IT’S a major dilemma confronting policymakers, automobile manufacturers, consumers, environmental activists and courts in India. Even as demand for cars and two-wheelers soars — thanks to rapid economic growth and a burgeoning middle-class — environmental pollution caused by automobiles is choking many cities.

At least that is what environmentalists and even the courts aver, arguing that the country can no longer continue to speed on this route, especially in view of the experience of countries like the US and Japan, the world’s two largest car markets.

During winter months, thick smog envelopes the atmosphere over Delhi and the National Capital Region (NCR) and many environmentalists accuse the automobile industry of adding to the woes of residents, who have to suffer the consequences.

But the powerful automobile industry, comprising leading domestic manufacturers and all the top international car firms, question the premise. According to the Society of Indian Automobile Manufacturers (SIAM), the automobile lobby, pollution caused by cars and other vehicles is negligible, and much of the pollution over the NCR is because of factories spewing out pollutants, hundreds of thousands of diesel generators and other factors.

Last week, Ralph Speth, CEO, JLR, the UK-based luxury carmaker, which is owned by India’s Tata Motors, claimed that cars like Jaguar meet the latest, EU VI norms relating to emissions. “These vehicles drive like a hoover,” he said. “The air they suck in is far dirtier than the air which comes out of it.”

And referring to a recent temporary ban imposed by the Supreme Court on the registration of new vehicles with diesel engine capacities of above 2,000cc in the NCR, Speth claimed that the order had nothing to do with technology.

Predictably, environmentalists slammed Speth. “This is a most irresponsible statement to make at a time when dieselisation in India is contributing towards rising particulate and nitrogen oxides and ozone pollution, and also to the risk of growing lung cancer incidence in cities,” said Anumita Roy Chowdhury, executive director, Centre for Science and Environment (CSE). “Globally diesel cars have come under scrutiny and action for aggravating the problem of nitrogen oxide pollution and high and variable emissions from diesel cars on road,” she added.

Roy also recalled a statement by Mercedes-Benz in the Supreme Court, when it claimed that the emissions from its cars were clean, prompting a judge to retort: “Do your cars emit oxygen?”

The apex court’s orders imposing curbs on the sale of large diesel vehicles has impacted the sale of luxury carmakers like Mercedes-Benz and JLR, besides domestic giants including Mahindra & Mahindra and Tata Motors.

The auto industry is aggressively countering the belief that automobiles contribute to worsening pollution in India. The draft Automotive Mission Plan for 2016-2026, prepared by the union heavy industries ministry and the automobile sector, has questioned the frequent attacks on the auto industry, which it claims have been instigated by environmental pressure groups.

“There is a general perception that a bulk of the atmospheric pollution in many Indian cities today is contributed by automobiles,” said the draft. “However, this perception is erroneous and does not appear to be borne out by facts.

In some cases, legislations and policies have been pronounced in response to certain pressure groups or public opinion without the facts or implication of these policies (on industry or the consumers) getting sufficiently researched.”

Such policy formulation imposes an unreasonable heavy burden on several stakeholders in the automotive industry, but does not deliver the intended benefits, it added.

CONCERNED over the impact of cars on the deteriorating quality of air over the national capital, the Aam Aadmi Party, which is in power in Delhi state, imposed an odd-even scheme in the first fortnight of the year on an experimental basis.

The state government claims the scheme — which saw cars with even-numbered registrations being banned on odd days, and vice-versa — was a huge success and brought down pollution levels. But the automobile industry is questioning these claims.

Last week saw all the top domestic and international auto manufacturers unveil their latest models at the biennial extravaganza of the industry, the Auto Expo, 2016, held in Greater Noida. Most manufacturers focused on compact cars, the fastest-moving vehicles in the industry, though some also focused on hybrids and e-vehicles.

In fact, three domestic majors — Maruti, Mahindra and Tata Motors — have joined hands to develop electric car components in a bid to kick-start the sale of e-cars. The three manufacturers plan to invest about Rs250m into a government-sponsored scheme (the Indian government is expected to invest an equal amount) to speed up the manufacture and sale of electric vehicles.

International majors including General Motors, Ford and Renault are also investing large sums in developing electric vehicles.

One reason why Indian consumers are wary of buying hybrids and electric vehicles — or even opting for compressed natural gas as an alternative to petrol or diesel — is because of lack of related infrastructure. For instance, motorists who have fitted a CNG device in their cars have to wait for a long time for their turn at the filling stations.

State-owned companies are unable to provide them the date and time when the CNG stations will start selling the fuel.

India is today the world’s fifth-largest auto market, with passenger car sales topping 2.75m units. Japanese firm Nomura, Credit Suisse and automotive forecasting firm HIS Automotive see India as the only bright spot in the rather gloomy world of automobiles.

The report on the sector estimates that the passenger vehicle market — which grew by 7.7pc in 2015 — is expected to touch double-digits this year or next. The Indian government expects the automobile industry to boost its ‘Make in India’ campaign.

Global interest in the industry also continues to be high. Many of the carmakers plan to make India their hub for small cars. They include South Korea’s Hyundai; Japanese producer Honda; French auto major Renault, and even local players such as Maruti, Tata Motors and Mahindra & Mahindra.

Published in Dawn, Business & Finance weekly, February 15th, 2016