Meanwhile, carmakers are planning to expand their diesel plans in view of hike in petrol prices and interest rate for which sales of petrol cars have fallen steeply.
Sources also revealed that Maruti Suzuki and Hyundai Motors will decide their further strategy after government announcement of duty tax in diesel cars in coming budget session.
According to media reports, Maruti Suzuki is planning to set up three diesel car manufacturing plants in phases at a cost of Rs 18,000 crore. The plans would produce 2,700 vehicles per day. Maruti Suzuki has been talking with govenment to buy two 500-acre tracts of land in Gujarat but is worried that slowing economic growth will crimp demand for cars.
Korean carmaker company Hyundai Motors has also considering Gujarat as one of the location to set up its next plant is also waiting for union budget. Sources in Hyundai said that company is looking at an increase in supply of the diesel variant, especially i20 and Verna.
"We do have a plan for diesel plant. But we are not sure as it will all depend on central government's policies and support for diesel technology," sais a Hyundai official.
Meanwhile, Hyundai is currently manufacturing 6 lakh cars per annum and desperately looking for an expansion in Gujarat.