NEW DELHI: The auto industry has raised a red flag over the spike in fuel prices and said that expensive petrol and diesel will hit demand for cars and two-wheelers, while leading to strong inflationary trends as freight costs go up.
The concern comes at a time when the industry grapples with uncertainties around the coronavirus pandemic, and possibility of a third wave.
Kenichi Ayukawa, the CEO of Maruti Suzuki who is also the president of industry body Siam, said that with petrol retail prices staying over Rs 100 in many parts of the country and diesel upwards of Rs 90, the sales of cars and two-wheelers will be hit.
“Unfortunately, with the fuel prices going up, we will be getting a negative impact on our industry… Historically, whenever there is a rise in fuel prices, there has been a slowdown in demand. We have to be cautious of this phenomenon, and monitor the market trend,” Ayukawa said.
He said that the upward trend in fuel costs may dissuade people from using vehicles frequently. “We have to carefully watch the demand in the market because automatically, (with the) fuel prices going up, people will hesitate to use vehicles. That is a big concern for us.”
