NEW DELHI: The ban of diesel vehicles in the national capital region (NCR) above engine capacity of 2000cc has forced German luxury car maker Mercedes-Benz to relook at its India strategy.
“For a company acting globally, there is always a choice to shift to other countries like Russia or Brazil,” said Roland S Folger, MD and CEO of Mercedes-Benz India.
But, Folger hopes that by mid2016 the government will lift the ban. “We are forced to stop some of our investments in India, which were based on opportunity that a market has,” he said.
NCR is close to 20-25% of Mercedes’ domestic volumes, and diesel makes for 80-85% of that. If the ban continues, Folger’s biggest concern is that it won’t be able to achieve the volumes it was targeting.
Luxury cars make for 5-8% of total car sales. In India it is just over 1%.
The diesel ban has also affecting dealers. “Dealers’ business has come down by 30-50%,” Folger said, who said that the ban is a “lost opportunity”. The company would meanwhile add petrol variants.
Mercedes has witnessed more inquiry of petrol vehicles, but Folger said that hasn’t translated to sales. He added that contrary to what the government and the Supreme Court thinks, the new diesel engines emit 25% less CO2 than petrol cars, and once the BS-VI regime starts the diesel engine will be as efficient as the petrol ones.