Dealers are sitting on BS-IV two-wheeler stocks of Rs 3,800 crore

With just two weeks left for the automobile sector to switch over to the new emission norms, two-wheeler dealers in the country are sitting on BS-IV inventory worth over Rs 3,800 crore. 

Federation of Automobile Dealers Associations (Fada) says a very high number of two-wheeler dealers will not be able to fully liquidate their BS-IV inventory and its members have expressed inadequate support from their original equipment manufacturers (OEMs) for 100 per cent liquidation of this stock. After March 31, BS-IV vehicles can't be sold in India. Fada says 700,000 BS-IV two-wheelers are lying with dealers, valued at around Rs 3,850 crore. 

Ashish Harsharaj Kale, president, Fada, said two-wheeler inventory of BS-IV vehicles remains a serious concern. 
 

“With the Supreme Court not considering our application for allowing extension of sale period for BS-IV, Fada urges two-wheeler OEMs to handhold dealers for 100 per cent liquidation of their BS-IV stocks,” said Kale. 

He said passenger and commercial vehicles inventory was at a reasonable level, but selling slow moving, non-popular models is a challenge. Fada has already advocated for return of unsold BS-IV stocks and will be pursuing this for its members if the need arises, as many dealers will be unable to sustain such losses. On demand and outlook, Kale said that with banks and non-banking financial companies getting into a cautious mode with regards to financing BS-IV stocks and transport authorities prescribing their own cut off dates for permanent registration, retails of 100 per cent of dealer inventory of BS-IV stocks continue to be a challenge. Retail sales of two-wheelers grew by around 1.5 per cent to 12,85,398 units in February 2020 from 12,66,163 units in February 2019. 

Dealers are also facing an alarming drop in customer walk-ins at showrooms due to the coronavirus scare. 

Kale said nearly 60 per cent of sales happen through walk-ins in the two-wheeler segment.