Discourage sales of BMWs, Audis, Indian minister says

Nov 12, 2010, 11:31 GMT

New Delhi - India's environment minister Friday said luxury cars like German-made BMWs and Audis were a major source of greenhouse gases and called for changes in domestic policy to discourage their use, news reports said.

Jairam Ramesh emphasized the need to do away with local subsidies on diesel, saying they had only helped sales of luxury cars, the IANS news agency reported.

'We do not need subsidy in diesel as it is only helping BMW, Audi and other heavy carbon SUVs (sport utility vehicles),' he was quoted as saying.

Ramesh said India needed to correct its fiscal policies to discourage sales of luxury cars and said subsidies were instead required for liquefied petroleum gas to help farmers.

'The luxurious growth of large-size vehicles like SUVs is really a growth of concern ... use of vehicles like SUVs and BMWs in countries like India is criminal,' Ramesh said, according to the PTI news agency.

'Put a penalty on the types of cars that you don't want to see on the roads which are diesel-driven cars, SUVs,' he said, adding, 'We cannot ask people to buy or not to buy a particular car. But through an effective fiscal policy, we certainly can have an impact.'

The transport sector contributes 7.5 per cent to greenhouse gas emissions in India, the world's third-largest emitter.

Car sales are hitting all-time highs in rapidly growing India, which with China has helped lift Germany's luxury car industry out of recessionary trouble.

From January to May, Germany's car business in India grew by almost a third, according to the German carmakers' association VDA.

Luxury cars are the fastest-growing segment in India with roughly 10,000 units expected to be sold this year. BMW, Audi and Mercedes Benz are in the fray with their best-selling models.

Last month, in a deal valued at over 14 million dollars, Mercedes Benz sold 150 models to industrialists on a single day, making it the highest-valued car transaction in India.

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