Bajaj cries foul as BS IV divides industry

It wasn’t one of the usual glitzy product launches with the glamour quotient thrown in. This time around, Bajaj Auto had called for a press conference in Mumbai to discuss the Bharat Stage IV emission norms scheduled to kick off from April 1. To that extent, the mood was quite sombre as Rajiv Bajaj, Managing Director, went up to the stage.

“Emissions is a subject that is boring, dull, drab and technical,” he admitted though what followed was something quite to the contrary. It was a visibly annoyed Bajaj who made it known that with barely 45 days to go before BS IV norms become mandatory, the auto industry was not quite keeping its end of the bargain.

As he elaborated, there has been some confusion over the last few months on what exactly should happen. “There is a group that believes that April 1 is the production date while we belong to a minority of one or two which believes that this (date) pertains to sales or registration,” said Bajaj.

How has this confusion occurred especially on something as critical as the environment and in a country which is gearing up for even more stringent BS VI norms in 2020? And while a section of the industry maintains that April 1 for BS IV relates to the production date, Bajaj was not buying the argument.

“Controlling pollution/emissions is important for people and not machines. Why should the industry think a changeover should apply to their machines only and not the environment? We at Bajaj Auto do not believe this,” he said.

According to Bajaj, the authorities had clearly 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. This would also give time for the supply chain comprising vendors, dealers and testing agencies to be prepared.

“It was only this time that the date was split for the industry to handle large volumes,” he reiterated. This also put in perspective why his company had begun the exercise in September and completed the marathon by January this year. Toyota Kirloskar Motor, likewise, had readied its BS IV range many months in advance.

From the industry’s point of view, registering vehicles from April 1 this year could be catastrophic since large stocks are piled up at plants and dealerships. Bajaj said he found this argument difficult to accept simply because inventory levels were not so large and barely four weeks on an average for manufacturers.

Within industry circles, estimates suggest that two-wheeler BS III stocks will be a staggering 7.5 lakh units as on March 31 while commercial vehicles are projected to be about 75,000 units. Passenger vehicles are more manageable at 20,000 units. Interestingly, three-wheeler numbers were initially put at 45,000 units, which was bizarre considering that Bajaj Auto is the market leader with a 60 per cent share and will have zilch BS III stocks on March 31!

“Between December and March, instead of slowing down production, industry has piled up stocks. They have mercilessly chosen to take the law into their own hands. Why are we in India constantly running in the opposite direction?” questioned Bajaj.

From the company’s point of view, meeting stringent emission norms is a regular cycle given that exports account for over 40 per cent of its production. Motorcycle and three-wheeler shipments go across to Europe, Australia, the US, Latin America, ASEAN and Africa. Back home, the BS IV exercise has resulted in a price increase ranging from ₹1,000-₹7,000 for its product range.

“Clearly, our competitive advantage is eroded because of this delay. Beyond this and Bajaj Auto, why is Indian industry seen as laggards, polluting and zero on technology? When there is an opportunity to improve, the industry wants to drag its feet. Why are they delaying what is better for the country?” questioned Bajaj.

Thanks to the BS IV rules interpretation, he said the auto industry looks regressive when it should look world-class, confident and competent. In his view, BS III vehicles represent low price and higher polluting levels. “Where is the question of existing products being granted amnesty? We had our heart in the right place on time and decided to go a little earlier on the conversion. Delaying to March 31 and start making excuses is downright cheating,” he said.

Bajaj added that his disdain came from his experience with the quadricycle, which is now exported as the Qute but is yet to debut in India. According to him, the idea that was set in motion nearly a decade earlier was intended to make a better three-wheeler with a host of features like fuel injection, water cooling and so on.

“I am pushing for better lives for autorickshaw drivers with four-wheels and seatbelts but the Qute is sold in Ethiopia and Sri Lanka but not here. How does India not understand that four wheels are better than three?” wondered Bajaj.

Getting back to the BS IV muddle, he said it was surprising that the Centre was silent on the issue when they were far more direct when dealing with stakeholders on the BS VI deadline. Extending the date for BS IV, he said, would be a step in the wrong direction and set a bad precedent.

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