SC bans new 2-litre diesels in NCR

By: |
New Delhi | Published: December 17, 2015 1:42:47 AM

No registrations till Mar 31; bars entry of 10 years or older CVs; doubles green cess

auto industryOnly taxis running on CNG, including that of cab aggregators like Ola and Uber, will be allowed to ply in Delhi and the NCR, for which they have been given time till March 31. (Reuters)

In line with what it had indicated a day earlier, the Supreme Court on Wednesday banned the registration of diesel vehicles of more than 2,000 cc in Delhi and the national capital region till March 31 in its effort to check air pollution. The apex court also hiked the green cess, or the environment compensation charge, by 100% on trucks entering Delhi, while banning ones that are more than 10 years old. Among the other measures ordered by the SC are that only those commercial vehicles will be allowed to enter Delhi after paying the green cess that have the city as the end destination; those that are not Delhi-bound will not be allowed to cross through the city.

Further, only taxis running on CNG, including that of cab aggregators like Ola and Uber, will be allowed to ply in Delhi and the NCR, for which they have been given time till March 31. The ECC on commercial vehicles has been doubled to Rs 1,400 for light commercial vehicles and Rs 2,600 for larger trucks.

While ruling on these lines, the SC maintained that the order will not impact the common man since diesel vehicles of more than 2,000 cc engine are owned by the affluent section of the society.

The ruling hits hard the country’s largest utility manufacturer, Mahindra and Mahindra, which has several such products in its portfolio like the Bolero, Scorpio, Xylo and XUV500. Others to be hit will be General Motors’ Tavera, Toyota Kirloskar’s Innova and Fortuner, Tata Motors’ Safari and Jaguar-Land Rover brands, and Hyundai’s Santa Fe. Some cars will also get affected like Skoda’s Superb and Toyota’s Camry, along with most models of luxury cars like Mercedes, Audi and BMW.

The hardest hit will be M&M, which in a statement said that the affected products represent around 2% of its total monthly sales in the city. “The company would hope that at the end of the interim period of March 31, 2016, the judiciary and the regulators would look at the impact of these measures and take a holistic view on improving the air quality of Delhi, taking into account the overall impact of each action… The company is in the process of evaluating various options to work within the framework provided by the honourable Supreme Court,” M&M said in a statement.

The company’s chairman, Anand Mahindra, tweeted, “So, even if we believe the decision on diesel vehicles isn’t optimal, we’ll honour it and develop vehicles that comply with their stipulations.”

Unlike several of its competitors, M&M does not have petrol technology.


Even the Tata Motors-owned JLR’s entire diesel model range is powered by engines above 2,000 cc. Commenting on the matter, a Tata Motors spokesperson said, “While we will see some impact on our sales in the three-month period specified in the order, our continued foray into petrol segment, as shown by recent launches, will stand us in good business stead over a period of time.”

Auto industry body Society of Indian Automobile Manufacturers (SIAM) was also critical of the order stating that the move will not lead to any perceptible improvement in the city’s air quality.

“The pollution issue in Delhi needs to be looked at holistically if the objective of improving the air quality is to be achieved. In light of this, the Supreme Court order banning private diesel passenger vehicles and SUVs of 2,000 cc engine capacity and above, is most unfortunate,” SIAM said in a statement.

However, the country’s largest car manufacturer, Maruti Suzuki, will be totally unaffected by the interim ban since it does not make diesel vehicles in the 2,000 cc and above category. In fact, if there is a move towards CNG variants, Maruti will be a beneficiary. The other benefit that comes to Maruti and other players who deal only in smaller diesel vehicle is that the National Green Tribunal’s recent order banning sale of diesel cars till January 6 stands modified with the SC’s order. As such, dealers of such vehicles can sell their year-end stock.

Of the total passenger vehicle sales in the country at around 2.6 million, Delhi’s share is 7%, with about 30% comprising diesel-run vehicles. Of this, the share of diesel-run vehicles with an engine capacity of 2,000 cc and above is in low single digits.

Do you know What is Wholesale Price Index (WPI), Public Debt, Finance Commission Grants & Other Transfers, Economic Survey, State Finance Commission? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.