SC allows BS4 vehicles to be sold till April 24 but restricts it to 10% of the ₹6400 crore stock

SC allows BS4 vehicles to be sold till April 24 but restricts it to 10% of the ₹6400 crore stock
REUTERS/Amit Dave/File PhotoREUTERS
  • The Supreme Court has eased the restrictions on sale of BS4 vehicles in the country.
  • Auto makers will be allowed to sell the BS4 vehicles till April 24.
  • The order allows companies to sell 10% of their existing BS4 vehicles during the 10-day extension period.
In a relief to the Indian auto industry, the Supreme Court has relaxed the March 31 deadline for selling BS4 vehicles in the country. The apex court has given an extension of 10 days post the end of the lockdown period.

However, this is only a conditional extension as the companies will only be allowed to sell 10% of their existing stocks during the 10-day period. Additionally, Delhi NCR has been left out of the purview of the order, meaning that BS4 vehicles cannot be sold in Delhi NCR after March 31.

Slowdown in the industry and Coronavirus led to a decline in the sales

The Supreme Court was hearing a plea filed by the Federation of Automobile Dealers Association (FADA) and the Society of Automobile Manufacturers (SIAM) for extending the March 31 deadline for the sale of BS4 vehicles.
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FADA argued that the auto makers could not sell the existing inventory due to the slowdown in the industry and then the nationwide lockdown due to Coronavirus.

Only 10% of the stock can be sold

As per the apex court order, the companies can sell only 10% of their existing stocks, meaning only 640 crore worth of BS4 vehicles will be allowed to be sold. Additionally, the companies cannot sell any BS4 vehicle in the Delhi NCR region after March 31.

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The court has further said that the BS4 vehicles that are sold have to be registered within 10 days of sale.

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.
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It is estimated that the automobile industry is likely to suffer a loss of ₹13,000 to ₹15,000 crore due to the Coronavirus pandemic. As the production has also been halted, SIAM has estimated a minimum loss of ₹2,300 crore each day.

Supreme Court wants automobile companies to sacrifice for the country

The Supreme Court said, “Let's learn to sacrifice, do something for country's environment, have sympathy... We understand the psychology of businesses and dealers... You want to take advantage of Coronavirus for a few days of lockdown in March."

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See also:

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

Recovering from coronavirus will be a tough task for Tata Motors and Jaguar Land Rover
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