homeauto NewsHere’s why FADA has requested the SC to allow them sell leftover BS IV inventory post April 1
Here’s why FADA has requested the SC to allow them sell leftover BS-IV inventory post April 1
Now that the fuel is going to be available only on April 1, and diesel vehicles can only run on BS-VI fuel, so it is very difficult for us to stock vehicles and not sell them, said Ashish Harsharaj Kale, president of Federation of Automobile Dealers Associations (FADA).
The auto dealers association has expressed their concern at being unable to liquidate BS-IV stock before the April 2020 deadline. They have requested the Supreme Court (SC) to allow dealers to sell and register unsold BS-IV inventory purchased before March 1, 2020.
Ashish Harsharaj Kale, president of Federation of Automobile Dealers Associations (FADA) said it is not just the companies but even the dealers are currently at an inventory of 30-40 days. "The other part is that with fuel availability now being clear that it is going to be available only from April 1, pan India, I think most of the manufacturers have planned 100 percent production shift only by end of February or first week of March. So dealers will continue to buy BS-IV vehicles. That gives us a very short window of just the month of March to liquidate the entire inventory and that is why we have approached the SC to allow us to sell – if there are any vehicles which are left on March 31,” he said in an interview with CNBC-TV18.
When asked if they really expected relief from SC, he said, “It was not very clear by when the fuel will be available across the country. Our expectation was that the timeline would be a bit earlier than the deadline given by the SC so that the transition is smooth. Now that the fuel is going to be available only on April 1, and diesel vehicles can only run on BS-VI fuel, so it is very difficult for us to stock vehicles and not sell them. So we will have to do a transition of BS-IV, BS-VI in the month of February and March and that is the reason why we have gone to the court now. The transition window is very small,” he added.
Speaking about the companies which have large inventories, Kale said, “For the manufacturers Society of Indian Automobile Manufacturers (SIAM) would be better placed to talk about the inventory. For dealer inventory, as I have already said that we are anywhere between 30 and 40 days. The passenger vehicle (PV) inventory is at 30 days but both two-wheeler and commercial vehicle (CV) is at 40 days.”
When asked about demand situation, he said the inquiry levels in December have been good but conversions have just started. So, with regards to actual sales, we will be in a better position to tell you in the last week of December.
"December is a very big month for PV because of the year-end combined discounts that come in and for two-wheelers and CVs not so much but we are seeing very good enquiry level even in two-wheelers. Let us see how the conversion goes. As of now we have robust inquiry levels,” he further mentioned.
In terms of price hikes due to BS-VI transition, he said “Two-wheelers – few vehicles have already launched and the cost difference is between 10 percent and 13 percent. In CVs it is anticipated to be between 12 percent and 14 percent, although none of the manufacturers have as of now come up with a BS-VI pricing, two-wheelers it has already been launched.”
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