NEW DELHI: The auto industry has hoisted a red flag over the rise in fuel prices, stating that expensive gasoline and diesel will affect demand for cars and two-wheelers, while leading to strong inflationary trends as freight costs rise.
The concern comes at a time when the industry is grappling with uncertainties surrounding the coronavirus pandemic and the possibility of a third wave.
Kenichi Ayukawa, the CEO of Maruti Suzuki, who is also the president of the Siam industry association, said sales of cars and two-wheelers will hit when gasoline retail prices exceed 100 rupees in many parts of the country and diesel will rise above 90 rupees.
“Unfortunately, as fuel prices rise, we will have a negative impact on our industry … In the past, demand slowed when fuel prices rose. We have to be careful with this phenomenon and watch the market trend, ”Ayukawa said.
He said the upward trend in fuel costs could discourage people from using vehicles frequently. “We have to watch the market demand closely because automatically (as fuel prices rise) people will be reluctant to use vehicles. This is very important to us. ”