[rk206]

Originally Posted by GTO

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.

Logically speaking, this is the only way forward.

Originally Posted by sgiitk

It must have been the stocks for 'unnotified cities'. So why is the inventory still there? If Industry was asleep then they must suffer.

The Automotive industry wasn't and isn't asleep. I don't know of any automotive OEM who doesn't have BS4 ready vehicles.

Originally Posted by aravind.anand

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'

Since you work in the Automotive industry, you will also know that these norms have been very seriously paid attention to and acted upon. However, one also has to think of:
1. Potential sales or rather the loss of potential sales if you don't produce enough.
2. Moreover, you would also know that each company has certain models (their bread and butter models, so to speak) which move easily while the other models don't. Each month's production planning is a tedious task full of risks. You cannot mitigate all of it, you can only be aware of it and make a decision accordingly.
3. Today's industry offers a ton of options. Whilst they remain small for a passenger cars (3-4 variants with few optional) , the number of variants for the commercial industry is absolutely mind boggling. This plays a huge role in inventory pile up- more so for the commercial industry.
4. Retro fitment/ Upgrading of vehicles isn't as easy as it sounds. If you have to ensure retrofitment for a BS3 to BS4 vehicles - it can include any one or all of the below
Engine Cooling System (Intercoolers, Radiator)
Exhaust System
Axle Ratios
Turbochargers
Air Intake Sytems
In addition, if there are structural changes to the vehicle in order to accommodate additional parts (e.g. a larger engine compartment); then one would need to cut and weld- this wouldn't do down well with any customer.
Most importantly, the OEM would need to have a homologation certificate for the configuration post changes (may or may not be available)

Originally Posted by swiftnfurious

"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.

Reiterating here, There isn't a single Auto OEM who has not invested in BS4 technology and vehicles.
Regarding the lobbying, the following is a screenshot of a press release from the SIAM website.

The same can be read here

Originally Posted by condor

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.

The lesser cost of producing BS3 is irrelevant from a OEM point of view since it is just material cost- this gets passed on to the customer when they buy the vehicle. So the real question is, how many customers have bought the vehicle in BS3 version when the BS4 is available from the same manufacturer.

Originally Posted by RavenAvi

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.

Again, please see the SIAM Press Release. Whilst no one is really privy to the lobbying that goes on - I pay some credibility to what the person says himself rather than somebody else saying something on their behalf.

Everybody interferes in everything - the government also interfered in the sales of automotive industry with the demonetization move . Most OEMs had to stop production for atleast 2-3 weeks but you didn't hear anyone complain about it. So why isolate them now and point fingers at them without paying the slightest of thoughts to the difficulty they are facing.

Originally Posted by avira_tk

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 OEMs don't control the fuel being sold in the country- the PSU's do. Again, the PSU's can only sell what the customer is willing to buy. Imagine the headlines tomorrow if only better quality fuel is sold at higher price. Nobody is going to think twice before writing "Fuel Prices raised by 5 Rs- Doomsday"

Originally Posted by drmohitg

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.

The demonetization certainly played a part but again lets not get carried away. There's always risk of expected sales vs actual sales and no OEM is ever going to complain about that risk. It can happen to the best of products ( a super product not selling well ) and the worst of products (a bad product doing well).

Also, Please refer to phamilyman's post with respect to the number of days the inventory would last for at normal sales. The numbers are not very big at all.

Originally Posted by MDED

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.

1. No OEM likes finished goods sitting in warehouses-PERIOD. It's blocked money.
2. Please see SIAM Press release above.
3. An automobile is a machine- you use it as per your prudence. How many Indians switch off their vehicles at junctions to reduce pollution?- doesn't happen often enough in my opinion. If automobiles contribute 28% to the pollution- what steps are being taken for the other 72% contributors- haven't seen any other plans in the media atleast.

Originally Posted by smartcat

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).

1. There's nothing called "just" an engine transplant. Its hard work , costs time.
2. Most export nations with lower emission standards ( Africa if I'm not mistaken) are LHD so its irrelevant.
3. The whole planet is affected by the emissions , so sending our BS3 vehicles to other nations doesn't change the emission effect overall.

Originally Posted by anjan_c2007

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.

I didn't understand this earlier but having re-read it 3-4 times (I am slow), I understand you're comparing Auto OEMs to unauthorized plans /illegal settlement or people. Don't even know what to say to this except that change isn't easy, the Auto industry has complied. It's an operational issue of implementation and ironing out the creases.

Originally Posted by GrammarNazi

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.

