Why are automakers worried about the BS 4 ban?

For the auto industry, the Supreme Court verdict yesterday banning BS-III vehicles was a huge blow. However, the industry had up to a year’s time to make the switch to a more environment-friendly, and fuel-efficient technology. Although the government’s I-told-you-so moment was a hard-hitting reality check for most automakers, barring maybe Bajaj Auto, tree-hugging friends cheered the verdict.  Here is an explainer which puts the entire crisis in perspective.

Supreme Court order

Supreme Court has banned sale and production of vehicles with BS-III engines after April 1. Only vehicles having engines of BS-IV can be sold and manufactured after April 1.

Which type of vehicles are affected?

Motorcycles, scooters, trucks, buses and three-wheelers have been affected by the order. All cars have already been upgraded to BS-IV norm

Is there a difference in cost between BS-III and BS-IV?

Yes, due usage of better technology in BS-IV vehicles, prices will rise by 2-3 percent

What does the ban mean to manufacturers?

Manufacturers have to liquidate their BS-III stock before end of March 31 as they will become obsolete after that.

What does it mean to customers?

Manufacturers are giving away huge discounts on BS-III vehicles to the tune of 5-15 percent. These are up to four times higher than normal discounting levels

What options do manufacturers have with the unsold BS-III inventory?

Liquidate stock with deep discounts, export the unsold stock or upgrade to BS-IV level.

What is the inventory size of BS-III vehicles?

There are around 450,000-500,000 two-wheelers, 90,000 commercial vehicles and 30,000 three-wheelers of unsold stock.

Can you buy BS-III now and register later?

Yes. BS-III vehicles can be bought till March 31 and be registered even after April 1.