1. Supreme Court bans sale of BS III vehicles, motown eyes Rs 30,000 crore loss

Supreme Court bans sale of BS III vehicles, motown eyes Rs 30,000 crore loss

With the Supreme Court banning the sale and registration of Bharat Stage III-compliant engines from April 1, manufacturers of commercial vehicles and two-wheelers could together end up losing some R20,000-30,000 crore.

By: | New Delhi | Updated: March 30, 2017 5:52 PM
The government’s stand in court was that manufacturers should be allowed to sell BS III-compliant vehicles till stocks were exhausted.

With the Supreme Court banning the sale and registration of Bharat Stage III-compliant engines from April 1, manufacturers of commercial vehicles and two-wheelers could together end up losing some R20,000-30,000 crore. The court said on Wednesday the “health of the people is far more important than the commercial interest of automobile manufacturers”. A bench of justices Madan B Lokur and Deepak Gupta prohibited registration of any vehicles that do not meet the Bharat Stage IV emission norm standards from April 1. The government’s stand in court was that manufacturers should be allowed to sell BS III-compliant vehicles till stocks were exhausted. Those fleet owners who have purchased BS III vehicles recently but not registered them could be in a spot. SIAM has estimated the inventory of trucks and two-wheelers — fitted with BS III engines — lying in factories and with dealers at 96,000 and 6.7 lakh vehicles, respectively.

Although most automakers have started making BS IV-compliant engines, they do have some inventory of the older models. Tata Motors, Ashok Leyland, Hero MotoCorp and TVS Motors could be among those impacted. By one estimate, 55,000-60,000 heavy trucks and buses were sold in February and March to fleet owners. A large number of these are not yet fully built and so are yet to be registered, according to Naveen Gupta, general secretary, All India Motor Transport Congress. Vinod Dasari, managing director, Ashok Leyland, said his firm had produced some BS III vehicles since fuel to run BS IV vehicles was not available in all parts of the country.

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“Most CV manufacturers are selling BS IV vehicles in the metros and Tier 1 cities,” Dasari said. Ashok Leyland plans to export the existing inventory. Hero MotoCorp, which sells around 60% of its vehicles in the rural market, said on Tuesday it could lose up to R1,600 crore following the ban. Companies like Bajaj Auto, Toyota and Hyundai Motor are better prepared for the ban with very little inventory. The Environment Pollution Control Authority moved the apex court on Friday to stop the sale of BS III- compliant vehicles from the start of April.

Bajaj Auto also made a similar plea last week for a ban on the sale of BS III vehicles to curb the rising pollution levels. Rajiv Bajaj, managing director, Bajaj Auto, said his firm was prepared to meet the deadline of April 1. “We have started making all vehicles with BS IV engines since last year,” Bajaj said. Vikram Kirloskar, vice-chairman, Toyota Kirloskar Motors, said the company had switched from BS III to BS IV last year had no inventory. “We will do the same when it comes to migrating to BS VI in 2020,” Kirloskar said.

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