Again, all Auto OEMs have BS4 products. If the customers chooses to buy BS3 product because its cheaper - is it really the OEMs fault?

Penalise them for what ? Manufacturing BS3 vehicles when you can sell BS3 vehicles? ( I'm really really stupid and I don't understand this)

The law simply states that post 31st March - you cannot manufacture BS3 vehicles but its not illegal to manufacture them or at any point in the past.
As far as the registration goes, that is not done by the OEM. It's done by the dealer on customer's behalf. The only thing an OEM has to do with the RTO is obtain a Transport Commissioner approval -this essentially means that vehicle complies to the norms of the State.

Originally Posted by Hayek

This is a classic case of some manufacturers being two clever by half, and no leeway should be given to them. BS4 norms were introduced in the metro cities in April 2010, and were scheduled to go national by April 2015. They have already been delayed by 2 years (and by 12 years compared to their introduction in Europe). Manufacturers have had ample time to plan and must not be allowed to get away with playing with the lives of Indians by building huge inventories before the change over and continuing to register these junk vehicles after April 1.

Saying that they were implemented 12 years ago in Europe is apples and oranges. Different countries, different conditions, different infrastructure, different priorities. Until not so recent past and even now, priority is food and shelter in India, Automobiles are secondary . This is not to say that we shouldn't implement more strict emission norms; Just merely that expecting them to be implemented at the same time is misplaced expectation.

Originally Posted by H_Dogg72

Screw them. This lobby thing is always a mess. We need a better environment. They can do whatever they want, but should not be allowed to sell these vehicles.

Yes, screw them. Because they're selling and innocent poor people are buying without knowing anything and have no liability or responsibility whatsoever.

Originally Posted by dailydriver

I am almost certain that if the judiciary doesn't come out with strict and specific instructions to scrap all nine lakh engines, the manufacturers will invariably find ways to hoodwink the rule of law.

OEMs cannot hoodwink the rule of law, they are responsible for manufacturing and they are not to manufacture BS3 post 31st March. Haven't heard of a single OEM not committed to manufacturing BS4 vehicles post the deadline.

If registration isn't allowed, customer/dealer can't- simple.

Originally Posted by phamilyman

Having 2.5/16 days of BS3 products is no crime. It is clear the passenger vehicle manufacturers took the deadline seriously and in fact should be rewarded for good compliance with the govt's agenda, compared to their CV brethren.

Thanks for some common sense. Really, just thanks. Will just add a couple of points later on.

Originally Posted by haria

It is highly unlikely that the manufacturers will decide to junk this whole inventory. Possibly, it will find a loop hole and off load them into B, C class cities/towns.

There isn't a loophole. Either there's an extension granted by the Govt for registration (on which i'm sure somebody will go to the Supreme Court) and or not granting the extension . It's really that simple and its PAN India - there isn't a question of Tier 2 or 3 cities.

The question isn't whether the OEMs are sensitive to this law, its also a question of whether customer is sensitive to the environmental issue. The OEMs are ready with BS4 vehicles, are the customers willing to pay?

Originally Posted by abhishek46

9Lakh vehicles!!
What were they doing?

Apparently, they were doing nothing Now, they are working on how to circumvent BS6

Look at you, you already found a loophole .

Originally Posted by PetroTurbo

As per TOI, The ban is ONLY on manufacturing of the BS-III engines, not on selling the BS-III engines. The transistion is same as the BS-II to BS-III engine during 2001

Not Engines, Vehicles . Vehicles have to comply to BS4 norms.

Originally Posted by PetroTurbo

Good one dailydriver

But, what I understand from the press release is that (highlighted below)

There isn't any ambiguity on one aspect- No BS3 vehicle can be manufactured post 31st March.


I sincerely apologize to anybody who may have been offended by my replies. There are further points to add as well.

1. Any OEM is part of the ecosystem in Automotive Industry but there are other stakeholders as well. The government certainly, the fuel suppliers and the biggest one of all, customer.

2. An OEM builds to cater to demand of the customer and till the time customer wants to buy, the OEM will build (until and unless not allowed to do so legally). No business will give up revenue/profit- i think that much is pretty much common sense stuff.

3. As much as this predicament appears to be only OEM's fault. There are other factors as well - varying demand (seasonal, incidental impact ) and so on so forth. Planning can only do so much- the reality is another matter altogether

4. Selling a BS4 vehicle will not ensure BS4 compliant emissions from the vehicle alone. BS4 fuel also has to be available and used on the vehicle. As far as I know, very few parts of our nation apart from our Metros/Tier 1 cities carry BS4 fuel. Haven't seen anybody create a fuss about that.

