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Demand for fuel-efficient cars to rise
Published on 27 Jun. 2010 12:25 AM IST
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The fuel price hike could slow demand for automobiles in the country in the short term. But in the long term, there could be a greater shift towards smaller and more fuel-efficient vehicles, as is happening in the West now, according to industry experts and analysts.
According to Business Standard report, at present, small and compact cars constitute over 61% of the total monthly sales of passenger vehicles in India. It is expected that this could go up to 70% over the next two years as fuel prices go up further.
“High fuel prices would have a negative impact on sales in the short term, wherein demand is expected to drop by as much as 5-10 per cent over the next month or two. If prices continue to soar, achieving the 17% estimated growth rate for the automobile sector in 2010-11could become a challenge,” GM India Vice-President P Balendran said.

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