Action shifts to Centre as stand-off over the BS IV deadline continues

With barely a month to go before Bharat Stage IV emission norms kick-in nationwide, opinions are still divided on its interpretation.

While a ‘minority’ section of the automotive industry led by Bajaj Auto believes that the kickoff date on April 1 should only mandate registration of BS IV vehicles by dealerships, the vast majority insists this should actually mark the starting production date at plants.

The Ministry of Road Transport and Highways is scheduled to discuss this issue with the Environment Pollution (Prevention and Control) Authority and the Society of Indian Automobile Manufacturers on March 20 before taking a final call.

With BS IV scheduled to be implemented from April 1, the auto industry hopes that any decision does not translate into “catastrophic consequences” for BS III vehicle stocks with dealers. The projections for April 1, when BS IV kicks off, put inventory levels at 7.5 lakh two-wheelers, 20,000 passenger cars, 45,000 three-wheelers, and 70,000 commercial vehicles.

If the Centre opts for registration as the way forward, some companies will take a massive hit on stock losses.

Pawan Goenka, Managing Director of Mahindra & Mahindra, believes that the rule on BS IV is very clear and there is no question of any misinterpretation. “After March 31, no BS III vehicle can be produced and it is not a first time given that this was the case on previous occasions too,” he says.

As Goenka reiterates, this is the norm not just in India but across the world when new emission norms are based on the manufacturing date. After all, he reasons, manufacturing and sales cut-off cannot happen on the same day.

Face-off On the other side of the fence is Rajiv Bajaj, Managing Director of Bajaj Auto, who had fired the first salvo recently when he accused manufacturers of dragging their feet on BS IV norms. According to him, the rules were crystal clear in stating that April 1, 2017 would mark registration, and not production, of BS IV-compliant vehicles.

Bajaj said the enforcing authorities had already made known that the BS IV exercise would be carried out in two parts unlike the past. The first half already came into effect on April 1, 2016 for new products and the industry was given a complete year to change all existing vehicles to BS IV.

“It was only this time that the date was split for the industry to handle large volumes,” he had reiterated. Bajaj Auto had begun the exercise in September and completed it this January. Toyota Kirloskar Motor, likewise, had readied its BS IV range a year earlier while Daimler India Commercial Vehicles recently indicated that it is all set too.

While steering clear of a debate on the subject, M&M’s Goenka says it is is not a question of just the number of days or weeks of inventory with a manufacturer since this has an ageing process.

“We cannot control or force dealers to clear old inventory on a given date. After all, you need customers to buy vehicles,” he explains.

According to Goenka, it is a little too late in the day to be debating the subject. From M&M’s point of view, there is “no strain or stress of any kind” in moving to the new emissions regime.

“In fact, we had even said why wait till April 1 as we would have been ready even if the date had been earlier,” he adds.

The ball is now in the Centre’s court and it remains to be seen what finally emerges in the meeting three weeks down the line.

Clarification: The quote attributed to Rajiv Bajaj, MD, Bajaj Auto is wrong. He drove home the point of the dates being split without making any reference to the rules as cited. The error is regretted.

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