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Old 12th August 2016, 19:54   #16
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Default re: Delhi's 2 litre diesel ban lifted; 1% green cess imposed

Here are some reactions from the auto industry after the ban was lifted.

RC Bhargava, Chairman, Maruti Suzuki:

Quote:
"It is a welcome step, and we were waiting for it for a long time. We were never affected by the ban, but the sentiment was moving away from diesel to petrol, and we do have an investment made in diesel capacity. This order will restore the parity between diesel and petrol again. It is not going to make too much of a difference to us either way actually.

I do not think it is going to make any difference in the overall volume of sales, because people who were giving up diesel cars were moving to petrol cars. It is not that they were giving up buying a car altogether.

Manufacturers who had vehicles above 2 litres in the diesel category like Mercedes, Toyota, and Mahindra were very badly hit. Even though we were not in that category, we had full sympathy with their point of view, because they had done nothing wrong. So they will surely benefit from this ruling
."
Dr Pawan Goenka, Executive Director, Mahindra & Mahindra:

Quote:
"We are very relieved with the decision of the Honourable Supreme Court today. Hope this decision will put all controversy surrounding diesel fuel behind us and we will be able to focus on the more important task of making our vehicles compliant with BS VI norms by April 2020."
A company spokesperson for Mercedes Benz India:

Quote:
"We have followed the earlier direction of the Supreme Court and filed an Interim Application seeking relief on the ban on our cars. Following the court suggestion, we as a voluntary interim measure, offered to pay 1 percent of the ex-showroom price of the vehicle towards anticipated Environment Compensation Charge as a deposit, and not on the premise that our vehicles are polluting the environment.

We reiterate that, being the pioneers of numerous technological innovations, Mercedes-Benz has the technology available and can switch our entire fleet to BS VI by 2018, however, we need compatible fuel to do so, to provide our customers with the latest technologies which are available worldwide. We welcome the government's decision to pre-pone mandatory BS VI to 2020. We think the introduction of BS VI fuel is the best viable option to curb pollution. Mercedes-Benz India is waiting for compatible fuel quality and as soon as the required diesel fuel is made available we are ready to switch our portfolio quickly to the EU VI standard."
Joe King, Head, Audi India:

Quote:
"It is pleasing to get clarity, particularly for the customers. The lack of clarity has already had a severe negative impact with the worst affected being people working at dealerships. There have already been job losses due to the impact this ban has had on business in the Delhi NCR. Short-term decisions lead to increased uncertainty for the future. It creates a lot of confusion for the market in general. What we really need is a long term roadmap. We need clarity on policy direction and time to amend our strategy in line with the customer demand. It is however pleasing to see this welcome step and hope that this will lead to some stability for business in the Delhi NCR."
Subrata Ray, Sr Group VP, Corporate Sector Ratings:

Quote:
"It is a positive step for automobile OEMs, especially for the SUV and Luxury segment. With the Delhi-NCR market contributing almost 10 percent to overall PV sales in India and even a bigger proportion to Luxury Car segment, the SC's decision has come as a relief for automobile manufacturers and their dealers, who had seen significant loss of business since December 2015.

As per ICRA's estimates, 30 percent of Utility Vehicle (UV) segment in India had come under the ban. In addition, almost 50-60 percent of the Luxury Car market in India (i.e. 35,000 units pa) was also adversely impacted because of the ban. In lieu of uplifting the ban, the SC has offered the OEMs to pay 1 percent cess, which will be passed on to the customers and is unlikely to adversely impact demand in ICRA's view."
Abdul Majeed, Partner, Price Waterhouse:

Quote:
"Lifting of ban on bigger vehicle in NCR region is a good move because this step alone will not address the emission issue. We need to figure out holistic solutions in automotive sector by replacing old vehicles on the road. Promoting environment-friendly vehicles as well as significantly improving public transport are some of the areas which requires immediate attention. In addition, we need to move to higher and more uniform emission standards across the country."
ET
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Old 12th August 2016, 20:05   #17
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Default re: Delhi's 2 litre diesel ban lifted; 1% green cess imposed

Will the buyers have to pay road tax for 10 years, or 15 years? AFAIK, the NGT ruling regarding 10 year old diesels in NCR stays?
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Old 12th August 2016, 20:10   #18
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Default re: Delhi's 2 litre diesel ban lifted; 1% green cess imposed

I think the question still remains, who will pay the Environment Cess? Auto manufacturers or the buyer? Why do I have the feeling that the consumers like always will have to bear the ultimate price. Hope the honorable court reduces this cess in the future if not remove altogether.

