Toyota Kirloskar Motor and Mercedes-Benz India will now be gearing up for a return to Delhi’s diesel market which was out of bounds since last December. This was the time the Supreme Court levied a ban on 2,000cc plus diesel vehicles since they were believed to be polluting the already foul air in the Capital.
The decision took a big toll on these two carmakers whose bread and butter is this product segment. In the case of Mercedes, the loss in terms of market share was greater since Delhi and the National Capital region accounts for over 20 per cent of its business.
Toyota’s is comparatively lower at seven per cent but this was hardly of any comfort especially when its new Innova Crysta launched a couple of months ago was kept out of Delhi. Mahindra & Mahindra got around the problem by readying sub 2-litre diesel engines.
Over the last eight months, both Toyota and Mercedes have made known that this decision could impact investments in India since their respective headquarters in Tokyo and Stuttgart would not take too kindly to ad hoc policy decisions. Now with the ban lifted, albeit with a one per cent environment cess levy, it remains to be seen if sentiments will be back on track quickly.
The long wait has created tremendous problems in the supply ecosystem of both companies with dealers losing employees who could not afford to wait forever.
Suppliers were also hard-pressed since order books for diesel cars took a nosedive with the Delhi impasse. Putting the house in order all over again will take time even though the ban is now lifted.
In the meantime, petrol is making a strong comeback across India as its price differential with diesel is rapidly narrowing down. In addition, customers would perhaps be more comfortable with petrol in the aftermath of the diesel scare in Delhi. Automakers will now need to prepare themselves for a new set of challenges.
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