Auto stocks skid further on NGT order

Tata Motors, M&M, Ashok Leylan, Eicher Motors have slipped between 1%-3% on the BSE

Shares of automobile companies have extended losses in Monday morning trades and are trading lower after the National Green Tribunal (NGT) on Friday has ordered immediate ban on registration of diesel-run cars in the national capital. The order further states that there won’t be any renewal of registration of vehicles that are older than 10 years in Delhi.

Among individual stocks, Tata Motors has skid over 3% to Rs 366, M&M has slipped nearly 2% to Rs 1,238, Ashok Leyland has dropped 0.7% to Rs 85, and Eicher Motors has lost 2.4% to Rs 15,187 on the Bombay Stock Exchange.

Following the order, the automakers are confused over delivery of already booked vehicles, which can lead to a monetary loss of thousands of crores. According to media reports, over 12,000 diesel vehicles would be affected, if the order is passed.

The order came in as a measure to curb the pollution levels in the capital city after the Supreme Court suggested that Delhi has become a ‘Gas Chamber’. This is the second jolt to automakers in Delhi, after Delhi government has announced that from Jan1, 2016, odd and even numbered cars will be allowed on alternate days.