Auto Dealers May Not Liquidate BS-IV Stock Before March 31 Deadline: FADA

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Image for Representation (Reuters)

Image for Representation (Reuters)

The ongoing gross sales hunch within the vehicle business together with a pointy decline in buyer demand because of the coronavirus outbreak has impacted BS-IV auto gross sales.

  • PTI
  • Last Updated: March 11, 2020, 10:37 AM IST
  • Edited by: Chhavianshika Singh

With a number of state governments issuing circulars to finish registration course of for BS-IV autos a lot earlier than March 31, 2020, and the worry of coronavirus protecting patrons away from showrooms, vehicle sellers worry that they’d not be capable to liquidate the BS-IV stock earlier than the month-end deadline. According to vehicle sellers’ physique Federation of Automobile Dealers Associations (FADA), issues had been beneath management until February-end and it was solely within the first week of March that the sellers began getting circulars from state transport departments with deadlines for getting the BS-IV autos registered.

Besides, the banks additionally got here out with notices that they’d not finance BS-IV inventory after particular dates in March, additional impacting the arrogance of the sellers. It was adopted by the coronavirus outbreak, which has led to a steep fall in footfalls within the showrooms. “So, lot many things have come together and, now, suddenly there is fear among dealers that they won’t be able to liquidate the BS-IV stock. At the start of March, we were reasonably confident that the problem of leftover stock would not be much,” FADA President Ashish Harsharaj Kale instructed PTI.

Dealers have began getting circulars from state transport departments with completely different units of deadlines to shut the registration course of for BS-IV fashions, he added. The supplier physique has approached the state governments and the Ministry of Road Transport and Highways concerning the matter however the confusion has already impacted the arrogance of the supplier neighborhood, he added. FADA can be partaking with banks to proceed finance for BS-IV models until the March-end, Kale mentioned. “We have received some support from states like Punjab, West Bengal and Chhattisgarh. They have assured that they will open even on the weekends to clear the registration process,” he added.

Elaborating on the BS-IV inventory ranges, Kale mentioned two-wheeler sellers had been the worst impacted with over 20-30 days of the outdated stock but to be liquidated. “The problem is across the board in the two-wheeler segment. Comparatively, dealers of passenger vehicles and commercial vehicles are in better shape,” Kale mentioned. When requested in regards to the technique in a worst-case state of affairs if sellers had been unable to liquidate the BS-IV inventory earlier than March 31, Kale mentioned, “If the feedback comes across that they are unable to sell their stock then we will have a discussion with the OEMs (original equipment manufactures) that how we can jointly come out of this, otherwise the dealers will face huge losses.”

FADA would additionally search authorized treatment, although the Supreme Court has already dominated out any extension of the final date of BS-IV automobile registration within the nation. “But, since there are so many new factors which have come in so that call (taking legal recourse) we will take around March 11-12 after consulting our members, but we will have to take action, otherwise dealers will have huge losses,” Kale mentioned. These are the one two choices obtainable with FADA proper now, he added.

“We will discuss with OEMs how do we do it (sell vehicles)? Should we bring in better schemes or the OEMs take the stock back and liquidate it somewhere else,” Kale mentioned. In the present circumstances, any unsold BS-IV automobile would find yourself as scrap after March 31. From April 1, solely BS-VI-compliant autos might be registered within the nation.

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