The federation of Automobile Dealers Association said that once BS-VI norms are implemented from April 1, they’ll be stuck with previous inventory.

Car dealers may shut shop if they cant sell older vehicles after April 1 FADA
Money Automobile Friday, December 20, 2019 - 09:01

The fate of the car dealers in India once it becomes mandatory for them to sell vehicles conforming to the BS-VI emission norms is causing worry to them. Whatever inventory the dealers will be struck with, of the older versions, can sound the death knell for most of them, says the Federation of Automobile Dealers Associations (FADA) as per a Bloomberg report.

In the Indian context, the car manufacturers are expected to start making their models with the BS-VI emission norms from February 2020. The dealers may start receiving the new vehicles around March 2020. Now what if the dealers cannot liquidate the stocks they are holding of the older vehicles till that time? These would have been paid for by them and if they are not permitted to sell them as per the orders of the court, they will have to bear the losses. There has to be some clarity on this FADA says.

These orders on start of selling the BS-VI cars from April 1, 2020 have been issued by the Supreme Court of India. Will the court be approached again to review its orders?  What about the customers; will they be clear if it is acceptable to buy a non-BS-VI vehicle?

Many people in the automobile trade attribute this to the overall slowdown in the car sales being consistently reported over the past few months. Dealers have been holding back their orders fearing this very same situation being discussed now.

The industry and the government may have to come up with some pragmatic solutions to end this confusion. Can the deadline be extended beyond April 2020? However, that may not be as simple as that. It is difficult to imagine the situation if the dealers were to be holding inventory of both BS-VI and BS-IV vehicles and they may still face the same fate of not being able to sell the older ones.   

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