Vehicles worth nearly Rs. 1000 crore have piled up at dealerships after the National Green Tribunal (NGT) banned registration of diesel cars in the capital city of Delhi. The ban on diesel vehicle registration has left companies like Mahindra, Tata, Toyota, Ford, BMW, Audi, and Mercedes in a very bad situation.
Even dealerships are facing problems since customers have made full payments but are not being able to take deliveries because cars can't be registered. Some customers are opting to register their cars in surrounding locations like Noida and Gurgaon, while others are opting to buy petrol vehicles.
Some manufacturers feel that the NGT's decision has shut down their operations in Delhi completely, while dealers are left confused about what to do with the stock in hand. December is usually a month that registers high sales, as a lot of year end discounts are on offer for cars, and also customers buy cars during this month as carmakers increase prices from January.
Carmakers such as Mahindra is affected the most since all its vehicles are diesel operated and dealers have no idea what to do if the ban continues. Dealers will also have to pay penalty charges if the vehicles are not sold on time and will have to end up covering financing costs as payments will be delayed.
Pawan Goenka, the Executive Director of Mahindra expressed his disappointment about NGT's ban. Almost 36 percent of the vehicles sold in Delhi are diesel vehicles and almost 90 percent of SUVs sold in Delhi are also diesel vehicles.
According to a few officials from top manufacturing companies, there are almost 12,000 diesel vehicles that are currently piled up with dealers in Delhi. Even luxury carmakers are in a bad situation since almost 90 percent of vehicles sold by Mercedes, Audi, and BMW are diesel variants.