Dealers reach SC against ban on BS-IV vehicle sales; say, can’t clear stock amid low demand

By: |
December 18, 2019 6:24 PM

If the dealers are left with an inventory of BS-IV, many of them may face severe financial crisis, which could even threaten the existence of their businesses.

car inventory, siam, fada, auto crisis, auto slowdown, car sales, maruti, hyundai,The industry body is insisting on extending the timeline to stop the sales and registration of BS-IV vehicles.

The automobile industry body has knocked on the door of the apex court in the fear that it won’t be able to sell off its entire BS-IV stock by the end of the current fiscal year. The Federation of Automobile Dealers Associations (FADA) on behalf of its members today filed an impleadment application in the Supreme Court where it has been appealed to protect the inventory and in turn the dealership survival of the automobile dealers by allowing them to sell and register the vehicles purchased before 1 March 2020, which remains unsold by the end of March 2020.

“With the current timeline of all India BS-VI fuel availability of 1 April 2020, most manufacturers will shift to 100% BS-VI vehicle production only by the end of February 2020 or the 1st week of March 2020,” said FADA President Ashish Harsharaj Kale.

Looking at this timeline of BS-VI production and the current fluctuating demand situation, despite putting in the best of efforts, there is a possibility that many dealers are not able to ensure 100% liquidation of BS-IV inventory purchased by them in the course of business before the deadline of 1 April 2020, Ashish Harsharaj kale added.

Also Read: Many cars sold don’t hit roads for this reason; auto slowdown deeper than it looks

The industry body is insisting on extending the timeline to stop the sale and registration of BS-IV vehicles because if the dealers are left with an inventory of BS-IV, many of them may face severe financial crisis, which could even threaten the existence of their businesses.

FADA includes members ranging from large dealership groups to family-run small scale dealerships, which can face challenges according to their financial risk appetite. The auto sector has been suffering for a long time, seeing a fall in sales, job losses, and slow production. The order to stop BS-IV vehicles’ sales and registration in the next financial year can come as a double-edged sword for many dealers.

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