New Delhi: The consequences of the Central government’s state of ‘policy paralysis’ has become a bottleneck for foreign car makers who are willing to establish diesel plants in the country.

Considering rise in demand for diesel cars in domestic market, major automobile makers like Maruti, Hyundai and Toyata are keen enough to invest in diesel car production.

However, the fear of incurring heavy loss looms large over them as the government has not yet taken any strong stand on taxes to be levied on automobile companies.

In an exclusive talk with Dainik Jagran, Managing Executive Officer (Sales and Marketing) of Maruti Suzuki, Mayank Parikh said, “Launching any new diesel auto in the market requires hefty expenditure of more than Rs 1000 crores. None of the companies would take this risk of investing at a time when the government is not giving any clear statement on diesel car manufacturing.”

Japan based Toyota which launched hatchback cars in the market last year said, the company is interested in setting diesel engine plant but the final decision will be only taken after the budget session.
According to General Manager, Toyota Kiroloskar Motor India, Shekhar Vishwanathan, “It is important to keep an eye on the Central government’s decision over subsidy on diesel.”

Owing to the unclear approach of the Centre in this regard, Hyundai has not yet prepared any strategy related to diesel engine plants. According to one of the senior officials of the company, the government needs to clear its view on diesel prices. If in case the government is planning to implement dual pricing, then also they should inform on this and declare its decision.

It needs to be mentioned that Kirit Parikh committee formed by the Central government recommended implementation of dual pricing. Since the government gives heavy subsidy on diesel, the suggestions were not taken into consideration.