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.
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