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Petrol car production loses pace as demand slumps.

20 Jun 2012 Evaluate
With the gradual shift of consumers to diesel models due to huge difference between petrol and diesel prices, several manufacturers are forced to cut down production of petrol models. The automobile industry is reported to have piled up an inventory of more than 300,000 unsold cars of various types at the end of May. This had forced companies to give incentives and discounts to boost the sales of petrol cars. Top companies like Maruti Suzuki, General Motors and Toyota are slashing petrol car output to align themselves to the new market reality.

In the last fiscal, sales of petrol-run cars had fallen by 15%, while diesel variants grew by 35%. Car sales in India grew at the slowest pace in seven months during May with just 2.78% rise, as high interest rates and petrol prices hit the market. The sluggish demand has not only impacted passenger car makers but is also hitting commercial vehicle manufacturers.

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