Food for Thought!!!

This was when the price for petrol was hiked by as much as Rs.5/litre.

Just a thought which has been lingering in my mind for the last couple of days. We have had quite a few car launches, (considering the small Indian market in the specific automotive industry in question) in the past couple of years and a few lined up for the next couple, in the Diesel Automotive industry. In the same period we have seen spiraling prices for the Petrol fuel. Can the both be related?

Pretty obviously yes. One way of thinking would be that as petrol prices go up, petrol cars become more difficult to afford esp for the Middle Income Group and companies seeing this are now launching new cars which run on the cheaper Diesel fuel and in the small car industry, hence solving the fuel cost problem for MIG group and making profit in the process.

I am thinking a little differently. Is the rise in price really the cause for more Diesel cars being manufactured or are the cause and effect a little opposite here? In the manufacturing industry (now I may be wrong here but am certain to a larger extent), the decisions about launching a product in a new market (in this case Indian small automotive market),takes years of planning, strategizing and other plethora of activities before a decision is reached. This when then applied to the current market and the cars being launched, would mean that planning for same should have been in process well before the Petrol prices actually went up. Now thinking from a manufacturer's perspective, I have a huge market in India with the huge population growing day by day and more people joining the MIG group and looking out for better automotives to suit their needs and also be cost effective. Just in order to make an entry into the market, it would be ideal if this large group of customers has nothing else to look into but my product, my Diesel car. Best way to achieve this, if somehow the industry prices for the other fuel (petrol) go up.

Now from an average citizen's perspective, we can imagine how much profit this manufacturer is looking into given the huge potential market.

Food for thought now- Is it not a possible scenario and very probable at that, that at some higher level of planning, using the industry contacts and other ways we know of how things can be made to work for you in the market, a huge manufacturer ready to spend a lot knowing that he can make much more in profits can convince the higher level of mgmt and affect the prices of a fuel which internationally is getting more expensive (hence, no direct bearing as it is for policy makers?)? Why otherwise would I be launching a new product in a market already struggling and with the world economy already facing a downturn?

Doesn't this look like a very ripe scenario for another scam already made or in the making? Can we have an inquiry done into this not after but before a scandal actually has taken place?

Just the thoughts which came to my mind and where I would want to know how others amongst us think.