Mahindra estimates 2 per cent loss in sales due to diesel-registration ban in Delhi

On December 16, 2015, the Supreme Court declared a ban on the registration of any new diesel-powered SUVs and luxury cars with engine capacities exceeding 2000cc in Delhi and the NCR region till March 31, 2016. This move is part of the SC’s attempt to curb the rising air pollution in the national capital. This decision is bound to affect sale of diesel vehicles that continue to be more popular in the Indian market than their CNG and petrol counterparts.

Many car manufacturers have opposed this move and spearheading this group is Mahindra and Mahindra. The Indian automobile maker is currently riding on the success of the Scorpio, Xylo and XUV500 SUVs - all of which fall in the category of vehicles currently banned from registration in Delhi. Mahindra and Mahindra has expressed its concerns in a letter addressed to the Supreme Court and signed by its company secretary, Narayan Shankar.

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In the letter, Shankar states that while the company empathises with the rising concerns of pollution in Delhi, the Supreme Court must take a holistic view of the situation and look at the overall impact of the decision, once the duration of the court order ends on March 31, 2016. Shankar further elaborated that the overall impact of the court order on Mahindra’s total monthly sales is estimated at 2 per cent.

For the duration of the ban though, the company is evaluating various options to work within the framework given by the Supreme Court.