Mumbai: Two-wheeler and commercial vehicle makers and dealers that hold unsold Bharat Stage-IV stock may offer huge discounts in the coming days, with less than three weeks left to register such vehicles, industry executives said.
There is substantial unsold stock of BS-IV units with some of the manufacturers, they said. The country will adopt BS-VI emission standards on April 1, from when vehicles complying with BS-IV standards wouldn’t be allowed to sell or register.
While the BS-IV passenger vehicle inventory is said to be in a comfortable position, except for some specific colours, models and configuration of a few manufacturers, it is not so in two-wheelers and small CVs, said dealers.
“If you don’t sell the BS-IV stocks by March 31, then a dealer is stuck with unsold inventory as the customer cannot even register the vehicle post March 31. So, keeping this in mind, OEMs are being supportive and standing by dealers by giving them extra financial support as otherwise their bottom lines will be hit,” said Nikunj Sanghi, a veteran automobile dealer and director-international affairs of the Federation of Automotive Dealers Association. “No dealer can offer discounts higher than his margins on each product.”
Advertisements to clear BS-IV stock clearly indicate that with the prevailing discounts, these vehicles are far cheaper than the BS-VI versions, he said.
Discounts, including exchange bonus, currently are in the range of ₹10,000 for models like Hero’s Pleasure and Maestro scooters and as much as ₹40,000 for the Mahindra Pickup, Camper and the Maxi Truck.
Right across the country, auto companies are working overtime as no dealer can afford to have unsold BS-IV vehicles. Dealers are being advised that unless these vehicles were registered, they should not deliver those to customers. Dealers are currently much more focused on liquidating their BS-IV stocks, especially in twowheelers, than wooing customers to buy the BS-VI versions.
Dealers are nervous also about possible delays they could face in the registration process at RTOs towards the end of the month. There is no provision for doing a temporary registration in March and completing the final registration in April. As a desperate measure, some dealers may register vehicles in their own names, only to sell them off as second-hand vehicles next month, albeit at a huge loss, said some industry executives.
This situation is emerging at a time when the industry is going through one of its worst slowdowns. Two-wheeler sales fell nearly 13% year-on-year between April 2019 and January 2020 to about 15.26 million units.
“Companies that took a conscious call almost 6-7 months ago to restrict production and dispatches of BS-IV vehicles are sitting on manageable levels of inventory,” said Vinay Raghunath, partner, auto sector performance improvement, at EY India.