How automakers responded to ban on diesel cars in NCR

Car manufacturers have made attempts to negate the impact of diesel ban but a further extension of the ban or its spread outside NCR could complicate things further

Roland Folger was faced with a difficult challenge two months after assuming charge as the India head of Mercedes Benz last October. The December 16 ban on sales of certain diesel vehicles in the Delhi National Capital Region (NCR) effectively meant no sales for the German luxury car maker in a key market.

The ban also translated into hardships for the company's dealers in Delhi, Noida and Gurgaon. "The dealers in NCR are the ones that have faced a competitive disadvantage. They look at the next door showroom and see them selling because they have a vehicle range of less than 2,000 cc (cubic centimetre). We have been doing whatever we could. We have convinced our dealers outside NCR to give up their allocations of petrol back to us so that we could make it available for the dealers in NCR. That has worked to a certain extent. Some of the customers have started picking up petrol," said Folger, managing director and chief executive officer at Mercedes-Benz India.

Among the luxury car makers, the worst impacted by the Supreme Court ban were Mercedes Benz and Jaguar Land Rover. For BMW and Audi, the diesel range of vehicles had options below 2,000 cc. The ban is in place till March 31 and a further decision is likely before the month-end.

A dealer in NCR for Mercedes Benz said that presence as well as availability of petrol variants in several models has helped them run close to normal operations after the ban was imposed.

Other companies have also made efforts to minimise the impact of ban on their sales and the business at dealerships. For example, luxury car maker Jaguar Land Rover last month launched its sports car Jaguar XE in the country with a petrol only engine. A diesel variant would follow later.

Utility vehicle major Mahindra & Mahindra's popular products such as XUV500 and Scorpio were also hit by the Supreme Court ban. But, it responded with advancing the launch of 1,990 cc diesel engine (that was being developed for the global market) for vehicles in NCR. The new engine M&M launched in January-end has taken care of its NCR dealers to a large extent.

"Right now, it is only for NCR. We will wait to see how customers respond. If they are happy with its efficiency and are indifferent to the engine size, we will make it national," Pawan Goenka, executive director had said last month.

Japanese car maker Toyota's utility vehicles Innova and Fortuner were also impacted by the diesel ban. The company has announced it will launch Innova with petrol engine, running successfully in foreign markets, for India soon.

Companies have made attempts to negate the impact of diesel ban but a further extension of the ban or its spread outside NCR could complicate things further. There have been public interest litigations seeking ban on diesel vehicles in cities outside Delhi as well, making car makers wary.