Bar on Big Diesel Car to Hit Auto Sector Hard

Supreme Court banning registration of diesel SUVs and luxury cars above 2,000cc engine capacity in Delhi until March came as the final blow.

Published: 17th December 2015 04:57 AM  |   Last Updated: 17th December 2015 04:57 AM   |  A+A-

CHENNAI: Auto companies’ Christmas party seems to have ended even before it began. If Chennai floods early this month hit production lines hard, the Supreme Court’s decision on Wednesday banning the registration of diesel SUVs and luxury cars above 2,000cc engine capacity in Delhi until March, came as the final blow. Delhi accounts for over 20 per cent of the total luxury car sales and SC’s move will dent  sales.

car.jpgAmong the severely affected will be German luxury car maker Mercedes-Benz and Tata Motors-owned JLR as their entire diesel model range is powered by engines above 2,000 cc. Rival BMW’s 6 out of the 20 models it sells will go off roads, while Audi will have to put on hold sales of two models.

“While we will see some impact on our sales in the three-month period specified in the order, our continued foray into petrol segment, as shown by recent launches, will stand us in good business stead over a period of time,” a Tata Motors spokesperson said.

Sales of homegrown utility vehicles major Mahindra & Mahindra (M&M) will be dented as some of its popular models, including the XUV500, Scorpio, Xylo and Bolero, have engines above 2000 cc. Toyota Kirloskar Motor (TKM) too is likely to see sales sliding with two of its best selling models -- multi-purpose vehicle Innova and SUV Fortuner - falling above 2,000 cc engine.

“So, even if we believe the decision on diesel vehicles isn’t optimal, we’ll honour it and develop vehicles that comply with their stipulation,” Anand Mahindra, Group Chairman, M&M tweeted. Vikram Kirloskar, Vice Chairman, TKM said, “There are various sources of pollution, which can be measured using a scientific source apportionment study. To improve the air quality from vehicle point of view, we must take a comprehensive view of factors causing pollution.”

‘SC Move to Impact Future Investment’

New Delhi: Mercedes-Benz said, SC’s move will impact its future investments in India and will lead to job losses. With all of its models sold in India affected by the ban till March, 2016, it said the “decision is going to adversely affect the auto industry as a whole and will certainly encourage the creation of an unequal ground. This ban on diesel engines also creates an environment of uncertainty and will severely impact our expansion plans and future investments put in place for the Indian market,” Mercedes-Benz India said in a statement.

Collaborative Efforts sought

Bengaluru: Auto firms, concerned over falling sales, have called for collaborative efforts. “We, the CEOs of the global automotive industry, are committed to the vision of decarbonising automotive transport,” said a joint statement that was signed by the heads of almost all the automobile manufacturers in India. They want to promote collaborative technology development and accelerate innovation cycles. They have urged the government to take a broader approach to regulating CO2 from automotives. Currently, the regulatory focus on tailpipe emissions neglects opportunities for CO2 reduction across the system, they lamented. Global standardisation in testing procedures could enable research and development budgets to drive CO2 reduction innovation. 


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