Car dealers await Supreme Court decision over sale of BS III vehicles as old stock now at 9 lakh units

Automobile manufacturers have all been on a spree lately of introducing their products with BS IV compliant engines.

By: | Updated: March 29, 2017 2:58 PM

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Bharat Stage IV emission standards are set to put be in place starting 1st April, which gives rise to an unavoidable question over what happens to the vehicles that have already been manufactured and only comply to Bharat Stage III standards. Whether sale and registration of vehicles with BS III compliant engines will be continued after 31st March is not clear yet. The apex court is yet to take a decision on the matter. About 900,000 BS III vehicles, with an estimated value of Rs 12000 crore, lie in the inventory of dealers, according to a data released by SIAM.

The Federation of Automobile Dealers’ Associations (FADA) has taken up the matter with Supreme Court, asking the court to allow sale and registration of BS III vehicles after 31st March. About all 20,000 dealers in India have stocks of BS III vehicles, especially of commercial vehicles and two wheelers.

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Automobile manufacturers have all been on a spree lately of introducing their products with BS IV compliant engines. And even as more and more of manufacturers re-introduce their products compliant with new emission norms, a stash of vehicles with BS III engine has piled up owing to a confusion over the court's order. It was widely understood that manufacturing of BS III vehicles was to be seized after 31st March and that the court made no mention of the last date for sale and registration of vehicles with outdated emission norms compliance.

Supreme Court's decision would make way for two scenarios. If the court agrees that 31st March is the last date for manufacturing of BS III vehicles and that they can be sold, brands like Toyota who stopped making BSIII engines long back would find the decision unfair as BS III vehicles are currently being sold on lower prices and even on discounted prices.

On the other hand, if sales and registration of BS III vehicles is banned after 31st March manufacturers stand to face a heavy loss and the BS III vehicle inventory is wide and there would be no where to settle the costs. The outdated stock can not be exported either owing to the sheer number of the vehicles and also the rest of the world already moved on from the BS III emission norms. Time will tell which of the scenarios comes into being. The Supreme Court will announce its decision on the matter after 31st March.

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