Mercedes Benz will take the biggest setback amongst luxury car makers in the country following the Supreme Court order that on Wednesday imposed a temporary ban on sale of diesel luxury cars with engine capacity more than 2000 cc in Delhi and its surroundings.

This is as its entire portfolio – from the A-Class hatchback to the S-Class sedans, as well as its entire range of SUVs will be impacted by the ban. Diesel cars account for around 80% of Merc’s sales in India, and the NCR contributes nearly 22% of its national sales.

Its competitors like BMW and Audi however will be less impacted as only some vehicles from its total portfolio fall into the defined category. The three German car makers are the main contenders in the Indian luxury car space. Mercedes had become the clear leader in India in this segment with sales of over 10,000 units in the 9-month period ending September 30, 2015. The order will give a clear breather to Audi and BMW.

According to Bharat Gianani, senior research analyst at Angel Broking, the news is likely to have negative impact on M&M as about 95% of its passenger vehicle portfolio is above the 2,000 cc range, but would not affect Maruti Suzuki which hardly has any product above the 2,000 cc segment, or Tata Motors as its earnings are driven largely by JLR which is a global player.

Delhi contributes about 7% of the overall passenger vehicle sales and the contribution of diesel vehicles is about 2-3% of the overall industry volumes which would further limit the impact of the ban, he added.

Related Topics
comment COMMENT NOW