₹6,400 crore worth BS4 vehicles remain unsold due to Coronavirus

₹6,400 crore worth BS4 vehicles remain unsold due to Coronavirus
New scooters are pictured at a stock yard during a media tour to the newly inaugurated second assembly line of a Honda Motorcycle & Scooter India manufacturing plant in Vithalapur in the western state of Gujarat, India June 29, 2016. REUTERS/Amit Dave/File PhotoREUTERS
The Coronavirus pandemic has had an adverse effect on many industries in the country as the government has announced a complete lockdown to prevent the spread of the disease. The automobile industry has also been affected as the deadline to register BS4 vehicles is fast approaching.

The Bharat Stage 6 or BS6 norms are set to be implemented from April 1, 2020 and as per a Supreme Court order, no BS4 vehicles can be sold after this date. As the country is in lockdown, vehicle dealers have been forced to shut down, resulting in unsold inventory of BS4 vehicles.

BS4 vehicles worth nearly ₹6,400 crore remain unsold

As per Federation of Automobiles Dealers Association (FADA) President Ashish Harsharaj Kale, over 12,000 dealer outlets are currently shut in the country and BS4 inventory worth ₹6,400 crore remains unsold.

“There are 7 lakh two wheelers worth ₹3,850 crore in dealerships. Add to this, 15,000 passenger vehicles worth ₹1,050 crore and 12,000 trucks worth ₹1,440 crore.” said Kale.

“In normal course our dealers could have easily sold the remaining BSIV stock during the balance period in March before the BSIV deadline. In fact, our retail sales had been at double digits this month before the CoVid-19 disruptions set in.” said Hero MotoCorp spokesperson Bharatendu Kabi told CNBC-TV18.

Hero MotoCorp approaches Supreme Court for an extension of BS4 deadline

Two-wheeler major Hero MotoCorp approached the Supreme Court seeking an extension for sale and registration of BS4 vehicles in the country. The company requested an extension of 3 months to help companies clear their stock.

In a regulatory filing, the company said, "In view of the completely unforeseen developments that have arisen out of the prevailing force majeure situation on account of Covid-19, we have prayed for an extension of time for a period of three months, as this has hampered all aspects of our industry.”

Not all automakers want an extension

While companies like Hero MotoCorp and Honda Motorcycle and Scooter India want an extension, there have been reports that companies like Bajaj Auto, TVS and Royal Enfield are not too keen on it.

These companies reportedly have minimal or no BS4 inventory and would be at a disadvantage if the cheaper BS4 vehicles are allowed to be sold after the March 31 deadline.

In addition to dealerships being shut down, several automakers have also been forced to stop production due to Coronavirus. Honda, TVS and other companies have temporarily stopped production in the country.

See also:

India goes into a complete lockdown in 30 states and union territories

No minimum balance, use any ATM⁠— all the changes for bank customers in India amidst Coronavirus-related lockdown

The big announcements from India's Finance Minister Nirmala Sitharaman