Post April 1 deadline nearly 50% BS-III vehicles remain unsold

It seems that all the discounting given by automobile companies to clear unsold Bharat Stage (BS) III inventory was not enough. 

More than half of over eight lakh vehicles, including two-wheelers and trucks, of BS III variants remain still unsold past April 1, according to dealership association Federation of Automobile Dealers Association (FADA).

John Paul, President of FADA said that despite the deep discounts offered by automobile companies a total of around 50-60% of unsold BS III vehicles still remains pending at dealerships. He said that while two-wheeler companies were able to liquidate a large portion of their stocks due to the huge discounts, other categories such as commercial vehicles (CV) BS III stocks still remain.

“Automobile companies are still figuring out a plan on how to tackle the issue. They may plan to ask the Supreme Court to review the order. While some automobile companies such as Bajaj Auto, Ashok Leyland and Bharat Benz have agreed to take back the unsold BS III stocks from dealerships, the others have yet to make their decision,” he said.

Also read: Huge discounts on BS III two-wheelers leave dealerships sold out

He further said that it may not be that easy for every automobile company to export the unsold BS III inventory. 

“Exports are not going to be as easy as it is earlier thought. They will have to look at other things than only emission standards in these countries they are looking to export. It may be easy to sell a bike but it won't be that easy to sell a larger vehicle such as a UV or commercial vehicle,” Paul said.

Two-wheelers were the most successful to pull of sales within the two days due to discounts as high as Rs 24,000 on BS III bikes, as many dealerships were sold out by March 31.

However, the hardest hit was the commercial vehicles segment as it of a much higher price segment and even though they were expecting demand from fleet operators it was not much. This was despite offering discounts of up to Rs 50,000 on pick-ups with BS-III engines.

Also read: BSIII ban: Commercial vehicle makers are set to suffer more than two-wheelers

“CVs will be the most affected by the SC ban as BS III inventory still is unsold,” said automobile analysts Sneha Prashant and Abhishek Kumar Jain in an HDFC Securities report. They further added, “We believe Ashok Leyland will face some slowdown in Q1FY18 and will clear its inventory through exports.”

None of the automobile companies the Zeebiz team reached out to responded regarding their unsold BS-III vehicles post April 1.