One of the unintended victims of the coronavirus lockdown has been the body of automobile dealers in the country. The automobile manufacturers themselves have now stepped forward and assured the dealers of support, as per a report in the Economic Times. Leading the pack is Hero MotoCorp, the motorcycle major. The company’s 200,000 vehicles are reportedly the largest out of the total 700,000 two-wheelers struck with the dealers across the country. Pawan Munjal, the Chairman of Hero MotoCorp held a video conference with the company’s dealers and assured them that no dealer would be made to suffer. His first offer is to take back all the BS-IV stock lying with the dealers in the Delhi-NCR region since the Supreme Court has kept this region out of its 10-day extension to sell the old vehicles. It is not clear what plans Munjal has for the dealers in the rest of the country. Some relief on account of interest on the inventory being held during this period may also be reimbursed.
Most other companies have also expressed their support to their dealers.
Toyota Kirloskar Motors is not much worried about the BS-IV stocks, it is reported. German auto maker Volkswagen has put in place an elaborate system of evaluation of the dealers on various parameters and while the benefit on the old inventory may be passed on now, there may be detailed audits conducted at the dealer premises before they are confirmed. Those dealers who don’t score 80% or more in this evaluation, may find the benefits being reversed. These parameters include manpower, quality etc.
Others like Renault are considering monetary support to cushion the impact the dealers will have on both the 21-day lockdown as well as the inability to sell the old BS-IV vehicles. Fiat Chrysler, for example, has hiked the dealer incentive on the Compass model to ₹20,000 from ₹10,000.
The automobile dealers had a deadline to clear off their BS-IV inventory of vehicles before March 31, 2020 since as per the orders of the Supreme Court of India, all new vehicles sold and registered after April 1, 2020 need to be complying with the BS-VI emission norms. The 21-day lockdown due to the coronavirus has put paid to their hopes of clearing at least part of the old stocks. The Federation of Automobile Dealers Associations (FADA) had sought some relief from Supreme Court but the apex court has allowed them just 10 days after the lockdown is lifted to clear the inventory which FADA claims is worth ₹6,000 crore.
Apart from the 700,000 two-wheelers, there are 15,000 passenger cars and 12,000 commercial vehicles of BS-IV lying as inventory with the automobile dealers, according to FADA's petition. There are vehicles sold but not registered as well, but the Supreme Court had relaxed the terms for their registration in its last order.