But, its a welcome decision to a half baked solution that was put in place in the first place.

drive_angry

Last edited by drive_angry : 12th August 2016 at 20:11. Reason: Added more information
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Old 12th August 2016, 20:23   #19
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Default re: Delhi's 2 litre diesel ban lifted; 1% green cess imposed

Very easy for manufacturer's to pay the 1% cess because in the end they are always going to collect it from us only.
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Old 12th August 2016, 20:45   #20
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Default re: Delhi's 2 litre diesel ban lifted; 1% green cess imposed

Does this mean by paying 1% more one can pollute the environment or the manufacturer can produce one that pollutes more. It has been discussed in other threads about the taxation based on the CO emission irrespective of engine size.
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Old 12th August 2016, 21:25   #21
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And this introduces a small category of people in NCR who bought their 1.99 mHawk engine cars during these 8 months of the ban. The resale value for their vehicles will now potentially go for a toss!
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Old 12th August 2016, 23:29   #22
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Default re: Delhi's 2 litre diesel ban lifted; 1% green cess imposed

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Originally Posted by sourabhzen View Post
In that case Supreme Court already achieved most of its targets.
I was referring to the small individual case, not the broader picture. Most of the cars with 2+ liter diesel engines are heavy.

Force a man to buy a petrol Innova, Mercedes, Audi or BMW, he'll complain about high running costs.
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Old 13th August 2016, 00:19   #23
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Default re: Delhi's 2 litre diesel ban lifted; 1% green cess imposed

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Originally Posted by skoda0505 View Post
And this introduces a small category of people in NCR who bought their 1.99 mHawk engine cars during these 8 months of the ban. The resale value for their vehicles will now potentially go for a toss!
Resale value of all diesel vehicles is gone. But I fail to understand how it is different for 1.99 l.

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Originally Posted by landcruiser123 View Post

Force a man to buy a petrol Innova, Mercedes, Audi or BMW, he'll complain about high running costs.
Those who will buy these cars will not buy them without knowing the running costs. Moreover, in present conditions petrols will fetch higher take value.

Moreover, some people will never stop complaining, no matter what.

Last edited by GTO : 15th August 2016 at 13:31. Reason: Typos
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Old 13th August 2016, 07:24   #24
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I think everyone wanted a dignified way out of this impasse. But it really was a brave and bold move by the supreme court , to step in and to stir a hornets nest on this issue that has made everyone sit up and notice, especially on the scale and urgency of action needed.

Finally the can has only been kicked further down the road. With uncertainty about diesel vehicle life for an existing or prospective owner, the shadow still remains , albeit on a more level field.

Who knows which city will be next and when ?
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Old 13th August 2016, 09:04   #25
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Default re: Delhi's 2 litre diesel ban lifted; 1% green cess imposed

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Originally Posted by sourabhzen View Post
Resale value of all diesel vehicles is gone. But I feel to understand how it is different for 1.99 l.
The 1.99 mHawk engine started selling from this January. Now that the ban is off, Mahindra will try to clear its existing stock and reintroduce the 2.2L in NCR, simply because it doesnt make much sense for them to continue two production lines for two engine variants. This implies that 1) in the coming months, the 1.99L XUV/Scorpio will be heavily discounted since Mahindra will try to clear its existing stock and 2) a niche brand of customers will be created who would have bought the 1.99 during these 8-9 months.

Few years down the line, the resale value will be adversely affected for these customers because a buyer who is given a 2.2 and 1.99 to choose from will "most likely" go with the version that is more sold/available/common and hence the 1.99 resale will be lower. It may not be huge, but still it will be there.
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Old 13th August 2016, 09:16   #26
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Default re: Delhi's 2 litre diesel ban lifted; 1% green cess imposed

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Originally Posted by skoda0505 View Post
... it doesnt make much sense for them to continue two production lines for two engine variants. ...
EVERY other manufacturer does this. So can't imagine why it would be so difficult for Mahindras. In fact a Petrol variant is also on the cards for the XUV which also would be assembled on the same production line at Chakan.

