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Old 16th March 2017, 06:24   #1
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Default The predicament of 900,000 unsold BS-III vehicles

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Originally Posted by driving_smartly View Post
I wonder what would they do of these old stock indica's
Seven years down the line, a few Indian automakers are wondering what to do with their stock of - hold your breath - nine lakh BS3 vehicles currently available with them. The year 2016 would long be remembered as the year of NGT by automobile enthusiasts. In the midst of several bans and orders, a minor order passed by Environment Pollution Control Authority (EPCA) in October last may have escaped our notice.

The order mandated that only BS4 compliant vehicles could be registered after 01/04/2017. An earlier notification by the Central Government had set the the same deadline to end the manufacture of BS3 vehicles. These orders have left the manufacturers worried to the core as there is a confusion about the fate of already manufactured but yet to be sold BS3 vehicles. Whether these BS3 vehicles can be registered at all after 31/03/2017 is the moot point. An excerpt from a report published in TOI explains the matter:

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Just a fortnight before the registration of Bharat Stage 3 (BS3) vehicles is supposed to stop all over the country, a section of automobile industry is hoping that the deadline will be deferred or interpreted in a way that sales could continue after March 31 too. A group of automobile manufacturers claim to be saddled with an inventory of nearly nine lakh BS3 vehicles, worth over Rs 12,000 crore, which will go obsolete if the deadline is indeed enforced. According to the order of Supreme court mandated Environment Pollution Control Authority (EPCA), only BS4 compliant vehicles will be registered in the country from April this year.

The issue has divided the industry right through the middle. While a section of * mainly top passenger car makers like Hyundai and two wheeler company Bajaj Auto -are clear that sale of BS3 vehicles must discontinue after March 31, another group which includes Tata Motors, Hero MotoCorp and Mahindra and Mahindra (M&M) is pushing for the sale of the previous-generation vehicles to go on till inventory lasts. Those looking for the de ferment of the new norms are supported by industry lobby grouping Siam (Society of Indian Automobile Manufacturers). The confusion stems from the fact that while a 2015 notification from the Road Transport and Highways Ministry spoke about mandatory manufacturing of BS4 vehicles from April 2017, it made no mention on whether the sale of BS3 inventory would be allowed. In October last year EPCA directed vehicle manufacturers that no non-BS4 vehicle will be registered after April 1. Under section 5 of the Environment Protection Act, the EPCA has powers to issue orders on violation of various environmental standards.

The matter is scheduled to be heard by Supreme Court on March 20, while the National Green Tribunal (NGT) is also looking into the issue.
Full report at http://epaperbeta.timesofindia.com/A...16032017015013
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Old 17th March 2017, 09:57   #2
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Default re: The predicament of 900,000 unsold BS-III vehicles

Thanks for sharing, Dailydriver! Moving your post to a new thread.

I think a fair solution will be to mandate production of *only* BS-IV vehicles from April; BSIII vehicles produced prior to that can still be sold.
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Old 17th March 2017, 10:01   #3
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Default Re: The predicament of 900,000 unsold BS-III vehicles

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Originally Posted by dailydriver View Post
The order mandated that only BS4 compliant vehicles could be registered after 01/04/2017.
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Originally Posted by GTO View Post
I think a fair solution will be to mandate production of *only* BS-IV vehicles from April; BSIII vehicles produced prior to that can still be sold.
Going forward, such policies should mandate production itself. If production is controlled, then naturally registration is taken care of. If the production is mandated with sufficient notice - even upto a year, then the registration would automatically fall in place.
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Old 17th March 2017, 10:05   #4
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Default Re: The predicament of 900,000 unsold BS-III vehicles

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Originally Posted by GTO View Post
Thanks for sharing, Dailydriver! Moving your post to a new thread.

