Shares of some of the leading car makers are under selling pressure on November 27, after a news report suggested that Centre has found out 'higher than mandated' fleet emission levels by eight of them, during the previous financial year, which could result in penalties of around Rs 7,300 crore.
Shares of M&M are lower by over 3 percent at 2:15pm on November 27, contributing significantly to the fall on index. Shares of Hyundai Motors India are lower by nearly half a percent.
A news report from The Indian Express said that Hyundai faces the steepest penalty totalling over Rs 2,800 crore, followed by Mahindra at nearly Rs 1,800 crore. Kia Motors stands to face a penalty of over Rs 1,300 crore, the report said. For Hyundai Motor India, the penalty amounts to nearly 60 per cent of the profit it posted for FY23.
The Bureau of Energy Efficiency (BEE) norms required car companies to achieve Corporate Average Fuel Efficiency (CAFE) for all of the units sold in FY23. The tighter rules, effective from January 2023 mandated a fuel consumption of up to 4.78 litres per 100 km, and carbon dioxide emissions of not more than 113 grams per km. Car makers are arguing that since the stricter rules came into force from January 1, they cannot be levied for the entire fiscal year 2023.
"It’s currently an ongoing discussion, and we are seeking more clarity from the government," The Indian Express quoted an automotive sector executive who was not named.
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