswift.com (plus 90k for taxes/others in Bangalore)

2007, LDI-530000, LXi-440000
2012, LDI-650000, Lxi-530000
The difference for Swift petrol Vs Swift Diesel has risen from 90k to 120k
The difference between the petrol Vs Diesel cars for the manufacturing is around 40-50k
This simply means that, More diesel cars equals more profit.

Now for our Government's differential pricing policy.
Itís obvious that with this, petrol car sales will only diminish with time,
(My personal speculation is that there is a big 3-way nexus between our Oil companies, useless politicians and smart car manufacturers for this differential pricing to continue)
Leaving aside my personal thoughts, if I'm a business organization, my goal will always be to make big sales and huge profits.

Consider a situation where:
I have 2 products where 1 will give me bigger profits.
The profitable product is selling in high numbers and the lesser profitable good's demand is reducing by the day.
My thinking will be, "If I can reduce the production of the less-profitable product, I can increase my profits by a huge margin.
I'm sure that people will buy my products owing to my brand image.
This reduction in production will indirectly force majority of my customers to buy the more-profitable product.
Who cares which product gave me more profit as long as Iím raking benefits"

Maruti is exactly doing this.
As the evergreen proverb goes, Make hay while the sun shines
There is nothing surprising that Maruti has decided to do this.
hemanth.anand is offline   (1) Thanks Reply With Quote
Old 6th June 2012, 15:56   #21
BHPian
 
Equus's Avatar
 
Join Date: Sep 2006
Location: Bangalore
Posts: 872
Thanked: 158 Times
Default Re: Maruti cuts down Petrol car production

Maybe they are just slowing down on the duds like Astar/Estillo
In any case, MSIL knows indian market best. They will plonk the 3 cylinder diesel DDIS into WagonR as well soon..
Equus is offline   Reply With Quote
Old 6th June 2012, 16:55   #22
Senior - BHPian
 
Join Date: Dec 2006
Location: NH209
Posts: 1,607
Thanked: 700 Times
Default Re: Maruti cuts down Petrol car production

Petrol cars gives the maximum profits for the maruti, so the current trend is no smooth sailing for the company.

OT: What capacity diesel engine are they going to make in their Gurgaon plant?
ramzsys is offline   Reply With Quote
Old 6th June 2012, 17:18   #23
Senior - BHPian
 
Join Date: Apr 2010
Location: EU - Nordic
Posts: 1,563
Thanked: 953 Times
Default Re: Maruti cuts down Petrol car production

I can understand why MSIL wants to reduce petrol car production, but I don't think this will automatically translate to higher output for diesel cars - because MSIL is constrained by diesel engine availability.

Also, if the cut in production leads to higher waiting periods for petrol cars as well, there is a danger that people may opt for a car from the competition (esp Honda/Hyundai) and never come back.

Can MSIL launch Alto/Wagon-R with a 3-cyl diesel, I mean do they have access to such an engine? I think they will have to source it from outside (GM or Fiat) and will have to pay through their nose to get the engines.

GM is enjoying some success with Beat after putting a 3-cyl engine in it. Why would they want to share that engine with MSIL? Similarly, Fiat may want to keep the 3-cyl diesel engine for some smaller hatchbacks that they might launch in the future, especially at a time when Fiat is renewing their focus on Indian market to increase their "car sales" and not "engine sales".

Also, it is still unclear how the govt will handle petrol-diesel price difference. Either the price of diesel or the price of diesel cars (taxes) will almost certainly go up. Without clarity on govt policy on diesel (cars), why would MSIL ink any potentially expensive agreements to source 3-cyl diesel engines?
StarrySky is offline   Reply With Quote
Old 6th June 2012, 18:08   #24
BHPian
 
Join Date: Apr 2010
Location: Currently, New Delhi
Posts: 423
Thanked: 92 Times
Default Re: Maruti cuts down Petrol car production , Has it lost the Plot

Quote:
Originally Posted by ghodlur View Post

How is this being done?
Might call it the great Indian Jugaad (Improvisation). The fuel tank is replaced by a gas cylinder (often hidden inside the original petrol tank with modification). In a 'clean' install, you get the gas nozzle right under the petrol tank cap. I've seen this being done on a Bullet, and some low end bikes (100-125cc).

Since the low end bike engines are already frugal, the savings are enormous. Bullet owners might be doing this for lower operating costs perhaps.
JustCause is offline   Reply With Quote
Old 6th June 2012, 18:14   #25
BHPian
 
one-77's Avatar
 
Join Date: Oct 2010
Location: KL08/MH01
Posts: 358
Thanked: 198 Times
Default Re: Maruti cuts down Petrol car production

Quote:
Originally Posted by Equus View Post
Maybe they are just slowing down on the duds like Astar/Estillo
In any case, MSIL knows indian market best. They will plonk the 3 cylinder diesel DDIS into WagonR as well soon..
What 3-cylinder diesel DDIS?
I thought only Chevy, which co-developed the engine with Fiat had the rights to make such changes?
one-77 is offline   Reply With Quote
Old 6th June 2012, 19:48   #26
Senior - BHPian
 
bluevolt's Avatar
 
Join Date: Jan 2011
Location: New Delhi
Posts: 2,963
Thanked: 2,211 Times
Default Re: Maruti cuts down Petrol car production

What's the source of information? Any media reports? Something leaked by company officials?

