Supreme Court extends ban on diesel vehicles above 2,000cc

Automakers such as Tata Motors, Toyota Kirloskar Motors and Mercedes-Benz India failed to get any respite from the ongoing ban on registration of passenger vehicles having engine capacities of above 2,000cc in the key Delhi-NCR region as the Supreme Court extended the ban on such vehicles until the next ruling on May 9, 2016.

In a bid to tackle the rising levels of pollution in Delhi-NCR, the Supreme Court had imposed a ban on the sale of diesel cars and SUVs with engine capacities over 2,000cc in the region, starting mid-December until its expiry on March 31, 2016. However, on March 31, the apex court extended this ban on diesel passenger vehicles until the next hearing, which took place on Saturday, April 30, 2016.

The indefinite ban on sale of large cars has put many automakers in a state of disarray with the automotive body Society of Indian Automobile Manufacturers (SIAM) saying the move points towards an erratic policy regime and has discouraged carmakers from investing in the country.

Meanwhile, the Supreme Court has allowed Delhi police to register its new diesel vehicles having engine capacity of above 2,000cc after paying a green cess of 30 percent of the car’s value. Diesel taxis have been directed to go off the roads in Delhi-NCR from May 1, 2016, as the apex court refused to extend the deadline for taxi operators to convert their diesel taxis to CNG.

The ban in Delhi, along with other factors such as imposition of additional tax  on passenger vehicles announced in the Budget 2016-17, has forced SIAM to cut its forecast for passenger vehicles sales growth in 2016-17 to 6-8 percent from an earlier forecast of 11 percent. In the year ended March 31, 2016, passenger vehicle sales rose 7.24 percent from the previous year to 26,01,236 units, according to the automotive body.