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Leading car makers shifting gears to counter diesel ban

Greater Noida, Feb 6

Even though the ban on the registration of diesel vehicles in the national capital potentially affects several leading automobile manufacturers, they are coming out with alternatives and getting ready to counter the prohibition, stakeholders said.

To curb the increasing levels of air pollution in New Delhi, the Supreme Court on December 16 forbade diesel automobiles with above 2,000cc engines from being registered till March 31, 2016.

The ban has somewhat affected the sales of sports utility vehicles (SUVs) and multi-utility vehicles (MUV), but manufacturers are preparing themselves in case the duration of prohibition is extended in the national capital or extends to other Indian cities as well.

"Very clearly, it has impacted us in the first quarter -- particularly Innova and Fortuner. The National Capital Region (NCR) accounts for 8-10 percent of our volume, but for dealers, the profitability is 50-60 percent," N. Raja, Toyota Kirloskar Motor director for sales, told IANS.

The Land Cruiser is another vehicle Toyota sells in India, which is also above the 2000cc but the SUV does not account for majority of its sales.

"Frankly our preparedness is towards getting petrol options as Plan B," said Raja. "We have engine options available, but it will not catch up with the launch dates, currently planned around mid-year. It will take further time."

Another option, he said, would be to bring down engine displacement the below 2,000 cc.

Outr of some 3 million domestic sales of passengers cars in India annually, analysts pointed out that some 7 percent is accounted for by the national capital -- which makes it a market of 210,000 units.

Out of that, diesel vehicles account for 25 percent, or a market of 52,500 units. That is 1.75 percent of passenger vehicles sold in India are accounted for by the diesel versions in Delhi region. While this, in itself, may seem small, the anxiety is over the future course of action.

Yet, at the ongoing Auto Expo here, the SUVs and Muvs segment had a fair share of new launches. Like the new Innova Crysta, which is set to hit the showrooms by mid-2016.

What about the the new entrant in the Indian market, the iconic American SUV maker Jeep vis-a-vis the court order? A senior official of Fiat Chrysler Automobiles, which owns Jeep, told IANS that the Italian-American company has enough ability to overcome such issues.

"We are looking at petrol engines for our Jeep in India. Jeep has got enough capacity to take care of these legislations -- in the sense that vehicles which can be brought in at a short notice. We've already responded by looking at a 3.6-litre petrol engine," said the source.

Jeep unveiled three SUVs here, including the Wrangler, and is looking at cars later this year.

"Whether it (the ban) is in Delhi, or implemented in other cities, we are ready for it. We have not started selling vehicles in the first place but whenever we do and the legislation is there, we are ready to do what it takes," added the source.

Embroiled in a global emission scandal, German automaker Volkswagen gave a similar response.

"It is not something I would like to comment on simply because it isn't my primary domain. But I'll say this: As a group when you look at the depth we have in terms of technology, different choices of power and so on, it is probably one of the best range of options than anybody can have," Volkswagen Motorsport India head Sirish Vissa told IANS.

"So whatever happens, I am sure that we have got enough depth and options we will find that will work."

(Sandip Sikdar can be contacted at [email protected])