I don't think that Maruti should cut down petrol car's production, that will no do any good. People have to wait months for getting a diesel variant and I am worried if same thing start happening with cars like Alto/WagonR.
bluevolt is offline   Reply With Quote
Old 6th June 2012, 21:51   #27
BHPian
 
Join Date: Jun 2011
Location: Trivandrum
Posts: 202
Thanked: 149 Times
Default Re: Maruti cuts down Petrol car production

The large price difference between petrol and diesel and the certainty that petrol prices will increase will reduce the demand for petrol cars. When I bought a petrol Dzire in end 2009, petrol cost 46 rupees and diesel about 36 rupees; the decision to buy the petrol version was that the difference in cost of fuel would be recouped only in about five years of running and was not worth it.

Soon the decision turned out to be wrong as petrol prices went to 50, 60, 70 and now 75, while diesel price increased to only 46.

The government policy of taxing petrol heavily and the very frequent price increases will only serve to kill the golden goose. Huge infrastructure devoted to petrol car production will lie idle as demand for these vehicles reduces, tax revenue from these cars will decline. The refineries will be faced with reduced sales of petrol, which any way is a product of refining crude.

So, how long will the government increase petrol prices? In my opinion, they are close to the ceiling, and the recent price reduction is an indication. Can petrol cost over 100 while diesel is under 50? And the refining cost of these are similar. Something has to give and some rationalization can be expected.

So, being an optimist, I will continue with the petrol Dzire. But of course, I may be wrong about the future of petrol.
SajiNSalin is offline   Reply With Quote
Old 6th June 2012, 22:24   #28
BHPian
 
misquitas's Avatar
 
Join Date: Jun 2008
Location: Panjim
Posts: 859
Thanked: 272 Times
Default Re: Maruti cuts down Petrol car production , Has it lost the Plot

Quote:
Originally Posted by teamveevee View Post
In fact all manufacturers should stop Petrol cars production and Oil companies should stop distributing petrol and convert the existing Petrol dispensers to dispense Diesel to reduce the line at the diesel pump. Once there is only Diesel cars, there is no question of additional diesel tax etc.
My views exactly. Petrol should not be distributed in petrol pumps. Since the government considers it a luxury, it should be sold in a mall or a jewellery store. Better still, with the anticipated drop in demand for petrol and possibly, the discontinuation of petrol in the future, the government should stock a few bottles of petrol and send them to various museums across the country. Fifty years from now, one may want to see what petrol once looked like, in the good old days.

I'm wondering when Maruti will place an order from Fiat/GM for a 3-cylinder 1.0 litre diesel engine for the Wagon-R, A-Star, Estilo, Alto? It they do it, they need not "cut down" on petrol car production. They can have it "shut down" completely.
misquitas is offline   Reply With Quote
Old 6th June 2012, 22:35   #29
Senior - BHPian
 
nitrous's Avatar
 
Join Date: May 2004
Location: UAE/Lon/Madras
Posts: 6,966
Thanked: 282 Times
Default Re: Maruti cuts down Petrol car production

This is better for buyers. There should be a drastic reduction in waiting periods for diesel cars. It's the need of the hour, if you ask me.
nitrous is offline   (1) Thanks Reply With Quote
Old 6th June 2012, 23:20   #30
BHPian
 
aroop's Avatar
 
Join Date: Mar 2008
Location: Kolkata
Posts: 125
Thanked: 19 Times
Cool Re: Maruti cuts down Petrol car production

Quote:
Originally Posted by i74js View Post
- Why in this world our excise duties, central and state taxes are linked as percentage of the fuel prices so that the taxes increase simultaneously with increase in fuel prices? Why can't we have an absolute number say Rs X/litre as a fixed tax / duty amount so that the impact of global crude price is clear to the end user
Sorry for getting technical here, but excise duties are actually on a per litre basis, and is 14.78 INR/litre. It is the VAT (administered by the states) that result in increased revenues for the states with every price rise and result in unequal prices in different states.

https://iocl.com/Products/PriceBuild...ldup_of_MS.pdf

Quote:
- The government is against monopoly (with all kinds of laws to check it) why they have created a monopoly / cartel in fuel market?
This government has deregulated petrol very smartly. They still control the PSUs and hence the prices, yet have distanced themselves from pubic outcry. And to top it all, they allow PSUs to cartel and raise the prices on the same date. The government does not discourage monopoly if it is being benefited (in the name of welfare state)
aroop is offline   Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search


Similar Threads
Thread Thread Starter Forum Replies Last Post
Diesel Cars: Down, down, down! Market share = 34% S2!!! The Indian Car Scene 66 2nd June 2016 16:21
Ford cuts production target at plant in Sanand, Gujarat by 50% LionX The Indian Car Scene 51 26th April 2016 18:26
After Maruti Suzuki, Mahindra announces production cuts JayPrashanth The Indian Car Scene 5 1st August 2013 15:21
Maruti Suzuki cuts diesel engine production at Manesar JayPrashanth The Indian Car Scene 2 11th July 2013 01:04
Maruti cuts CO2 emission by 15% in car manufacturing GTO The Indian Car Scene 4 18th November 2011 08:57


All times are GMT +5.5. The time now is 09:15.

Copyright ©2000 - 2017, Team-BHP.com
Proudly powered by E2E Networks