I think a fair solution will be to mandate production of *only* BS-IV vehicles from April; BSIII vehicles produced prior to that can still be sold.
This is similar to what was done when we went for the level upgrade in the past. There was a six month window where the older stuff could be sold. However, BS-III, is it not true that BS-III was asked to go to BS-IV some months ago. It must have been the stocks for 'unnotified cities'. So why is the inventory still there? If Industry was asleep then they must suffer.
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Old 17th March 2017, 10:10   #5
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Default Re: The predicament of 900,000 unsold BS-III vehicles

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Originally Posted by GTO View Post
Thanks for sharing, Dailydriver!
I think a fair solution will be to mandate production of *only* BS-IV vehicles from April; BSIII vehicles produced prior to that can still be sold.
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Originally Posted by condor View Post
Going forward, such policies should mandate production itself. If production is controlled, then naturally registration is taken care of.
If a company, despite knowing the deadline for sale of BS-III vehicles, still kept producing and shipping those to their dealerships, then that is just 'bad planning'

IMHO, they can still retro-fit the components that are required to make the vehicles BS-IV compliant - I know this, working in the Auto industry.

Of course, this would be time consuming, and also a laborious task to do - that too since the quality aspect needs to be maintained on fully built vehicles... But, there is a price to pay when you make a terrible mistake during the planning phase.
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Old 17th March 2017, 10:23   #6
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Default Re: The predicament of 900,000 unsold BS-III vehicles

They had atleast 5 months to dispose off the BS 3 variants and they didn't bother? This is extreme optimism that "if we lobby for doing wrong things, we can force to bend rules". I remember Rajiv Bajaj being vehement about sticking to the current plan - the guys who have invested and put effort to keep up the deadlines will be made to look like fools, if the other manufacturers are exempted.

Else, give the BS 4 ready manufacturers some subsidy / tax exemptions for every single product sold till the exemption for other parties, along with an additional fine for those who do not stick to the deadlines. It's time rules are made to follow.

Last edited by swiftnfurious : 17th March 2017 at 10:24.
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Old 17th March 2017, 10:51   #7
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Default Re: The predicament of 900,000 unsold BS-III vehicles

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If a company, despite knowing the deadline for sale of BS-III vehicles, still kept producing and shipping those to their dealerships, then that is just 'bad planning'.
More intentional than bad planning, IMO. Intentional because BS-3 would cost lesser to produce. And many customers dont want to spend the extra for BS-4 vehicles.
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Old 17th March 2017, 11:04   #8
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Default Re: The predicament of 900,000 unsold BS-III vehicles

One possible solution could be to permit Tier-II/III cities and other towns to sell them till BS-III vehicle stocks are exhausted. After all, this has been done before.

Also, I am sure, the automotive lobby won't let themselves sit on such a fat stockpile of unsold, non-future compliant vehicles. They will get the government to "interfere" and get some relaxation in this as well, despite it being a SC order.

Won't be the first time when a rule is "bent" to conveniently suit some biggie companies and their top honchos.
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Old 17th March 2017, 11:28   #9
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Default Re: The predicament of 900,000 unsold BS-III vehicles

I am not sure what to make of this, premium European manufacturers are having to downgrade their engines to make sure their engines run on our latest grades of old generation poor quality fuel, Legislation without sparing a thought about existing infrastructure is a disastrous way to go about trying to save the planet

The new Mercedes Benz 4 cylinder is being modified to run on what passes for diesel in this county. Audi has downgraded the notorious 2.0 tdi of dieselgate fame to meet our upcoming regulations, so much for being tough on pollution. The manufacturers should make their vehicles meet the new norms and take the hit, or they'll be asking for better-than-kerosene emissions norms next.
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Old 17th March 2017, 11:41   #10
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Default Re: The predicament of 900,000 unsold BS-III vehicles

Most of this unsold stock must be two wheelers I am guessing. And I agree with the sentiment that they had enough time on their hands since October to dispose off the unsold stock. After all look at our monthly sales charts for both 4 wheelers and 2 wheelers. They shouldn't be standing on an unsold stock of 9L units if they had shown the zeal. Having said that, is it possible that Demonetization would have played a part too here since fewer bookings must have been done in November and December.
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Old 17th March 2017, 11:46   #11
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Default Re: The predicament of 900,000 unsold BS-III vehicles

The fact that such massive unsold inventory of BS III vehicles are still lying in the warehouses of manufacturers, smacks of arrogance on the part of these biggies who felt that, they can circumvent the law and get the Government to their rescue, sighting losses on such stocks. The SIAM rather than backing such manufacturers who did not see the writing on the wall, should support the manufacturers who had the courage to switch to newer emission norms.

