SC ban: Mahindra offers Delhi buyers booking refund

Mahindra and Mahindra will refund booking amounts to all customers in Delhi purchasing new diesel SUVs which come under the recently-imposed Supreme Court ban.

The move comes after India's top court banned the registration of new diesel-powered vehicles above 2000cc in the National Capital Region from 1 January 2015 till 31 March 2016 in an attempt to tackle the alarming levels of pollution in the national capital.

The Indian carmaker added that the affected customers who have placed orders for these SUVs will be given options to purchase cars in the sub-2000cc range, such as the Mahindra TUV300. There is hope for dealers as well as they will be provided with alternatives such as relocating those vehicles to adjoining regions.

Mahindra's mainstays - the Bolero, Xylo, Scorpio, Thar, and XUV500 - which make up over 95 per cent of the company's sales, come under the ban.

According to Pawan Goenka, Mahindra's executive director, the company has more than 1,000 unsold cars with its dealers in Delhi and the National Capital Region (NCR).

Though Delhi and the NCR account for just about 2 per cent of the carmaker's passenger vehicle sales, Goenka said the market plays a very important role in building the brand even as its volume contribution may not be large.

"I don't think anybody can afford to ignore Delhi as a market ... we certainly respect the order of the Supreme Court. We will work to find solutions in line with the court's order, in fairly short time," Goenka said.

According to industry experts, about 4 lakh units of diesel vehicles with 2000cc or higher capacity engines are sold in the country annually, and out of that, 5-8 per cent are sold in Delhi and NCR. Across India, Mahindra has more than 50 per cent share of this market, while Toyota has about 20 per cent and Tata Motors less than 5 per cent.

In order to not let the diesel vehicle ban result in a massive drop in Mahindra's sales, the carmaker plans to introduce more petrol variants in its SUV line-up in the near future, with Mahindra Scorpio and XUV500 the first in line to be equipped with petrol mills.

The company already exports a variant of the Scorpio with a 2.2-litre MPFI turbocharged petrol unit from India, but has not introduced it in the country, considering the fact that there is no demand for a petrol SUV.