ANALYSIS. Apex court leaves auto-makers gasping…offers a breather too

It is back to square one for diesel automakers with the Supreme Court in no mood to revoke its recently imposed three-month ban in Delhi.

What is even more disconcerting is the fact that what is now confined to vehicles over 2000cc could be extended to all diesel cars. The silver lining, though, is that the Court will first seek industry inputs before going ahead with this move.

The auto sector is clearly rattled and the top priority now is to provide more documentary evidence to prove that diesel is not the sole culprit for Delhi’s foul air. “You are saying diesel vehicles pollute less. So are your vehicles emitting oxygen?" the judges had reportedly remarked to the claims of automakers affected by the ban, of which the worst hit are Toyota Kirloskar Motor, Mahindra & Mahindra and Mercedes-Benz.

Free pricing Since the last couple of years when it was the darling of the masses till recently, diesel has rapidly lost its lustre. There was a time when customers made a beeline for diesel cars when the fuel was heavily subsidised and petrol lost out in the process. However, with diesel pricing now deregulated, there is no longer a big price differential vis-à-vis petrol and the mood in the market has changed.

In all fairness, automakers were prepared for this transition and had, in fact, constantly maintained that free pricing was a better alternative to slapping heavier excise levies on diesel vehicles.

This had, indeed, been the stance of the Centre during the oil price crisis when crude prices had spiralled out of control.

“Diesel has always been the villain of the piece even though manufacturers are pulling out all stops to ensure that its particulate matter is in check with top-class technology,” says an auto industry executive.

Despite this, he adds, it continues to make the news for “entirely wrong reasons” associated with its carcinogenic effects.

Uncertain future With Delhi hitting the headlines for its high emission levels, diesel has been held culpable once again even, while automakers insist that it is clean and the preferred fuel in the West.

At this point in time, the bigger concern is planning for the future, especially when it means investments in plants and products. “Till recently, the entire mood was in favour of diesel and, today, the scenario has completely changed. How can we possibly cope with such ad hoc policies?” asks another company official.

As the country prepares for new emission norms and its march ahead as the third largest car producer in the world, the auto industry is not entirely sure if these goalposts can be achieved.

“What we need is a clear roadmap for the future which is just not in place yet,” adds the official.