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Ford, Renault, Mahindra spearhead opposition of tax on diesel cars, say it is not just

The way for the government getting ready to impose tax on diesel cars seem to be difficult. American car maker Ford and French automobile leader Renault have strongly opposed the proposed tax on diesel cars by the government calling it to be unjust. Notably, after reports of the subsidized diesel intended to be used in the agriculture sector is being used heavily by cars, the government formed a committee that has recommended a higher tax on diesel cars. The result of the new tax policy will make the diesel cars costlier by over Rs 80,000 to the worry of the car makers.

Now that the D-day is approaching when the decision will be finally taken regarding the taxing diesel cars, car companies including Ford and Renault have reportedly come out in open opposing it. Significantly, both Ford and Renault have strong plans for 2012 and the tax on diesel cars will impact realization of their plans. Where Ford has just launched Ford Fiesta AT and will be launching Ford Ecosport SUV and Ford B Max MPV soon, French car maker will be launching Renault Duster in June followed by one more car in this year. Notably, Renault is heavily banking on diesel make of its cars and has launched Renault Pulse small car in diesel only option. If the diesel cars are taxed more, the price of diesel cars will rise and will adversely impact diesel car sales in the country.

Questioning the very proposal of imposing tax on diesel cars, the two car cos have asked the government the intention behind taxing only car industry and said that it is going to have negative impact on the health of the auto industry in India. Ford India president and managing director Michael Boneham reportedly said that personal cars consume only 1 percent of the total diesel consumed in India. Similar thoughts were propagated by Renault Chief Marx Nassif who reportedly told that if the government changes its policy en route it will risk an investment of Rs 4500 crore made jointly by Renault and Nissan. Homegrown SUV maker Mahindra that produces a large number diesel cars has also called the proposed tax as ‘retrograde’ for the auto industry.