COVID-19 outbreak – Auto industry likely to urge SC to extend BS 6 deadline in India

COVID-19 outbreak - Auto industry likely to urge SC to extend BS 6 deadline in India
COVID-19 outbreak – Auto industry likely to urge SC to extend BS 6 deadline in India

The auto industry has previously requested the Supreme Court of India to extend the deadline for BS 6 in the country as companies and dealerships are still struggling to sell of their stock. While previously, the request was ascribed to a variety of factors, such as the sales slowdown of 2019, liquidity crunch, etc. However, the country’s top court had remained steadfast in its decision. Unfortunately, the situation has further worsened with the global coronavirus pandemic. And according to the latest reports, the industry is planning to approach the Supreme Court yet again with the hope for some relief.

The two key auto industry bodies, i.e. the Society of Indian Automobile Manufacturers (SIAM) and Federation Of Automobile Dealers Associations (FADA), are planning to bring up the issue with the Supreme Court again and request it for an extension. In case you forgot, the new BS 6 norms come into effect from 1 April 2020. This means that companies cannot sell BS 4 vehicles in India since the government will not register them from that date onward.

SIAM and FADA say the coronavirus outbreak has impeded their efforts to clear inventory.

Vinkesh Gulati, vice president, FADA, said, “We are compelled to approach the Supreme Court once again following high unsold BS-IV inventory. There is distress among two-wheeler dealers because of the high stock levels, and low walk-ins to dealerships due to the coronavirus outbreak. Four-wheeler BS-IV stocks are manageable, except for a few manufacturers and certain non-moving colours and models.”

As mentioned above, the industry had already been struggling with declining sales for over a year. And now that India is set to transition to BS VI standards from 1 April, companies and dealers only have 15 days to clear their stocks of BS 4 vehicles. And, once again, that stock is still sizeable, especially for two-wheelers, for a lot of OEMs. SIAM also noted that the COVID-19 outbreak has caused a slowdown in the overall economic activity and keeping customers from coming out to buy vehicles. This has, obviously, affected both vehicle sales as well as inventory.

SIAM will first discuss the matter with members before it takes the next step in this regard.

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