Auto Cos Plan Collective Action to Counter Curbs on Diesel Cars
Top execs of major firms held a meeting in Mumbai on Friday to chart out future course
Ketan Thakkar & Sharmistha Mukherjee
Mumbai | New Delhi: Rivals in the auto industry are considering collective measures to deal with the extended ban on large diesel vehicles in Delhi and its satellite cities. This was one of the topics of discussion when industry CEOs got together in a huddle in Mumbai on Friday, the second in recent days, to chart out a path to overcome the curbs on diesel and explain their case more effectively, both in the court and outside.
Top executives of Maruti Suzuki, Hyundai Motor, Mahindra & Mahindra, Ford, Toyota, Nissan, Isuzu and other car and utility vehicle makers met at Mahindra’s plant in Mumbai’s Kandivali suburb, on a day when the industry association cut its forecast on passenger vehicle sales for the new fiscal year blaming policy uncertainties. The previous meeting was in the natio- nal capital a couple of days ago.
A joint approach, instead of the companies independently arguing the case in the Supreme Court, was on top of the seven to eight proposals discussed, one of three people ET spoke to said. Separate lawyers currently argue the case for companies such as Mahindra, Maruti, Toyota and Mercedes-Benz in the Supreme Court, which imposed the ban as a measure to reduce air pollution the capital city.
TAKING A HIT
“Another proposal was to create a small group of top executives from carmakers, who will explain the pros and cons of diesel as a fuel taking learning from their global experience, to the lawyers who in turn will be able to present the case more effectively, when the court reconvenes to hear the case," said the person requesting anonymity.
Since the directive of the Supreme Court is towards the government, there was also a thought that some eminent CEOs individually meet the government and explain the entire case. The Supreme Court is expected to hear auto industry's arguments on April 30. The court had said on March 31 that it would hold a special hearing on a Saturday to decide whether the ban on registration of diesel vehicles with two-litre and larger engines in the National Capital Region be lifted and whether an environment compensation charge be levied.
In what could be a possible impact of the ban on diesel vehicles in the NCR on buyer sentiment, sale of diesel vehicles across the country has taken a hit since the end of 2015 — volume fell 7-8% in January-February. The NCR accounts for 1213% of the country's total passenger vehicle sales. For luxury car makers, it is almost 20-25%.
The likes of Mahindra, Tata Motors and Toyota have started working on petrol versions of their diesel-run vehicles to overcome the curbs. Luxury carmakers have diverted a larger share of petrol-powered vehicles to the NCR market.