Policy uncertainties over BS IV vehicle sales a worry for firms
The industry does not want a repeat of the situation when BS IV was introduced, Siam’s Vishnu Mathur said
New Delhi: Automakers in India are bracing for policy uncertainties with the petroleum and transport ministries at loggerheads over when to stop the manufacturing and sales of vehicles that meet Bharat Stage IV emission norms.The ambiguity is impacting local automakers’ ability to take business decisions as more stringent BS VI emission norms are set to kick in from 1 April 2020.
The transport ministry said in a February notification that automakers would receive three months beyond April 2020, to clear their vehicle inventory. The petroleum ministry, however, informed the Supreme Court on Monday that the sale of vehicles which are not compliant with BS VI norms should not be allowed beyond 31 March 2020. Three industry executives told Mint that auto manufacturers want the government to stick to the notification issued by the transport ministry and clarify on the petroleum ministry’s stand.
“The industry does not want a repeat of the situation when BS IV was introduced. We will adhere to the time frame notified by the transport ministry and hope that it will not be changed,” said Vishnu Mathur, director general, Society of Indian Automobile Manufacturers (Siam).
A senior executive of a leading automaker said car makers have never violated any norm, but it is always convenient if the government specifies a time frame in advance. “The recent submission by the petroleum ministry has created a lot of uncertainty among manufacturers. This February decision was taken after an inter-ministerial meeting so we assumed that all the ministries are on the same page. Now, one ministry is contradicting the other before the Supreme Court, when it could have been deliberated outside,” said another senior executive, requesting anonymity. On 28 March 2017, the Supreme Court had banned the sale of BS III vehicles, barely three days before the April 1 roll out of BS IV emission norms. The apex court’s decision had a huge impact on companies, with dealers offering deep discounts to clear stocks of BS III vehicles within three days. Industry insiders fear that contradictory views of the two ministries will not only impact the manufacturers, but also parts makers who operate on low margins.
“The component industry is not a strong as the OEMs and depends on the vehicle manufacturers for guidance. If a change happens suddenly, they will lose financially, which will take a lot of time to recover. More than the car makers, it is the component manufacturers who will be impacted,” said the third executive, requesting anonymity.
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