By Q4 FY20-end, all companies will have to exhaust their BS-IV stocks as they will be rendered useless under the BS-VI regime that will commence from April 1, 2020
Mahindra & Mahindra (M&M), the country's second largest commercial vehicle maker, will start selling Bharat Stage VI (BS-VI) trucks to dealers by February, followed by retail in April.
By Q4 FY20-end, all companies will have to exhaust their BS-IV stocks as they will be rendered useless under the BS-VI regime that will commence from April 1, 2020.
M&M's Blazo range of heavy trucks will see a price increase of Rs 1.5-2 lakh, said a senior executive of the truck and bus division. Since BS-VI diesel won't be available before April 1, 2020 truck makers are reluctant to launch any BS-VI trucks. If a BS-VI truck uses BS-IV fuel, then it will permanently damage the vehicle's engine.
Rajan Wadhera, President - Automotive Sector, M&M, said, "If we don't see greenshoots, then the risk of producing BS-IV vehicles will be much higher. One cannot convert a BS-IV vehicle into a BS-VI one, it will be reduced to junk. If we earn a profit of Rs 1 lakh selling a truck, we incur a loss of Rs 25 lakh by not selling it. We are mindful of the inventory. People who think there will be a firesale are grossly mistaken."
During the previous shift from BS-III to BS-IV, the industry was forced to get rid of the older stock in just three days following an order from the Supreme Court that no sale of BS-III vehicles will be allowed after April 1, 2017.
The BS-III inventory was thus liquidated at discounts of up to 50 percent. The commercial vehicle (CV) market is already running huge discounts at present, but there has not been any revival in demand.
Since its launch in FY16, the Blazo range of heavy trucks, which was being sold at a Rs 2 lakh discount, is now being sold at a premium of Rs 75,000 compared to competition, M&M said. Similarly, the Furio range of intermediate commercial vehicles retails at a premium of Rs 1-1.25 lakh compared to its peers.
Vinod Sahay, CEO, Mahindra Truck and Bus Division, said, "Our newly launched ICV range, Furio has been acknowledged by customers. With the launch of 18 new variants in coming months, we hope to be a full range player in this segment."
Mahindra Truck and Bus has a network of 100 dealerships and 210 authorised service centres. The company claims to be the third largest player in the haulage segment, ahead of Volvo-Eicher and Bharat Benz, with a five percent share.
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First Published on Oct 14, 2019 01:56 pm