In a major relief for a number of automobile manufacturers, the Supreme Court lifted the ban on registration of new diesel vehicles with a displacement of 2000cc or more. The news comes barely a few days after Mercedes-Benz had filed an affidavit in the Supreme Court against the ban that was in effect for about eight months.
Also read: Defence Minister Manohar Parrikar describes the diesel ban as baseless and illogical
Manufacturers though will have to pay a cess that amounts to 1% of the ex-showroom price of the vehicle. This amount, which will be passed on to the customers, would have to be deposited in a different account of a public sector bank. This account will be opened by the Central Pollution Control Board. The ruling will be a huge relief to manufacturers such as Mercedes-Benz and Toyota Kirloskar Motors that bore the brunt of the ban as their sales in the NCR region took a big hit.
A number of automobile manufacturers expressed their opinions on the diesel ban. Mahindra and Mahindra were quoted saying that they were very relieved with the decision of the Honourable Supreme Court today. They hope this decision will put all controversy surrounding diesel fuel behind and they would now be able to focus on the more important task of making our vehicles compliant with BS 6 norms by April 2020”
Mercedes Benz India issued a statement that said, “We have followed the earlier direction of the Supreme Court and filed an Interim Application seeking relief on the ban on our cars. Following the court suggestion, we as a voluntary interim measure, offered to pay 1% 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. We reiterate that, being the pioneers of numerous technological innovations, Mercedes-Benz has the technology available and can switch our entire fleet to BS VI by 2018, however, we need compatible fuel to do so, to provide our customers with the latest technologies which are available worldwide. We welcome the government’s decision to pre-pone mandatory BS VI to 2020. We think the introduction of BS VI fuel is the best viable option to curb pollution. Mercedes-Benz India is waiting for compatible fuel quality and as soon as the required diesel fuel is made available we are ready to switch our portfolio quickly to the EU 6 standard.”
Joe King, Head, Audi India said that they welcome the decision of honourable Supreme Court. He added “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. Short-term decisions lead to increased uncertainty for the future. It creates a lot of confusion for the market in general. What they really need is a long term roadmap. They need clarity on policy direction and time to amend their strategy in line with the customer demand. It is however pleasing to see this welcome step and he hopes that this will lead to some stability for business in the Delhi NCR.”
According to Subrata Ray, Sr. Group VP, Corporate Sector Ratings, “As per ICRA’s estimates, ~30% of Utility Vehicle (UV) segment in India had come under the ban. In addition, almost 50-60% of the Luxury Car market in India (i.e. 35,000 units p.a.) was also adversely impacted because of the ban. In lieu of uplifting the ban, the SC has offered the OEMs to pay 1% cess, which will be passed on to the customers and is unlikely to adversely impact demand in ICRA’s view.”