The Supreme Court of India(SCI) on Tuesday January 05,2016 upheld a temporary ban on the sale of large
diesel cars in New Delhi to combat toxic smog in Delhi, but postponed
hearing an industry appeal on an environmental tax that carmakers say
will hit investment.
Delhi's block on new diesel cars has unsettled the industry, its
salesmen and investors, who warn the ban and uncertainty surrounding it
could derail a tentative recovery in auto sales.
Green groups want to extend the ban to smaller diesel cars and other smog-choked cities in India.
The presiding Supreme Court judge said that the court was considering
expanding the ban to diesel cars with engine capacity of less than 2,000
cc - currently not covered - but would first seek industry input on the
matter.
The Supreme Court had also been expected to rule on Tuesday Jan 05,2016 on a
separate green tax on all diesel cars in the city, but has yet to
announce its decision on that levy.
The decision on the tax, critical for automakers such as Mahindra &
Mahindra, Tata Motors and Toyota Motor Corp that have invested heavily
in making cars for diesel-loving Indian consumers, may now be heard next
week.
Note
Automobile companies with a predominantly diesel engine portfolio, such as utility vehicle maker Mahindra & Mahindra and luxury car manufacturer Mercedes Benz, will be hit by the Supreme Court decision
Mercedes Benz will take the biggest hit as its entire portfolio – from the A Class hatchback to the S Class sedans and the SUVs – will be impacted. Diesel cars account for 80 per cent of its sales and the NCR contributes nearly 22 per cent to its total sales
Mercedes-Benz India said the ban created an environment of uncertainty and would impact its expansion plans and future investments. “We also have to consider the loss of jobs that this will result at the dealerships, at the vendors producing diesel engines and also negatively impacting our own workforce,”
Mahindra & Mahindra said the impact on it due to the SC order would be negligible. Its UV portfolio includes Bolero (2500 cc), Scorpio (2200/2500 cc), XUV500 (2200 cc), Thar (2500 cc) and Xylo (2200/2500 cc). Nearly 98 per cent of its portfolio comes with engine capacities of more than 2,000 cc
Tata Motors, which too has a portfolio of UV, said it would be impacted but its continued foray into petrol would stand the company in good stead over a period of time
Note
Automobile companies with a predominantly diesel engine portfolio, such as utility vehicle maker Mahindra & Mahindra and luxury car manufacturer Mercedes Benz, will be hit by the Supreme Court decision
Mercedes Benz will take the biggest hit as its entire portfolio – from the A Class hatchback to the S Class sedans and the SUVs – will be impacted. Diesel cars account for 80 per cent of its sales and the NCR contributes nearly 22 per cent to its total sales
Mercedes-Benz India said the ban created an environment of uncertainty and would impact its expansion plans and future investments. “We also have to consider the loss of jobs that this will result at the dealerships, at the vendors producing diesel engines and also negatively impacting our own workforce,”
Mahindra & Mahindra said the impact on it due to the SC order would be negligible. Its UV portfolio includes Bolero (2500 cc), Scorpio (2200/2500 cc), XUV500 (2200 cc), Thar (2500 cc) and Xylo (2200/2500 cc). Nearly 98 per cent of its portfolio comes with engine capacities of more than 2,000 cc
Tata Motors, which too has a portfolio of UV, said it would be impacted but its continued foray into petrol would stand the company in good stead over a period of time
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