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Delhi diesel car market shrinks after court orders

Sees 20-25% dip in demand for vehicles with engine capacity below 2,000cc

Ajay Modi  |  New Delhi 

City traffic
Image via Shutterstock

Car buyers in this city, one of the country’s top car markets, are showing less interest in purchase of diesel vehicles after the twin orders by the National Green Tribunal (NGT) and the Supreme Court this month.

Dealers say there’s been a 20-25 per cent drop in demand for diesel vehicles with an engine capacity below 2,000cc. Earlier, for two weeks, they'd been unable to sell any diesel vehicle after the NGT order, leaving unsold stock of 8,000 units.

  • Registration of diesel passenger vehicles of 2,000cc and above banned by Supreme Court in NCR till March 31
  • Delhi car dealers witness 20-25% decline in demand for diesel vehicles below 2,000cc after NGT and SC orders
  • Delhi dealers sitting on large unsold diesel vehicle inventory
  • Buyers wary of restrictions on use of diesel vehicles
  • SC likely to impose one-time pollution tax on small diesel cars next month

“The action against diesel passenger vehicles is fresh in the mind of buyers. Some also apprehend restrictions on use of diesel vehicles in the future. On an average, the share of diesel-run cars in our daily sales used to be about 20 per cent before these developments. It is now 15-16 per cent,” said an executive with a company owning multiple Maruti Suzuki dealerships in the capital.

The NGT had on December 11 directed a halt till January 6 on registration of new diesel cars in Delhi or to the renewal of such vehicles more than 10 years old. Five days later, the SC imposed a ban on registration of diesel passenger vehicles with an engine capacity of 2,000cc and above in the entire National Capital Region, till March 31.

Next month, the SC is also likely to impose a one-time pollution tax on diesel cars. The apex court’s order allowed resumption of registration of diesel passenger vehicles below 2,000cc but, as explained, buyers are now wary.

“The ad hoc decisions and actions against diesel vehicles are turning customers away and there is a rising preference for petrol and natural gas vehicles. Diesel accounted for 40-45 per cent of the total passenger vehicle market in the capital till last month. Now, it is down to 30-35 per cent. Sales of diesel utility vehicles like the Scorpio and XUV500 (Mahindra & Mahindra) and Innova and Fortuner (Toyota) have completely stopped due to the engine capacity restriction,” said a marketing executive with a passenger vehicle manufacturer.

Diesel vehicles emit more nitrogen oxide and particulate matter than petrol-fuelled ones.

Delhi is the sixth largest market for passenger vehicles and companies sold 182,115 in the year ended March 2015. At a national level, the share of diesel in new passenger vehicles has been coming down for two years, on deregulation of diesel prices and the consequent decline in the price gap with petrol.

The proportion was 36 per cent in April-October this year against 37 per cent in FY15 and 42 per cent in FY14.

First Published: Thu, December 31 2015. 00:22 IST