The woes just keep mounting for India's beleaguered automobile makers. As the streets and showrooms empty out over fears of novel coronavirus (COVID-19), car and bike brands, fearful of additional losses due to unsold inventory, have knocked on the doors of the Supreme Court.
Their plea? Extension of the deadline for the sale of Bharat Stage (BS) IV vehicles in the country.
Only BS VI vehicles are stipulated to be sold in the country from April 1.
Pleading for an extension of sale of Bharat Stage IV vehicles are both the Society of Indian Automobile Manufacturers (SIAM) and the Federation of Automobile Dealers Association (FADA). This, despite FADA's petition for an extension beyond March 31 being thrown out by the Supreme Court last month. The reason behind the latest move by automobile manufacturers? COVID-19.
FADA president Ashish Harsharaj Kale explains, “Post our initial application, there has been a drastic change in conducting 'business as usual'. SARS-CoV2, which emerged in China, has rapidly spread around the globe and also across India.” Kale says dealerships around the country have been able to do near-zero business due to the pandemic scare, leaving them with unsold inventories of BS IV vehicles.
“Counter sales have fallen by 60-70 per cent across auto dealerships in these past few days. The situation has worsened in the past three-four days with lockdown situation in many towns and cities and some district magistrates issuing notices of closure of shops and establishments, including auto dealerships, to stop the spread of the virus,” Kale notes.
FADA has petitioned the Supreme Court for an urgent hearing on its request for permission of sale and registration of BS IV vehicles till May 31 “owing to situations, which are beyond our control, and the fact that many of our members may face dealership closures if left with unsold BS IV stocks,” according to Kale.
Based on an October 2018 Supreme Court (SC) judgement, sale of all vehicles with engines conforming to BS IV emission norms, the prevalent standard in India, are to be stopped by March 31. Only vehicles conforming to BS VI norms (India is leapfrogging over one emission standard level, with the Supreme Court order in mind of the pollution levels in the country) will be sold from April 1, 2020.
For the auto makers, not only does the transformation—that required thousands of crores in investment in R&D of the new models—mean higher cost prices, the slowdown in the Indian economy over the past one-and-half years or so has meant sales and bottom lines are under siege. Most automobile brands have measured a sharp dip in their figures in the first, and possibly second, quarter of the coming financial year due to this.
Auto makers have also approached the Supreme Court against some state governments recently advancing the deadline for registration of BS IV vehicles from the original cut-off date of March 31. Some state governments had recently issued circulars directing that no applications for registration of BS IV vehicles will be accepted on or after dates much ahead of the original deadline of March 31. The cut-off dates ranges from February 29 to March 25 from state to state, though BS VI emission compliance is mandated only from April 1.
Uttarakhand, for example, had decreed that no BS IV vehicles will be allowed to be registered after March 25. “These circulars have put customers, dealers and vehicle manufacturers in severe discomfort, as each of them are racing against time to exhaust the BS IV stocks, which are with the dealers,” stated SIAM president Rajan Wadhera.
