Mahindra Truck and Bus (MTB) on Monday announced it is on course for the transition to BS-VI emission norms, set to be enforced from April 1, 2020. The move is aimed at mitigating the challenges faced by customers as the commercial vehicle (CV) industry is already grappling with a downturn, it said.

MTB’s range of heavy trucks will see a price increase of ₹1.5-2.5 lakh post the transition to BS-VI, it added.

The company also said it plans to start selling BS-VI trucks to dealers by February, with retail sales to commence by April.

Retail sales cannot start before the April 1 deadline as, unlike in petrol vehicles, diesel BS-VI vehicles cannot run without the availability of the corresponding fuel.

Vinod Sahay, CEO, MTB, said the company will see the least number of changes in its vehicles once the transition to BS-VI is complete. The hardware commonality between between the company’s BS-IV and BS-VI vehicles is higher than 80 per cent, he added.

Hardware changes

“As a company, we are trying to ensure the least amount of hardware changes when it comes to this transition because we believe our customers have enough challenges on their plate. The transition to BS-VI should be the last thing as a challenge on their plate,” said Sahay.

“The challenge of BS-VI will probably be much higher for the CV industry because if you don’t see green shoots in the economy, the risk of producing BS-IV vehicles will be much higher,” said Rajan Wadhera, President, Automotive Sector, Mahindra & Mahindra Ltd. “One cannot convert a BS-IV vehicle into a BS-VI one — it is (it will become) junk. If we get a profit of ₹1 lakh by selling a truck, we get a loss of ₹2.5 lakh by not selling it. Therefore we are mindful of the inventory. And all those who believe that a fire sale will happen are grossly mistaken.”

In the first half of FY20, the CV industry saw a contraction of 51 per cent in the HCV segment, 20 per cent in the LCV segment, 3 per cent in buses and 18 per cent in ICV. MTB saw a decline of 51 per cent in HCV, 15 per cent in LCV load, and 20 per cent in buses, posting an overall decline of 34 per cent.

Multiple headwinds

The CV segment has been plagued by multiple headwinds such as the revision of axle load norms in July 2018 and the consequent overcapacity it brought in, freight availability and rates being down by 20 per cent, infrastructure projects slowing down, a liquidity crisis, and difficulty in procuring vehicle finance, as well as the high discounts that players are resorting to.