Quote:
This implies that 1) in the coming months, the 1.99L XUV/Scorpio will be heavily discounted since Mahindra will try to clear its existing stock and 2) a niche brand of customers will be created who would have bought the 1.99 during these 8-9 months.

Few years down the line, the resale value will be adversely affected for these customers because a buyer who is given a 2.2 and 1.99 to choose from will "most likely" go with the version that is more sold/available/common and hence the 1.99 resale will be lower. It may not be huge, but still it will be there.
Umm, I fail to see the logic.
First upon all, from power/torque/FE and other perspectives, there is very little (if any) difference between the 1.99L and 2.2L engine options. So if there is no real difference in performance on ground, why would the customers treat the vehicles differently just because the cubic capacity on paper is different?

Secondly, introducing the 1.99L engine option was a 'must' for them as 2+ was banned. Now with the ban gone, I don't see a compelling reason for them to go back to 2.2L. So, I doubt M&M would heavily discount and try to get rid of the stock they have.

Last edited by SDP : 13th August 2016 at 09:18.
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Old 13th August 2016, 09:41   #27
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Default re: Delhi's 2 litre diesel ban lifted; 1% green cess imposed

I doubt Mahindra suddenly came up with a new engine to meet the NGT ban. The development, tests and strategy of use would have been in the making for years. The new ruling would have just caused them a windfall. I remember Anand Mahindra tweeted quite confidently right after the ruling how Mahindra respects the ruling and that they will surprise everyone with their response. That confidence doesn't come from an engine developed overnight.

I had similar resevations about the 2.2 mHawk engine and hence went with the tried and tested 2.6crde when i bought my Scorpio. The 2.0 litre is not fundamentally different from the 2.2. It could be an alteration of bore or stroke? If someone can elaborate the differences between the 2 engines that would be ideal.

My guess is the 2.0 mhawk is here to stay. How and where it will be used I do not know. Notice how Mahindra branded this as a W1.99 instead of W2.0 to manage perceptions around the NGT ban! Smart indeed.

Ive booked the W1.99 and while I can opt out of it and wait for the 2.2, I wont. Time will tell if this was a good decision.

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Old 13th August 2016, 10:06   #28
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Default re: Delhi's 2 litre diesel ban lifted; 1% green cess imposed

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Originally Posted by nkrishnap View Post
Does this mean by paying 1% more one can pollute the environment or the manufacturer can produce one that pollutes more. It has been discussed in other threads about the taxation based on the CO emission irrespective of engine size.
As it stands the Mercedes Blue is the 'greenest' IC technology there is! In fact I am not even convinced that Diesel pollutes more than petrol. The nature of the pollution is different (more HC in one case, more SPM in the other!).

Two issues, one thing the SC exceeded its authority in imposing the cess, and other other decide of Euro-VI, VII, VIII or whatever and let industry get on with it. Neither the SCI nor the NGT has any expertise about this, and there is a band of campaigners who have their own axe to grind, and are influencing their Lordships.
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Old 13th August 2016, 13:41   #29
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Have you ever seen a breakup of any special tax/cess collected and how and where it is spent. All this exercise has done is to increase more tax revenue for the government(aka politicians) to fill its coffers.

I wished this whole saga end up in new stringent procedures and policies to deal with polluting vehicles irrespective of size and what it drinks. I know it was a dream, but in our country we always carry loads of dream about good future isn't it?!

It is not just NCR in many cities people havent realized that they cannot sight stars that easily on clear nights anymore. Did universe change? Nope we are to be blamed. What next?:banghead:

Last edited by sathya_g_m : 13th August 2016 at 13:43.
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Old 13th August 2016, 14:32   #30
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Default re: Delhi's 2 litre diesel ban lifted; 1% green cess imposed

But what about the news that the government has called this judgement unconstitutional citing that the courts have no authority to introduce a new tax. Its a dangerous precedent being set.
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