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Ban on BS-III vehicles to have one-time impact: Mahindra

Following the Supreme Court’s BS-III ban, Mahindra says ramping up production of vehicles compliant with Bharat Stage-IV (BS-IV) emission standards


Mahindra says it respects Supreme Court’s ban on BS-III vehicles and shall fully abide by it. Photo: Bloomberg
Mahindra says it respects Supreme Court’s ban on BS-III vehicles and shall fully abide by it. Photo: Bloomberg

New Delhi: Commercial vehicles manufacturer Mahindra and Mahindra on Thursday said the Supreme Court ban on BS-III vehicles from 1 April will have a one-time impact on the company.

“This unexpected ruling (Supreme Court’s BS-III ban) has perplexed the industry and will have a one-time material impact even on the company,” Mahindra said in a statement.

The Mumbai-based CV maker said the law related to the implementation of Bharat Stage-IV emission standards for vehicles from 1 April, provided for allowing the sale and registration of BS-III vehicles manufactured prior to 1 April 2017 in the same manner as in such transitions over the last 12 years.

“But the Hon’ble Supreme Court has passed an order banning the sale of such BS-III vehicle stock and thus overriding the law in place, on the basis of which the company had planned its operations. This unexpected ruling has perplexed the industry and will have a one-time material impact even on the company,” Mahindra said.

The company respects the order of Supreme Court and shall fully abide by it, it added.

The automaker is working to ensure sustainability in all its operations and has been ramping up its BS-IV production for nationwide implementation from 1 April, Mahindra said.

Besides, it is working on various options to work within the framework provided by the Supreme Court order, even trying to liquidate as much of the company’s and its dealers’ BS-III inventory as possible by 31 March, it added.

“The company will make every attempt to minimise the one time impact of this order on the company’s financials,” Mahindra said.

The Supreme Court on Thursday banned sale and registration of vehicles with the older BS-III emission norms from 1 April, in a blow to auto firms saddled with a stock of over 8 lakh such vehicles valued up to an estimated Rs20,000 crore.

According to industry estimates, total value of vehicles impacted by ban is between Rs15,000 crore and Rs20,000 crore.

Around 6.71 lakh two-wheelers, 97,000 commercial vehicles and over 40,000 three-wheelers are affected by the ban.

On Thursday, shares of Mahindra and Mahindra Ltd closed nearly 1% higher at Rs1,280.40 while the benchmark index Sensex rose 0.39%, or 115.99 points, to end the day at 29,647.42.

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