Millennium Post

Auto firms hail Supreme Court’s lifting of diesel car and SUV ban

Automobile industry on Friday welcomed the Supreme Court decision to lift ban on cars and SUVs with diesel engine capacity of 2,000 cc and above in the Delhi-NCR region. The industry also said that efforts must be made to address the real cause of pollution instead of targetting a particular type of fuel.

Toyota and Mercedes-Benz, which had offered to pay 1 per cent green cess, insisted they made the voluntary offer in order to overcome the ban and “not on the premise that our vehicles are polluting the environment”. The Japanese auto maker insisted that its stand to hold back investments in India will continue till it gets a clarity on the future road map both from a court’s stand point and government’s policy side.

“Our vehicles meet every norms laid out in the country. We made the offer of 1 per cent green cess under duress. While we welcome the Supreme Court decision, we wish if only the Court did this earlier,” Toyota Kirloskar Motor Vice-Chairman and Whole-time Director Shekar Viswanathan said. He further said the diesel fuel has been maligned and wondered if it has damaged the environment so much that it had to be banned. When asked if Toyota would now reconsider its decision to hold back investments in India, Viswanathan said: “We will still wait for the final pronouncement. We will wait for a clear statement from the court and government on the road ahead for diesel fuel.” 

Echoing the view, Mercedes-Benz India said it had followed the earlier direction of the Supreme Court and filed an Interim Application seeking relief on the ban on its cars. “Following the court suggestion, we as a voluntary interim measure, offered to pay 1 per cent of the ex-showroom price of the vehicle towards anticipated Environment Compensation Charge as a deposit, and not on the premise that our vehicles are polluting the environment,” the company said in a statement. Mercedes-Benz had also said it was putting on hold its future investments in India in the wake of the ban on big diesel cars and SUVs.

Welcoming the apex court’s decision, Mahindra & Mahindra Executive Director Pawan Goenka, said: “We are very relieved with the decision of the Honourable Supreme Court today. Hope this decision will put all controversy surrounding diesel fuel behind us and we will be able to focus on the more important task of making our vehicles compliant with BS 6 norms by April 2020.” Maruti Suzuki Chairman R C Bhargava termed the decision as one “which the entire industry was waiting for a long time”. “It’s a welcome decision. It will end the suffering of companies who had been hurt the most by the decision. Besides, the anti-diesel sentiment will come to a stop now,” he added.

When asked about the possibility of green cess on diesel cars with engine capacity less than 2,000 cc, Bhargava said: “Nobody can forecast the decision of the Supreme Court, but the government has come out against this system of cess. There needs to be discussion on the subject, involving all relevant subjects.” Hyundai Motor India Senior Vice-President Sales & Marketing Rakesh Srivastava said: “It is a positive step and will address the challenge being faced by customers and various stakeholders.” He said a structured long road map for technology introduction supported by positive tax regime is required to boost investment climate. SIAM Director General Vishnu Mathur said the Supreme Court’s decision will bring certain amount of relief for those companies whose vehicles were affected by the ban. “However, they will be at a comparative disadvantage due to the one per cent green cess. The main concern of the automobile industry is that this issue will crop up again in October-November with the onset of winter when pollution increases,” he said. He further said: “We need to look at the long term and find the real cause of pollution to address the issue. We stand by our view that cars are only a minor contributor to the overall pollution.” 

The cars and SUVs, which were banned in the last eight months account for “less than 0.5 per cent of pollution” in the Delhi-NCR region, he said, adding a scientific approach is need to solve the issue. Price Waterhouse Partner Abdul Majeed said: “We need to figure out holistic solutions in automotive sector by replacing old vehicles on the road. Promoting environment friendly vehicles as well as significantly improving public transport are some of the areas which requires immediate attention. In addition, we need to move to higher and more uniform emission standards across the country.” 

Audi India Head Joe King said it is pleasing to get clarity, particularly for the customers. “The lack of clarity has already had a severe negative impact with the worst affected being people working at dealerships. There have already been job losses due to the impact this ban has had on business in the Delhi NCR,” he added. 

Auto scrips zoom by as much as 3%  
Auto stocks on Friday gained up to 3 per cent after the Supreme Court lifted its embargo on registration of high-end diesel cars and SUVs having engine capacity of 2000cc and above in Delhi and NCR. Shares of Tata Motors rose by 2.58 per cent, while Mahindra & Mahindra gained 2.12 per cent and Maruti Suzuki India went up by 0.28 per cent on BSE. The BSE auto index also gained 1.07 per cent to end at 21,404.80. 
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