Two wheelers industry suffered a Rs 600 crores loss due to the distress sale of BSIII Vehicles in the last two days of the financial year after the Supreme Court order banning the sale of BSIII vehicles from 1st of April 2017.
From 2010, BSIII emission norms got implemented in India and shifted to BSIV norms from April 1st, 2016. Vehicle manufacturers were required to change all the existing BSIII vehicles to BSIV standards from 1st of April 2017.
Around 8 lakhs two-wheelers were in stock and most of the two wheelers manufacturing company had no choice but to give a massive discount on sales to clear the stock within two days. The last two days of March, 30th & 31st was seen as a festival season in front of few two wheeler showrooms where people rushed to buy the discounted vehicles as ever before.
According to the report by ICRA Limited (formerly Investment Information and Credit Rating Agency of India Limited), Subrata Ray, Senior Group Vice-President at ICRA said, “The total loss for the two-wheeler industry on account of the discounts offered during March 30-31, 2017 is estimated to be around Rs 600 crore, sizeable share of which would be borne by the OEMs. The resultant discount-induced fire-sales are likely to suppress the fourth-quarter earnings of automobile OEMs, and in particular two-wheeler OEMs”.
Source: ICRA Limited