Car maker Honda, which does not have a diesel variant in its fleet, says it is feeling the pressure of rising petrol costs and increasing skew towards diesel cars.
Although the company is working on a diesel engine in Japan, it will not happen in the near future, said a Honda official.
“High diesel subsidies by the Government, even to the rich, is leading to a skew in the market. Dieselation is happening in the market although consumers cannot recover the additional costs of buying a diesel car,” said Mr Jnaneswar Sen, Senior Vice-President – Sales and Marketing, Honda Siel Cars India.
And with contradictory statements by the Government on where petrol costs are headed, “we are under a bit of pressure,” he said.
Diesel engine
The R&D team at Honda, Japan is developing a diesel engine, but it is “too premature to talk of a time-line for launch. The reality is it is not coming soon,” said Mr Sen, on the sidelines of an event to launch Honda's small car – Brio.
With prices starting Rs 4.04 lakh (ex-showroom Chennai), Brio is targeted at the first-time buyer. About 80 per cent of the car has locally sourced parts. Micro chips for electric control units, air bags and engine parts have been imported. “The aim is to reach 90 per cent localisation with the next few months. More engine parts will be localised,” said Mr Sen. However, this may not impact Brio's current prices.