Delhi parking fee may drive down car sales

Delhi-NCR residents woke up to alarmingly high air pollution levels on Tuesday. A report in the Capital’s leading daily Hindustan Times said that visibility dropped to 200 metres in the capital city. The real-time pollution monitors found most indicators many times over their permissible limit.

As the air quality dropped to the “severe” category on the Air Quality Index, The Environment Pollution Control Authority (EPCA) recommended an immediate hike in parking fees by four times across Delhi. The authority feels that the increased parking fees will curb vehicular movement, its first-aid solution in what seems a public health emergency situation.

One of the directives of the authority read “Immediate enhancement of parking fees by 4 times and depositing additional funds in dedicated parking fund with municipalities”. EPCA’s conditions have been imposed under the provisions of Graded Response Action Plan under severe category. “This is an emergency plan, which cannot become a substitute for long term and decisive action to cut air pollution,” said Bhure Lal, EPCA chairperson.

To further put cars off the road, a drop in metro fares during peak hours and allowing odd or even cars on alternate days are also being considered.

But the moot question for car firms: Will the new curbs slowdown registrations of new cars in the Delhi-NCR and therefore, affect sales of automobile companies?

Automobile experts feel that the decision to hike parking fee won’t affect the sales over night but will certainly have a slowing down effect over time.

“When you register a vehicle in Delhi, there is an MCD parking fee attached to it and in the last few years, that parking component has gradually gone up.  With the decision to increase parking fees, some may actually decide not to buy a car. But in the last few years, cab aggregators like Uber and Ola have come up, which will compensate any fall in sales for personal use,” said an automobile industry source.

There is also feeling that the government may not be able to sustain the increased parking fee for a long time. Though Delhi-NCR has increased access to public transport with its Metro rail, access to these stations are not easy. So commuters using the Metro have to spend time travelling from their homes to the station and again from the station to their place of work, negating the time saved in the Metro.

“Every time this becomes an issue of the chicken and the egg. We deserve better and safer public transport if the government is planning to hike parking fees. I don’t think this will lead to lesser sales of automobiles. Whosoever has money will buy and be able to afford parking fee as well, “said Snighdha Purab, an HR professional who drives to Nehru Place every day for work.

Elsewhere in the world, higher parking or registration charges or additional duty on vehicles have eventually affected sales. In London, where vehicle excise duty rose sharply for cars purchased after April 1, 2017, UK car sales dropped by a fifth, according to a report in The Guardian.

Change in taxes drastically hit the market for new vehicles in London with new car registrations falling by almost 20% every month. The increased excise charges came in addition to a £10 ‘pollution charge’, some vehicles had to pay for entering the city limits. It’s expected that the parking fee in London could cost £21.50, more than the average living wage.

The move to impose penal parking fees is among the many strategies the local authorities have tried in their effort to bring down Delhi-NCR’s vehicle population and thereby, the local air pollution levels. The state government had worked out a solution to ply odd and even numbered cars on alternative days, while sale of large diesel cars was curbed within Delhi limits. Both plans fell through eventually as they were tough to implement operationally.