SC ban on sale of BS III vehicles to affect 900,000 units, claim auto dealers

Auto dealers have petitioned Supreme Court against ban on sale of BS III vehicles from 1 April when India moves to Bharat Stage-IV norms


India is planning to move to Bharat Stage IV norms on fuel and fuel emissions from 1 April. Photo: HT
India is planning to move to Bharat Stage IV norms on fuel and fuel emissions from 1 April. Photo: HT

Mumbai: Automobile dealers have petitioned the Supreme Court against the ban on selling Bharat Stage III (BS III) vehicles beyond 31 March, citing financial and employment loss.

The Federation of Automobile Dealers Association, or Fada, moved an intervention petition in the Supreme Court Wednesday, which was admitted on Thursday, Fada president John K. Paul said. The move, Paul said, will impact 20,000 dealers and 900,000 vehicles.

India is planning to switch to BS IV fuel across the country by 1 April. Automakers are ready to comply with the new norms, but they are opposed to the Supreme Court appointed Environment Pollution (Prevention and Control) Authority (EPCA) over the cut-off date, since many finished products are with dealers. “All the dealers have BS III stock,” said Paul, pointing out that “they will be in deep trouble” if sale of models with older emission standards is stopped.

Dealers typically purchase stock offered by manufacturers and do not have a choice but to sell what is supplied to them irrespective of the emission standards; therefore, they should not be made to suffer in the event of issues such as the one currently facing the industry, said Nikunj Sanghi, a former president of the Fada. So far, the interests of the dealers have not been taken into consideration, he added.

Dealers tend to accumulate stocks of slow-moving models. Since the sale of vehicles primarily depends on demand and customer choice, the dealer has no way to dispose of old vehicles. As a result, the accumulated inventory could even go beyond a year, he said. “There is substantial stock of unsold BS III vehicles, including some of such stock received in recent times,” said Paul.

The ban on BS III vehicles, he claimed, will also affect jobs in sales and service, particularly for smaller dealers and sub-dealers.

The Supreme Court on Monday sought month-wise sales details of unsold BS III manufactured after December 2015. It has directed Society of Indian Automobile Manufacturers (Siam) to submit the data by 24 March.

To be sure, Siam members are divided on the issue. Earlier this month, supporting the EPCA, Bajaj Auto Ltd moved a petition seeking the Supreme Court’s intervention on the matter and demanded that both the manufacture and sale of BS III vehicles after 1 April should be stopped.

The switch to tighter emission norms is part of the auto fuel policy which envisages the auto industry to leapfrog to BS-VI by 2020. Amid rising pollution levels in India, which has the dubious reputation of being home to some of the world’s most polluted cities, transport minister had in January last year announced the decision to skip an intermediate level and move to BS-VI.

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