COVID-19 fallout: Have a heart for dealers, Hero Motocorp urges peers

Honda Motorcycle and Scooter India (HMSI) too have moved the apex court seeking  an extension.  But sources at Bajaj Auto, TVS and Royal Enfield said they had minimal or no BS-IV inventory and did not want an extension.  Basically, they would be at a disadvantage from cheaper BS-IV stock in the market after March 31.

Now, Hero MotorCorp has urged the industry to show compassion towards dealer partners.

Speaking to CNBC-TV18, Hero MotoCorp spokesperson Bharatendu Kabi said, “In normal course our dealers could have easily sold the remaining BSIV stock during the balance period in March before the BSIV deadline. In fact our retail sales had been at double digits this month before the CoVid-19 disruptions set in.”

He said Hero MotoCorp stopped production of BS-IV models in a phased manner starting with 50 SKUs in December itself and all remaining models of BSIV by Feb 19.

“We stand with the dealer fraternity who have also represented the same matter through FADA. The matter is sub-judice and we do not want to make any further comments at this stage. This is the time that the dealer community which is the backbone of the two wheeler industry needs support and compassion.”

Hero Motocorp's plea is expected to come up for hearing on March 27.

YS Guleria, Senior Vice President, HMSI , had a similar view as Kabi.

"This (the plea for extension of deadline) is basically on behalf of our dealers.," he told CNBC-TV18.

"HMSI launched it's first BSVI product in September last year and we have dispatched over 6.5 lakh BS-VI products already. We were confident of liquidating all BSIV stock by 25th March. However, due to CoVid-19, there have been lockdowns and sealing of borders. Despite our best efforts we will not be able to liquidate BSIV stock by March 31, as almost 90 percent of our dealerships are closed," he said.

The central government's move to strictly enforce lockdown measures, especially in 75 districts with CoVid-19 cases has sent dealers into panic mode.

Speaking to CNBC-TV18, Ashish Kale, President, Federation of Automobile Dealers Association told CNBC-TV18 that dealers were saddled with BS-IV inventory worth Rs 6400 crore and that over 12000 dealer outlets were closed because of the lockdown.

FADA has already requested the Supreme Court for an extension of the BS-IV deadline and even sought assurance from vehicle makers body SIAM, requesting them to take back unsold BS-IV stock.

India’s largest car maker Maruti Suzuki has not said anything specific on the impact of the lockdown on its dealerships. “The scenario is evolving and it is difficult to give a number”, said the company.

CNBC-TV18 has learnt that there could be 6-7 lakh BS-IV two wheelers still in stock with various dealerships and liquidating them before March 31 is going to be a major challenge.