Five solutions for unsold BS4 car, bike stock: Buyback, scrap, second-hand

The unsold BS4 vehicles can be disposed off in multiple ways including company buybacks, scrapping them, exporting to receptive markets and so on.

By:April 8, 2020 5:17 PM
Image used for representationImage used for representation


Yes, it’s April 8 and we are still talking about BS4 vehicles. Remember the time when the BS3 to BS4 conversion had taken place? No one mentioned BS3 vehicles after the specified date. However while it’s way past the April 1 deadline, there is a still debate on how many BS4 vehicles can be sold, registered and more. We will have a separate discussion on these but for now, what happens if you are a dealer and have unsold BS4 stock that’s available with you. Here are the things you can do if you are a dealer and are reading this.

1. Buyback. Yes that’s what a company can do. Hero MotoCorp for example, assured it’s dealers recently that it will buyback the unsold BS4 inventory. While Hero has been generous, others haven’t been so forthcoming. Buying back will involve huge monetary loss to the company but will instill faith amongst it’s dealers. As a dealer, you can urge the dealer to buyback the remaining stock.

2. Scrapping. Unfortunately while a BS4 vehicle, given the present conditions, cannot be registered post April 30, 2020, it will have to be scrapped. A dealer cannot sell the vehicle and will incur heavy losses in this method.

3. A dealer can register the car or bike under his employee’s name and then sell the vehicle as a used one. A high ranking official, who didn’t chose to be named, said that as many as 60 per cent of the dealers have chosen to do this before March 31. In this fashion, they have managed to salvage some amount of money. These vehicles are now being sold in the used market. It is noteworthy that the vehicles haven’t been even used or moved an inch more than the dealer stockyard to showroom. Perhaps a trip to the RTO and back for registration.

4. An auto manufacturer can always take back the model, modify it according to BS6 standards and sell it. However, if these are minor modifications, like in the case of petrol-powered cars, might not need ARAI approval. At the same time, motorcycles transitioning from carb to fuel injection will require proper validation. Will be the hard way but the automakers will definitely be able to salvage the situation.

5. After buying back these vehicles, the manufacturer can export them to markets which still follow the previous norms or equivalent of BS4. These will ensure that the makers cover some of their losses.

The Supreme Court was upfront in saying that the extension is purely on the basis that there was a nationwide lockdown. Post lockdown, dealers can only sell 10 per cent of their unsold BS4 inventory. This stock notification has already been sent to the Supreme Court. Now there are fresh talks of the lockdown being extended. Whether or not the Supreme Court takes an action, is yet to be ascertained.

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