Auto industry suffers heavy losses due to Diesel ban, nearly INR 4,000 crore lost

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Aimed at protecting the environment, the diesel ban has cost the automotive industry dearly. The industry has suffered losses of upto INR 4,000 crore in the period between December 2015 to August 2016. The eight-month long ban had affected the sales of diesel vehicles with displacement over 2000cc. SUV and luxury car manufacturers were the worst hit and while some introduced lower displacement models of their vehicles, others offered petrol variants to keep the sales ticking.

Speaking at the 58th Annual Session of the Automotive Component Manufacturers Association (ACMA), SIAM President Vinod Dasari said, “Led by the media hype, provided with improper information, the courts decided to ban those vehicles which actually meet the standards set by the government. It is for the first time that when you meet the law you actually get penalised. The auto industry has lost Rs 4,000 crore in the last eight months.”

Diesel ban banned

Manufacturers will have to pay a cess amounting to 1% of the ex-showroom price of the vehicle. This cess will be passed on to the customers and will be deposited in a public sector bank. This account will be opened by the Central Pollution Control Board.

Desari added, “After all of this what happened. There is environmental cess, for vehicles that are larger than 2,000 cc, of 1 per cent. People who buy such vehicles… are they going to stop buying these due to this one per cent cess? Is that going to have an impact on Delhi pollution?”

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The Supreme Court had issued a ban on the sale and registration of all diesel powered passenger vehicles with engine capacities exceeding 2000 cc in the Delhi-NCR region in December 2015. The National Green Tribunal even planned to extend the ban to 11 more cities such as Mumbai, Hyderabad, Chennai, Kolkata and Bengaluru.

With inputs from PTI

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