5. Auto OEMs are obsessed (and HOW) with inventory control even with raw material/components. They will go to great lengths to ensure minimal inventory because its inventory=blocked money.

6. Unsold stock of vehicles = Even More Stuck Money. Even if they sell it at a discount - its a loss against their expected earnings. No OEM likes this. No business anywhere in the world likes this.

7. Moreover, I had a hard time taking TOI values for Inventory cost so I cross checked just to confirm the numbers and ran a few cases. Couple of observations which echo phamilyman's thoughts:



a. No crime in terms for Pax and 2 wheelers - carrying 12-13 days inventory is okay.
b. The 3 Wheeler market is actually down in percentage terms- can explain the 26 days inventory plus also the below listed reason.
c. Commercial Vehicles - 33 days - this led me to think why would any OEM be a fool to carry so much inventory? Possible reason is turnaround time for sales and finance. See, For Passenger & 2 Wheelers- Loan process is mostly a formality after seeing your salary slip/income . No so much for commercial vehicles - since the value is higher and they are (mostly) small businesses asking for loans. Possible but cannot explain more.
d. I was more concerned with the Inventory titled at 12000 Cr so decided to do a bit of simple maths. Closer to 15000 Cr by mine so i guess its okay (validated my thinking more than anything else.)

12000-15000 Crores!!!!

Please ask yourself the following simple questions -

I. When was the last time you let go of Thousands of your hard earned money?

II. If you were about to lose your money, wouldn't you at least try to salvage most of it ?

If the answer to II is that you'd give it your best , please don't slag the auto industry - they are doing simply what you'd do (if they are lobbying, that is).

To answer the OP's question ,If there's no extension with respect to Registration of BS3 from 1st April
- OEMs will lose money
- Vehicles ought to be stripped for usable parts and scrapped.

[arakhanna]

I personally I have an issue with shifting goal posts. As per the previous changeover in emission norms from BS 2 to BS 3 and from Sept,2016 when ABS was made mandatory for CV's we saw that vehicles manufactured before the cut off date were allowed to be sold post the period. What has changed now?

This time around the situation seems to be changed due to politics according to me. Bajaj Auto is the prime mover in this. The key players to be impacted if banned or charged extra for BS 3 vehicles are Tata Motors and Ashok Leyland in CV's and Hero in 2W.

To gain market share is the key logic to impact Hero, hence the move is obvious. The reason for Tata Motors and Leyland is less so. Its actually payback for RE60 being blocked by other manufactures due to lobbying. It is stuck in policy logjam due to safety norms not being met for 4W.

This is my personal opinion in reading of the matter. People and pollution is not the prime motivational driver.

[drnilswap]

Quoting the excerpts from a TOI news article:

Auto manufacturers may have to contribute to the government coffer for selling BS-III vehicles after March 31, when BS -IV compliance comes into into force.

Senior advocates, assisting the court as amicus curiae, told the bench that the companies were well aware that BSIV norm would kick in from April 1 but they kept manufacturing vehicles with older technology . They urged the court to ban manufacture and sale of BS-III vehicles as the Centre had spent Rs 18000-20000 crore for producing cleaner fuel.

The manufacturers contended that companies were allowed to sell their stocks with old emission norms when new technology was brought in force twice in past. They said on the previous two occasions when the industry switched to BSII and BS-III in 2005 and 2010, older vehicles were allowed to be registered till the stocks lasted and only manufacturing of vehicles with older emission standards was not allowed.

I too, think this a pragmatic solution going forward. No sensible business would have wanted to err on negative side of the calculated expected demand while manufacturing. So I believe benefit of doubt be given to them. And the levy would ensure they don't go overboard when the shift occurs the next time. For now, we have a lot of poorly maintained (irrespective of the age) vehicles running on our roads polluting our environment. These vehicles are the ones that deserve all the attention of the authorities.

http://timesofindia.indiatimes.com/i...w/57821386.cms

[dailydriver]

Originally Posted by drnilswap

Quoting the excerpts from a TOI news article

Thank you very much for drawing attention to the news report. Allow me to quote a very interesting paragraph from the same article which reflects the muddle that we are in; unable to decide what to do next.

The court said there are three options available--to take a drastic step to ban registration of vehicles or allow its registration but ban plying of such vehicles from major cities or ask the companies to pay some additional cost for creating health hazards and reimburse the Centre which spent enormous money in upgrading fuel standard. The court said it would take a call on the issue on March 27.

Let's see what transpires on March 27.

