Indian carmakers call for comprehensive plan after Delhi smog crackdown

By REUTERS | 18 December 2015

MUMBAI: India's carmakers and dealers have called for a clear, nationwide policy to combat air pollution, after a crackdown on diesel cars and trucks in New Delhi, which campaigners have vowed to extend to other cities.

A Supreme Court decision on Wednesday to alleviate the smog-choked capital has unsettled India's car industry, which says an uneven, haphazard policy makes it hard to plan investments and allows damaging regulatory arbitrage across states.

"To improve the air quality ... we must take a comprehensive view of various factors causing pollution," said Vikram Kirloskar, vice-chairman of Toyota Motor Corp's local unit.

According to the World Health Organisation, 13 of the world's 20 most polluted cities are in India. To combat this, the government is debating policies including reducing cars in Delhi or offering cash to drivers who scrap old vehicles.

But the government has yet to announce a holistic policy or target more difficult causes of pollution such as generators or even motorbikes, a family vehicle for millions of middle class Indians. Wednesday's decision, the Supreme Court said in its order, would not hit "the common man".

New Delhi has one of the world's worst air pollution levels, but other cities such as Patna and Kolkata in India's east and Mumbai in the west also frequently register hazardous levels.

On Thursday, according to measurements taken by the U.S.

Consulate, Delhi registered an air quality index of 393 - well over the 301 level that marks "hazardous" levels. But Kolkata was "very unhealthy" at 212 and Mumbai "unhealthy" at 172 - all higher than Beijing, which was at 151.

"There needs to be a clearly laid out roadmap of what the government expects from the (auto) industry for the next 5-10 years, so companies get time to adapt and respond," said Mohit Arora, executive director at consultancy J.D. Power Asia Pacific.

Anumita Roychowdhury, executive director at India's Centre for Science and Environment said the decision to ban large diesel vehicles in Delhi would trigger similar moves elsewhere, making a comprehensive solution essential.

"We need a national solution to the diesel problem," she said, adding that the government should either equalise the price of petrol and diesel or tax diesel cars at a higher rate until India adopts unified, stricter emission norms.

Analysts say that among those who have the most to lose from India's haphazard policies are dealers selling cars made by Toyota, Mahindra & Mahindra, Daimler AG's and Tata Motors' luxury arm, Jaguar Land Rover, brands who make large diesel cars.

Dealers in Delhi are already trying to send about 2,000 unsold - now banned - diesel vehicles to other dealerships in India or back to carmakers, said K.V.S. Rao, president of the Federation of Automobile Dealers Association.

"This is just a trigger, a starting point," said Rao.

For Rao, a bigger worry is the call for a tax on all diesel vehicles - to be heard by the Supreme Court on Jan 5.