Mahindra Crippled in Delhi as Diesel Ban Piles up Cars worth Rs. 1,000 Crore

Recent measures taken by the Delhi Governing bodies to curb pollution have taken a toll on the automotive market. Although all automakers are suffering, Mahindra is one of biggest losers in this entire scenario as most of their models do not have a non-diesel variant. Reports say that diesel cars worth almost Rs. 1000 crore are stuck with dealers as the National Green Tribunal's ban on diesel cars continue. Other than Mahindra, companies like Tata Motors, Toyota, Ford, Nissan and even brands like Audi, BMW and Mercedes-Benz are having a hard time as the National Capital contributes up to 7 percent of the total the automotive sales of the country along with being one of the biggest markets for luxury brands.

Delhi currently implies BS(Bharat Stage)-IV emission norms and the implementation dates of BS-V & VI have been preponed under the Auto Fuel Policy. Customers who have booked their cars are confused as they have already made the purchase and are awaiting deliveries while those who had have an option, have shifted to a petrol variant. Customers are also trying to get their cars registered from NCR region as they still do not have the same policy yet. Mahindra’s India lineup consists of Bolero, Quanto, Thar, TUV300, Scorpio, Verito, Verito Vibe, XUV500, Xylo and e20, out of which only e2o is capable of running on ‘fuel’ other than diesel.

Approximately 36 percent of cars sold in Delhi are powered by diesel engines whereas 90 percent of SUVs and utility vehicles run on diesel. This ban comes at a time when customers are most likely to buy a car before the price hike is applied from 2016. This move not only cripples the auto industry but also hampers with the customers who are waiting for deliveries. Adding this to the Odd-Even Formula, it seems like the automotive industry is the biggest target of the government in this scenario.

Pawan Goenka, director of Mahindra & Mahindra said, "We do not know why diesel is made to look like a culprit even though the vehicles are meeting stipulated government norm.," Mr. Goenka added, "When a product is meeting all the laws of the land, how can there be a ban? There was no consultation with representatives of the auto industry before this kind of a move. We do not know what to do with the cars parked at dealerships and hope there is a clarification on this very soon,"

Adding to the concerns, Vishnu Mathur, director general of the Society of Indian Automobile Manufacturers (Siam) said, “Auto industry is the soft target. In the past several years whatever courts have asked us to do, we have done that. There won’t be any visible results if we don’t come up with a holistic plan.”

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