Auto stocks choke on anti-pollution drive

The National Green Tribunal (NGT) on Friday decided to halt registration of diesel-engine vehicles in New Delhi until Jan 6th. This move is obviously aimed at curbing the toxic air pollution which has engulfed the country’s capital. The NGT also directed state-owned companies and all government-related organizations in the municipality to present plans for phasing out diesel vehicles by the time judges consider the case again on Jan. 6.

Though this is a temporary ban, the auto industry is up in arms saying that this will adversely impact the companies, especially Tata Motors, Ashok Leyland, Eicher Motors and M&M. Delhi is the country’s biggest auto market, accounting for about 7 percent of national deliveries.

Apart from a small percentage of passenger cars, these companies make commercial vehicles and two wheelers, which are almost fully diesel-fueled thus they are bound to feel the impact.

The NGT has said that at all the RTOs in Delhi around 1,300 to 1,400 vehicles are being registered everyday which include all types of vehicles heavy and light including two wheelers.

Naturally, Tata Motors leads the losers on the bourses today, down 3% at Rs.368, Ashok Leyland is down less than 0.5% at Rs.86, Eicher Motors is down Rs.15140, a decline of 3% and M&M is down 2% at Rs.1241.