Delhi diesel registration ban to give Audi & BMW edge over market leader Mercedes

SC today banned registration of diesel passenger vehicles-cars and SUVs above engine capacity of 2,000 cc in the capital

Luxury car maker Mercedes Benz, which had been cruising for sometime as the largest player in the domestic luxury vehicle segment, finds itself in a sudden spot.

The Supreme Court order today banning registration of diesel passenger vehicles-cars and sports utility vehicles (SUVs)- above engine capacity of 2,000 cc in Delhi puts the German car maker at a significant disadvantage to its two rivals from Germany-Audi and BMW.

For Mercedes, its entire portfolio of product begins with an engine capacity of about 2,100cc, about 100cc above the cut off range decided by the apex court. About 70 per cent of its sales volume is diesel driven. And Delhi happens to be a significant market contributing about 15 per cent of sales.

 

But for the two competitors- Audi and BMW only a handful of products- fall above the 2,000cc mark. The three month ban on registration of diesel vehicles above 2,000cc in the capital will help Audi and BMW to get an edge over Mercedes. The ban ends on March 31, 2016.

A Mercedes official said that the decision of Supreme Court takes away the level playing field. The dealers in Delhi are sitting on an inventory that will get blocked.

Mercedes operates the largest sales network among the luxury car makers in the country and has taken over Audi and BMW in terms of volume in the Indian market. In the first nine months of the 2015 calendar year, Mercedes sold 10,079 units, up 34 per cent over same period last year. Its sedan portfolio grew 39 per cent while SUVs grew 70 per cent. The nine month volume almost nears the total 2014 sales of 10,201 units. Both Audi and BMW have not shared their India sales number for a while.