Diesel ban to hit future investments, lead to job loss: Merc

New Delhi, Dec 16: Hit hard by the Supreme Court ban on registration of vehicles above 2,000 cc, German luxury carmaker Mercedes-Benz today said it will impact its future investments in India and will lead to job losses.

With all of its models sold in India affected by the ban till March 31 next year, the company said the "decision is going to adversely affect the auto industry as a whole and will certainly encourage the creation of an unequal ground".

"This ban on diesel engines also creates an environment of uncertainty and will severely impact our expansion plans and future investments put in place for the Indian market," Mercedes-Benz India said in a statement.

It sells a total of 24 models in India starting with the A-Class, priced at Rs 27.5 lakh, going up to Rs 2.7 crore for the S63 AMG coupe (all prices ex-showroom, Delhi).

In January, the company had announced plans to invest Rs 150 crore in this year for adding an assembly line for CLA compact sedan taking the total investment at its Chakan Plant to over Rs 1,000 crore.

With the expansion, the plant's capacity increased to 20,000 units per year. The company added that there will be job losses at its dealerships, component supply partners and at its own manufacturing unit at Chakan in Maharashtra.

"We also have to consider the loss of jobs that this will result at the dealerships, at the vendors producing diesel engines and also negatively impacting our own workforce," the company said.

According to industry sources, Mercedes Benz India employs around 1,500-2,000 people at its dealerships in Delhi/NCR region. It employs around 1,000 people at it Chakan plant in Maharashtra.

The sources said it will be unsustainable for the Mercedes Benz dealerships to protect jobs when they are not selling any cars in the Delhi-NCR region.

The Supreme Court today banned registration of diesel-run SUVs and cars having engine capacity beyond 2000 cc in Delhi and National Capital Region till March 31, as it unveiled a slew of measures to curb the alarming rise in pollution levels in the city.

Mercedes-Benz and Tata Motors-owned JLR are the worst hit due to the order as their entire diesel model range is powered by engines above 2,000 cc.

PTI