The Hindu : MUL may take a relook at diesel option

Online edition of India's National Newspaper
Thursday, Oct 10, 2002

Business

Business

MUL may take a relook at diesel option

NEW DELHI OCT. 9. With the promised complete dismantling of the administered price mechanism (APM) not happening as yet and the consequent continuance of gap between the petrol and diesel prices, MUL ``is contemplating revisiting the diesel option''.

A broad hint to this effect was indicated by the Managing Director, Jagdish Khattar. He, however, did not elaborate the gameplan.

MUL is selling diesel version of Zen through imported engines. Recently, it introduced the diesel version of Esteem for the Southern market which has tended to show a preference for diesel vehicles. The reasons are not far to seek with the diesel pinching less of the customers' pocket than petrol which is made to cross-subsidise kerosene and LPG. As a result of customers', especially those in the South, preference to diesel vehicles, MUL is apparently losing out to competitors. MUL is now reviewing its diesel option. Since the parent SMC has no diesel engine technology, MUL may look for a tie-up with Peugeot from whom it is getting the diesel engine at the moment for Zen. Officials at MUL indicated during a presentation to the visiting journalists that if petrol prices did not come down, ``the company may have to revisit the diesel option' and set up a facility to make diesel engines.

KTJ

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