Diesel SUVs, cars face apex court heat in Delhi

The Supreme Court is likely to ban registration of diesel cars and SUVs in New Delhi with engine capacities of over 2000cc. The order is expected to be delivered on Wednesday.

The worst-hit will include SUV makers like Mahindra & Mahindra and Toyota Kirloskar Motor as well as top luxury brands from the stables of Mercedes-Benz, BMW and Audi. It was only last week that the National Green Tribunal (NGT) had sought a ban of all diesel vehicles in the Capital till January 6. The apex court’s order, targeted at 2000cc plus diesel vehicles, is expected to be a longer ban of three months.

In the process, dealers in Delhi will be saddled with diesel vehicle inventories despatched from plants across the country. The value of these stocks could run into thousands of crores of rupees according to industry estimates, which is now as “good as a dead investment”. Pawan Goenka, Executive Director of M&M, has gone on record recently articulating his objections to the NGT ruling. The inference that diesel is the culprit has raised the hackles of other automakers too, which believe that this is a “minuscule part” of the larger issue of emissions in Delhi.

“In the first place, we are complying with the emission norms prescribed by the Centre. Two, why is it that diesel is everybody’s favourite whipping boy,” asks the marketing chief of a top automaker.

What is equally befuddling is the singling out of vehicles above 2000cc. This has raised concerns about lobbying by a section of the industry against larger diesel vehicles. “As members of SIAM (Society of Indian Automobile Manufacturers), it seems odd that some players are being discriminated against,” adds the marketing official. The industry’s contention is that if diesel contributes to particulate matter, petrol and compressed natural gas are equally culpable since they emit carbon dioxide and nitrogen oxides. “Should vehicles powered by petrol and CNG also be banned as a result?” demanded another industry spokesperson.

Diesel pricing This is not the first time that diesel SUVs and luxury cars have come under the scanner. During the time of the oil price crisis, when crude prices galloped to nearly $150/barrel, environmentalists demanded a cess on ‘large diesel guzzlers’ which were making the most of subsidised fuel.

Today, diesel pricing has been deregulated and the market has been rapidly gravitating towards petrol cars. Despite this, diesel is the fuel of choice for SUVs where the biggest player is M&M. Toyota Kirloskar, likewise, has a successful offering in the form of the Innova which is the favourite of fleet operators.

With the apex court order, the industry would have reason to feel concerned with the constant flip-flops in policy. Some years ago, the biggest issue was coping with the constant tinkering with excise duty specifications. The latest diktat on diesel vehicles is not going to help their cause either.

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