Even after providing hefty discounts to liquidate the existing inventory of BS 3 vehicle in the aftermath of the ban imposed on such vehicles by the Supreme Court, the automobile industry is understood to have an inventory of 1.2 lakh vehicles which is worth Rs 5,000 crore according to the Society of Indian Automobile manufacturers.
According to Vishnu Mathur, director general, SIAM, most of the stocks in the two wheeler segment has been liquidated while the same is not the case for the commercial vehicles. Most of the inventory is lying with the dealers. Manufacturers are now thinking of exporting the existing inventory of BS 3 vehicles. Before the ban was imposed, Siam submitted that 6.7 lakh two wheelers, 96,000 trucks and 16,000 cars were there with the manufacturers. Subsequently, the vehicle manufacturers offered huge discounts to exhaust the inventory. According to SIAM this may have cost the manufacturers losses worth Rs 1,200 crore.
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Earlier, during January-August, 2016 the Supreme court imposed ban on diesel vehicles with engines more than 2000 cc in the national capital region also resulted in huge losses for the automobile manufacturers. The ban was revoked after the apex court decided to impose 1% green cess on the such vehicles.
“These kind of decisions will impact future investment in the sector as it gives rise to uncertainties. The auto industry never thought of tackling such crisis within such a short period of time,” said Sugato Sen, deputy director general, SIAM.