Studies suggest that vehicular pollution is one of the key contributors to the high levels of pollution in Indian cities. A recent study on Delhi’s pollution showed that 28% of the pollution is due to vehicular emissions. The shift to BS IV will require cleaner fuel quality and improvements in engines and exhausts like fitting the vehicles with diesel particulate filter (DPF), selective catalytic reduction (SCR) etc. Hence this will reduce the vehicular pollution therby increasing the air quality.

The demand of Auto Makers in providing additional timeframe for disposing off the unsold inventory is unfair and it reflects poorly on the industry’s commitment for improving air quality. The overall demand for private vehicles is quite good in India and, therefore, any increase in cost that affects all producers equally will not significantly impact industry-level sales in the long run. The vehicular pollution, significantly worsens the health of all Indians therefore cannot be taken lightly on the cost of econoic development. Also, being at the frontline of global standards, will improve the ability of Indian automobile sector to compete globally.

GTO's signautre has clearly summed up, "It's foresight that really counts" and Bajaj and few other manufacturers had this foresight and now they are having relaxed time.

Going forward, the Government of India should remain firm and committed on auto emission norms and the recent media reports suggesting that the Government is inclined to leap forward to BS VI norms from 2020. With the thumping mandate received in recently concluded assembly elections in the states, I feel time is ripe for BOLD initiatives.
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Old 17th March 2017, 12:02   #12
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Default Re: The predicament of 900,000 unsold BS-III vehicles

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Originally Posted by condor View Post
More intentional than bad planning, IMO. Intentional because BS-3 would cost lesser to produce. And many customers dont want to spend the extra for BS-4 vehicles.
BS-4 diesel engines cost just 10% more than BS-3 engines. Got this from annual report of a company called Greaves Cotton, that supplies diesel engines to Piaggio, Mahindra, Tata etc for 3 wheelers & small commercial 4 wheelers (Eg: Tata Ace Zip).

The predicament of 900,000 unsold BS-III vehicles-435ccengine.jpg

I'm pretty sure Greaves Cotton has an attractive buyback or exchange scheme for their corporate customers who are stuck with unsold BS-3 engines

1) After all, you don't have to junk the vehicles - you just have to do an engine transplant.
2) The manufacturers could export to the entire lot to countries that have lower emission standards. Exports constitute 10 to 30% of revenues of most Indian automobile manufacturers.

Last edited by smartcat : 17th March 2017 at 12:13.
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Old 18th March 2017, 23:54   #13
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Default Re: The predicament of 900,000 unsold BS-III vehicles

Its similar to unauthorised layouts. Grab a land, make a hutment or house. Then the slum area with similar hutments in the thousands will suddenly grow into a huge colony. They start agitating to regularise their land.

The authorities yield, the area is regularised, gets electricity, water supply and the residents become voters and ultimately Aadhar card holders.
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Old 19th March 2017, 00:31   #14
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Default Re: The predicament of 900,000 unsold BS-III vehicles

Penalise them.

If they're spared from penalty, it'd send a very very wrong message for industries across all sectors with respect to Environment Compliance norms.

A heavy penalty will not only fill the treasury but more importantly - establish authority upon automakers who've benefitted far too long by exploiting the low standards set by Indian laws, (which is what gives people like R C Bhargava the guts to say the unspeakable).

Not imposing a penalty will send the wrong message about whom this government allegedly works for - the Ultra Rich.

I'm counting on our Prime Minister to look into this with his commitment to promote industries with less polluting processes & "Green India".

Fingers crossed. Let's see!
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Old 19th March 2017, 01:27   #15
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Default Re: The predicament of 900,000 unsold BS-III vehicles

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Its similar to unauthorised layouts. Grab a land, make a hutment or house. Then the slum area with similar hutments in the thousands will suddenly grow into a huge colony. They start agitating to regularise their land.

The authorities yield, the area is regularised, gets electricity, water supply and the residents become voters and ultimately Aadhar card holders.
So, how exactly do you think civilization exactly came into being?

Random people go to random places and claim it to be theirs. I am sure that's what all of our forefathers did.
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