M&M eyes options after SC ruling

 With the company likely to bear the brunt of the recent Supreme Court ruling which banned registration of diesel sports utility vehicles and high-end vehicles with engine capacities of over 2000 cc till March 31, 2016, auto major Mahindra & Mahindra (M&M) is looking at alternate options to minimise the impact.

“M&M is looking at options of downsizing its existing diesel engines to circumvent the current ban on its vehicles. The company is focused on developing a strong petrol engine line-up over the next few years,” the management said in an investor call.

According to brokerage firm Nirmal Bang, M&M, Tata Motors and Toyota Kirloskar Motors (TKM) will be hit the most as they offer over 2,000 cc engine capacity diesel car/SUV models. Luxury car makers like Mercedes-Benz, BMW, Audi, and Jaguar Land Rover will also be adversely impacted as most luxury diesel cars have engines of over 2,000 cc capacity.

M&M will be the worst-affected, given the fact that most of its models, barring Quanto, TUV 300 and Verito, are over 2000 cc capacity. TKM and Tata Motors will also have an adverse impact as they have higher than 2,000 cc diesel SUV models in India.

As far as the impact on sales is concerned, the company clarified that only a small segment of its sales will be impacted. “For M&M, the impact is limited to two per cent of its monthly auto segment sales. Dealer inventory worth Rs 100 crore is impacted through this ban,” the management indicated.

The company was also hopeful that the court will take a more holistic approach to determine the longer-term roadmap to lower pollution levels in Delhi. Besides, it also hopes that the industry body makes representations and suggestions to the court over the course of the next few weeks.

Ban-boxing

 M&M looking strongly at petrol cars
 Dealer inventory worth Rs 100 cr hit
 Toyota, Tata Motors also feel the heat