<div>The fuel battle is getting interesting. With buyers flitting between petrol and diesel variants, the demands of aspirational Indians has given birth to a whole new category called the "affordable special utility vehicle (SUV)". And products like the Renault Duster, Maruti Suzuki Ertiga and Mahindra and Mahindra (M&M) Quanto are catering to this segment. However, while the market is moving in that direction with diesel engines, Honda Cars India and Toyota Kirloskar Motor are looking at the market very differently by focusing more on a 50-50 petrol-diesel strategy.<br /><br />"There is a clear indication that in 15 months we will see a correction in favour of petrol engines," says Kumar Kandaswami, senior director at Deloitte Touche Tohmatsu. "The last 20 months have seen original equipment manufacturers (OEMs) focus on making their vendors move to diesel components and have starved their petrol capacities," he says, adding that only those OEMs who will be able to balance their petrol and diesel portfolios will have good growth in the coming year. <br /><br />According to auto analysts, in the nine-month period, nearly 300,000 cars were unsold — of which 70 per cent were petrol cars. Will Honda and Toyota be able to pull it off?</div><div><img width="600" vspace="7" hspace="7" height="289" align="left" src="/image/image_gallery?uuid=7dc3a81f-845f-469d-b754-7e7dac67bad1&groupId=222852&t=1359817614599" alt="" /></div><div><img width="600" vspace="8" hspace="8" height="343" align="left" src="/image/image_gallery?uuid=9faecaa6-3861-440e-95ae-dade12114b8c&groupId=222852&t=1359817689885" alt="" /><br /><br /><br /><br /><br /> </div><div> </div><div>Honda will localise its diesel engine and push it into the new sedan Brio Amaze. It is said that it is also planning a diesel hatchback under Brio. The firm declined to comment on its product strategy. Honda was the leading auto maker in the C and D segments (mid and large passenger cars) three years ago. When the dieselisation of India took place, it surprised the Japanese auto makers. Honda's market share in the C segment came down from 30 per cent (2010-11) to 14.77 per cent, and from 35 per cent market share to 3 per cent in the D segment. The Brio petrol hatchback has sort of revived its fortunes by capturing a 5 per cent market share in less than one year and beating the likes of Nissan and Skoda that have strong diesel portfolios. The company reportedly plans to revive the Honda City and the Jazz in the petrol segment in the coming year and work on a global multi-purpose vehicle strategy, from its Indonesian plant before coming to India in two years.<br /> <br />For Toyota, though, "the market view is the long run and we will launch no new product till 2015", says Sandeep Singh, deputy MD of marketing at Toyota, which has reclaimed the top spot globally after two years of being number3. But the company hopes to set right things in India where it has taken a forex fluctuation hit importing diesel engines. Also, rising input costs have led to a hike in prices of its marquee brand, the Innova, with stiff competition from M&M and Maruti Suzuki.<br /><br />Toyota has invested nearly Rs 500 crore for a 100,000-capacity petrol plant, which is 90 per cent idle. "Even a Rs 5 increase in diesel price will set the public thinking about moving to petrol cars. But once the vendors are in place to move between diesel and petrol components, OEMs can take a more meaningful approach to managing their inventory," says Kandaswami. Currently, of the 2.3 million cars produced in India this year, 40 per cent of the cars sold were diesel cars, a 50 per cent jump over 2011-12. The Japanese, however, are going to have a better year ahead than what they have had to face over the last 12 months.</div>
