Diesel Vehicle Ban: Luxury Auto Firms Hit, Small Car Makers Get Reprieve

BENGALURU: The latest order passed by the Supreme Court banning registration of diesel vehicles with engine capacity of 2000 cc and above left a huge impact on luxury carmakers Mercedes Benz, BMW, Audi, JLR, Volvo, Mahindra & Mahindra and so on. The order will to act from January 1 till March 31, 2016 in the National Capital Region (NCR), reports The Economic Times.

Delhi is the largest market accounting for seven percent of all passenger vehicles sold in the country. It is the largest market for luxury car makers such as Mercedes, Audi and BMW making up for as much as 18 percent of 38,000 luxury cars projected to be sold in the country by the end of this year. NCR alone contributes 11 percent to sales of passenger vehicles registered in the country. For a day 1,400 diesel vehicles gets registered and 30 pct of these being strapped with engines of 2000 cc and above.

One of the Industry person believes that banning registration may give some relief to auto makers with small diesel vehicles. However, this order will impact those selling larger diesel sedans and sports utility vehicles. Right now diesel vehicles inventory of around 12000 units valued at over Rs 1000 crore is stranded at dealerships across Delhi. The SC order may now give some time to these dealers to clear piled-up inventory.

The Supreme Court's interim order is positive for the environment in that it wants to assess the impact of larger diesel vehicles on pollution levels in the NCR. But there has to be more clarity on automotive policy at the central level. Nearly 40-50 per cent of trucks which pass through Delhi-NCR even today are BS II, BS III variants. And the pollution issue is not restricted to Delhi alone, there are 10 odd cities which are also severely affected. There has to national roll-out of emission norms. Emission norms cannot be restricted to a handful of cities if you want to effectively clean up the environment.
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