Delhi diesel ban reflects unstable policy regime: SIAM

Coming out strongly against the Supreme Court’s decision to ban registration of large diesel vehicles in Delhi, automotive industry body Society of Indian Automobile Manufacturers (SIAM) today said that the move would render India’s policy regime erratic and discourage automakers from investing in the country.

“It also gives an impression that there is no stability or predictability in the policy regime, which will deeply dent the country’s global image as an investment destination”, SIAM said in a statement, adding that many carmakers have halted further investments until clarity on the matter is achieved.

Carmakers have been forced to reorganise their strategies in the wake of the ban on sale of diesel cars and SUVs with engines over 2,000cc in Delhi-NCR. The ban was first imposed in mid-December till March 31, 2016 and then extended until next hearing, even as some of them trudge on a revival path.

SIAM also said that the ban on sale of large diesel vehicles will vilify diesel technology and compliant vehicles can never be considered as “polluting” unless there is a violation of the notified emission norms.

Automakers have called for rational decisions to be taken and a uniform approach in the implementation of government policy, even as some of them look at ways to evade the ban by resizing their 2.0-litre engines. Mahindra & Mahindra announced sub 2.0-litre variants of its popular SUVs such as the Scorpio and the XUV500 and Tata Motors, too is looking at a similar approach for its vehicles. However, others such as Mercedes-Benz India and Jaguar Land Rover have been hit hard by the ruling.

“The task before government now is to arrive at a unified stand on major policy issues like the diesel case and clarify the policy to the courts,” the automotive body said in the statement.

Interestingly, the ban has resulted in a shift in consumer preference to petrol cars. Data revealed by SIAM showed that the share of diesel among the total sales of passenger vehicles during 2015-16 declined to 48 percent from 52 percent in the previous year, while that of petrol increased to 52 percent from 47 percent.