The Honourable Supreme Court of India has extended the deadline for the transition from BS4 to BS6 emission norms by ten days. The Supreme Court has ruled that it will allow sale of BS4 vehicles after the BS6 implementation deadline (1 April 2020), but only on certain conditions. The ruling stated that the sale of BS4 vehicles after 31 March 2020 will be allowed everywhere in India except Delhi-NCR. This will be in effect only for 10 days after the national lockdown for containment of the COVID-19 Epidemic has been lifted. For reference, the national lockdown was enforced on the 25th of this month and is going to remain effective for a period of 21 days.
The slowing economy had already made BS4 stock clearance difficult for dealers, and now the COVID-19 outbreak has made the situation even worse. On 17th of March, the Federation of Automobile Dealers Associations (FADA) had announced that counter sales had fallen by 60-70% across auto dealerships in the past few days. At that time, there was a partial lockdown situation in many towns and cities. On behalf of its members, FADA once again tried approaching the Hon’ble Supreme Court to extend the BS6 implementation deadline.
Prior to the implementation of the nation wide lockdown the unsold two-wheeler BS4 inventory at dealerships across the country stood at 8.35 lakh units valued at around Rs 4,600 crores while situation in passenger vehicle and commercial vehicle segments seemed a little better. Seeing this huge number of unsold inventory, it is highly unlikely to save them from incurring huge losses.
The Supreme Court noted this in the ruling stating that only 10% of unsold inventory of BS4 vehicles can be sold during the 10-day period after the national lockdown is lifted. So, it’s still a worrisome situation for the auto industry in India. In the present scenario, there’s a lot of scare and panic in the nation, and so, even after the lockdown is lifted, many prospective customers may avoid non-essential things like vehicle purchase to avoid taking the risk of being infected with COVID-19.
Even before the emergence of the health crisis, the auto industry was reeling with a slowdown and experts from the auto industry were of the opinion that it’s very difficult to meet the BS6 implementation deadline and it had seeked an extension. Buyers who were unable to register their BS4 vehicles purchased before 25th March will be allowed to do so during the aforementioned 10-day period, which will be 15-24 April 2020. It remains to be seen whether this 10 day extension will bring some relief to auto manufacturers and dealers.