As a result of the ban on registration of new diesel vehicles with 2-litre engine by the Supreme Court in December 2015, the automobile industry suffered a loss of R4,500 crore in the last eight months, according to Vinod Dasari, managing director of Ashok Leyland and president of Siam.
Since January automobile manufacturers notably, Mahindra and Mahindra (M&M), Totoya Motors and Mercedes Benz could not sell their offerings with big diesel engines in the national capital region which took a toll on the volumes and also reflected their topline.
Dasari, while speaking in the 56th Annual Convention of Automobile component manufacturers (ACMA), said that the automobile industry has faced numerous challenges in the near past but contributed substantially to the manufacturing sector and has managed to grow.
“The automobile industry has suffered a total loss of around R4,500 crores as result of the ban on diesel vehicles. The automobile industry has always adhered to all the rules and will continue to do so in the future,” Dasari said.
Both Toyota and Mercedes suffered huge losses due to the loss of volumes in the NCR region and both the companies held back their planned investments for the Indian market. Mahindra and Mahindra, reduced its engine size to 1.99 litres to make them eligible to be sold in and around the national capital.
Earlier this month, the Supreme court removed the ban on the registration of new diesel vehicles but levied 1% green cess on them. According to a top executive of a car manufacturing company, the current situation is better since the companies are able sell the vehicles with 1% green cess as opposed to blanket ban on the registration.