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On March 8, Vinod Dasari, President, Society of Indian Automobile Manufacturers (SIAM), had declared that “the auto industry is fully committed to commence manufacturing of BS-IV vehicles from April 1 across the country”.
Then came the Supreme Court’s order banning BS-III vehicles from Saturday.
On March 29, Dasari said: “While no one pushed for BS-IV fuel availability for seven years to change over faster, this sudden decision – just a few days before the changeover — is rather unfortunate as it causes undue stress on the entire industry, and cause loss of jobs.”
It is clear from these diverse statements that the automobile manufacturers are still hesitant to upgrade their vehicles to the latest pollution norms. Some of the companies that may be hit the most by the ban are Honda Motorcycle & Scooter India (HMSI), Hero MotoCorp and TVS Motor in two-wheelers, and Tata Motors, Mahindra & Mahindra (M&M) and Ashok Leyland in the commercial vehicle segment.
However, most passenger car makers, except companies such as Tata Motors and M&M, will not face much of an impact, as they had prepared to make their products BS-IV compliant.
So, what led Dasari to change his stance? There could be many reasons. Several auto companies are crying foul after the apex court’s order, as they fear massive losses due to the country-wide recall of BS-III vehicles. The companies also feel that they may have to spend more to make such vehicles BS-IV compliant within the next few months by tweaking the components.
According to industry sources, the inventory stocks are so high that the companies will not be able to clear them within a day (Friday) from their outlets.
“The industry is trying to minimise the inventories as much as possible. It has to see what can be done to these old vehicles. Although it is possible to upgrade two-wheelers at a lower cost, retrofitting commercial vehicles is a tough job,” an industry source told BusinessLine on condition of anonymity.
To clear their stocks, the companies are giving maximum discounts on BS-III products. For instance, companies like HMSI, are giving discounts up to ₹22,000 across scooters and motorcycles. Some dealers have also offered discounts of up to ₹25,000 on Activa scooters to clear stocks at the earliest.
Hero MotoCorp, the largest two-wheeler company, is offering discounts up to ₹12,500 on BS-III scooters and motorcycles.
Bajaj Auto is running a ‘special scheme’ on specified models for only Thursday and Friday for models such as CT100, Platina, V15, Avenger and Pulsar RS200 with discounts between ₹3,000 and ₹13,000.
The company has also written to its dealers saying: “In case of manual billing, copy of invoice on indicated dates with proof of registration would need to be submitted to Bajaj Auto which shall be cleared on a case-to-case basis at the sole discretion of Bajaj Auto.”
The company said that if there were any unsold inventories, there was a possibility for export. Bajaj Auto exports to around 70 countries.
Meanwhile, the auto industry said that there was no clarity on the court’s order on whether the ban was limited to sales or also to registration.
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