Home >Auto News >Hero MotoCorp agrees to absorb unsold BS IV inventory


Hero MotoCorp Ltd, India’s largest two-wheeler manufacturer, assured its dealer principals on Saturday to absorb its entire unsold BS IV compliant inventory comprising of motorcycles and scooters, three people aware of the matter told Mint.

In video-conference meeting with all company dealer principals on Saturday, Pawan Munjal, chairman, Hero MotoCorp assured that the company will take care of the unsold BS IV stock.

“He made a powerful statement addressing his dealers in the meeting earlier today. The meeting saw 100% attendance of all Hero dealers. The chairman said that nobody should worry about the BS IV stock and that the teams will reach out to us soon," a Hero dealer said, requesting anonymity.

The details of how the company plans to absorb the unsold inventory and reimburse its channel partners are not yet known. As part of its contingency plan for the unsold BS IV stock, the company may consider exporting the same to other markets where they can legally sell it. Hero MotoCorp is yet to make official comments on the matter.

The Supreme Court on Friday relaxed the deadline for winding up the sales and registration of the BS IV stock by 31 March 2020 and has allowed sale of 10% of the unsold BS IV stock within 10 days of the end of the ongoing lockdown. This, however, does not apply for the Delhi NCR market.

The auto industry was earlier given a mandate to switch to sales and registration of only BS VI compliant vehicles in India from 1 April 2020.

Representatives of the Federation of Automobile Dealers Association, India (Fada) and Honda Motorcycle & Scooter India Pvt Ltd (HMSI) had filed a plea in the top court on liquidation of the unsold BS IV inventory in the wake of the country-wide lockdown imposed as a preventive measure to contain the spread of COVID-19.

Post the court's decision, auto dealers continue to be concerned about the remaining 90% of the unsold BSIV stock.

Fada, in its interlocutory application earlier, had appealed for an extension of the deadline by two months to liquidate all BS IV stock.

According to the industry body, the auto dealers are grappling with BS IV inventory worth 6,350 crore, which includes about 700,000 two-wheelers valued at 3,850 crore, 15,000 passenger vehicles worth 1,050 crore and 12,000 commercial vehicles worth 1,440 crore.

While Hero MotoCorp has stepped up to absorb back its entire unsold BSIV stock, it remains to be seen if other automakers will follow suit.

Fada has warned that if the stock is not liquidated via sales or absorbed back by the vehicle manufacturers, then several dealerships may be forced to close down their respective businesses.

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