Fate of diesel vehicles becomes more uncertain in India
The National Green Tribunal asked the Kerala government last week ‘not to register any diesel vehicle with the capacity of 2,000 cc and above except public transport and local authority vehicle.’
After Delhi, Kerala becomes the second state to face a temporary ban on the registration of diesel vehicles which have an engine capacity of 2,000 cc and above in six of its major towns. Such a blanket ban has scared some auto makers to the extent of realigning their production lines and possibly abandoning the idea of manufacturing diesel vehicles at least till they find a more clear policy on auto fuels and its emission norms. Auto industry fears more such bans in other states as well. The National Green Tribunal (NGT) last week asked the Kerala government “Not to register any diesel vehicle with the capacity of 2,000 cc and above except public transport and local Authority vehicle.” The NGT’s order further directs the state government not to permit any diesel vehicle, whether light or heavy, which are ten years old, from plying on the roads of six major cities of Kerala. An environmental compensation of Rs 5,000 would be excused from the deviants. The later part of the order is already up for challenge in Kerala high court.
“Such knee-jerk reactions about the fate of diesel vehicles owe its genesis to the lack of clear policy on auto fuels,” says S.P. Sharma, chief economist, PHD Chamber of Commerce & Industry.
India needs to have a ten years policy on mandated fuels so as to give a clearer vision to the auto makers to plan their investments accordingly. Sharma feels that the lack of clarity would dampen the investment climate in the country which is battling hard to prop up its economic growth.
Some auto makers like Tata’s and Mahindra are ready with their sub-2,000 cc engines to fire their luxury utility vehicles. But others need time to adjust.
A similar (Supreme Court mandated) ban already enforced in Delhi is not likely to be lifted unless there is a commitment to pay an environmental cess being computed under the supervision of the apex court.
Luxury car makers like Toyota and Mercedes are already battling with drastic fall in sales of such vehicles in Delhi and its adjoining National Capital Region. NCR is considered to be a promising market for diesel powered luxury passenger vehicles.
Auto mavens feel that diesel has become the sole victim of the drive to reduce vehicles causing environmental pollution which would impact the sales of diesel powered vehicles in the future.
They feel that until India adopts the Euro 6 emission norms, the sale of diesel vehicles might continue to register a steep decline.