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BS-III Ban Leaves Auto Industry High and Dry

BS-III Ban Leaves Auto Industry High and Dry

The dynamic and ever changing business environment is one aspect that organizations contend with. Even with meticulous planning and immaculate execution of plans, organizations may falter due to changes in external environment forces like economic conditions and regulatory directives that are issued from time to time.

The Indian automobile industry faced a similar situation when the Honorable Supreme Court banned the sale of BS- III vehicles with effect from April 1, 2017. The directive sent the entire industry into a tizzy. Manufacturers and dealers pressed into action and left no stone unturned to sell the inventory.

Hefty discounts followed especially in the two-wheeler marketplace and scores of consumers benefitted. The magnanimous offers to liquidate inventory reportedly led to a loss of 1,200 crore.

The ban of BS- III enters into its 12th day today. The euphoria amongst consumers regarding freebies and discounts on new vehicles is a thing of the past. The dust has settled. It’s time for the manufacturers to take stock of the situation again.

“Currently, there are around 1.2 lakh units of BS-III vehicle inventory worth around Rs 5,000 crore. Most of them are lying with the dealers,” Society of Indian Automobile Manufacturers (SIAM) Director General Vishnu Mathur was quoted as saying.

Many manufacturers, while ruing the decision of the court, averred that such ad-hoc policy changes will deter investors to pump in money in the automobile industry and jeopardize the overall stability in the sector.

The directives of the apex court came in the wake of growing concerns about the pollution in the country. Earlier the court had imposed an eight month ban on diesel vehicles (2000 CC and above category) in Delhi and NCR region last year.

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