[MDED]

The Central Government has come out in support of vehicle manufacturers arguing that the April 1, 2017 deadline is for manufacturing and not for sales of vehicles. As per the news reports on various websites, it looks that the GOI will be supporting the vehicle makers in the Supreme Court. The SC shall be hearing the case on Tuesday 28.03.2017as well.

As per the reports vehicles totaling to 8,24,000 worth Rs 12 crores are lying unsold and the Government has contended that these might become obsolete and will turn into junk if the apex court rules that such vehicles can't be registered. Last Friday, a SC bench comprising Justices Madan B Lokur and Deepak Gupta said, that the Government has spent crores of rupees in developing BS IV compliant MS& HSD and it will be a farce if the old BS III vehicles are allowed to be registered.

The court was also of the opinion of slapping of additional cess on BS III vehicles, thereby discouraging the sale and ensuring that the cess will bring the BS IV vehicles on par with the old generation vehicle, resulting in the decision of the customer to decide on which vehicle to opt for.

Bajaj, Toyota and Daimler have requested the court not to allow the sale of BS III vehicle, as these manufacturers have already put in the required technological advancements to ensure manufacture of BS IV vehicles.
http://www.moneycontrol.com/news/bus...y-2247479.html

[jaibir]

The EPCA is supposed to be specifically for NCR. They sent notices to RTOs across India claiming BS3 vehicles registered after 1 April "might" drive through NCR. The government department said rules remain unchanged from previous emission transitions, implying that BS3 products could be sold after 1 April but not manufactured.

Given the divergent views from different regulatory bodies, cant really blame manufacturers for sticking to what has been accepted practise from past changeovers. There is a lot of channel stock, particularly in two wheelers. Companies need to ensure that there is no dealer stock for BS3 vehicles if the regulation focuses on registration - something that is much tougher to do than just a production cutoff. If the 1 April registration cutoff had been indicated a year in advance and with certainty, I suspect the changeover would have been smoother and this confusion could have been avoided.

[Turbanator]

Looks manufacturers are indeed getting into problem - here's the message from a Honda dealer



Honda 2Wheelers has today announced the ‘March Dhamaka’ offer for 5 days!

Honda customers can now enjoy BIG SAVINGS UP TO RS. 10,000 on purchase of Honda’s BS-III models anywhere in India.

Details of the ‘March Dhamaka’ offer are as below:

- Big cash-back of Rs. 5,000 on any Honda’s BS-III compliant models.

- Bigger cash-back of Rs. 10,000 on BS-III version of CBR 250R and CBR 150R.

- Offer applicable only on Honda’s all BS-III motorcycles & automatic scooters.

- The limited period offer is valid only till 31st March 2017.

[slicvic]

Originally Posted by Turbanator

- Big cash-back of Rs. 5,000 on any Honda’s BS-III compliant models.

- Bigger cash-back of Rs. 10,000 on BS-III version of CBR 250R and CBR 150R.

- Offer applicable only on Honda’s all BS-III motorcycles & automatic scooters.

- The limited period offer is valid only till 31st March 2017.

This is the way to go. All manufacturers should cut their profits and sell the vehicles rather than requesting for an extension.

[//M]

The verdict on the unsold BS3 vehicles will be declared tomorrow, 29th March 2017.


Source: Money Control

Supreme Court reserves its order in emission norms case; verdict on Mar 29

[simplyself]

A two wheeler dealer said they had notified the government of the stocks of BS 3 compliant vehicles and there wouldn't be any problem in registering such vehicles after April first.

They are offering considerable discounts on the BS 3 ones.

Their BS 4 pricing is a few hundred rupees above the BS 3 ones.

Manufacturers are well aware of the impending deadline. They should have long ago stopped the production of BS 3 ones.

[RaghuVis]

Flash News!

Supreme Court orders that BS-III vehicles will not be sold from 1 April onward. Rejects plea by govt and automakers to let them sell existing stock.

[SandyX]

Supreme Court bans sale of BS-III vehicles from April 1, 2017

http://www.moneycontrol.com/news/bus...1-2249099.html

The apex court said that the auto companies were aware of the notification, yet decided to sit back. It added it is important for the industry to move away from commercial losses and focus on environment norms given hazardous pollution condition.

The verdict seals the fate of 824,000 unsold two and three-wheelers, trucks and buses. Collectively worth over Rs 12,000 crore

Rajiv Bajaj, MD of Bajaj Auto said that the judgment is shocking. The unsold inventory would be diverted to the overseas market. While there will be pain in business, the decision is positive for the country. "A just cause never fails,"

BS III production rose after demonetisation, when it ideally should have been reduced and knowing the BS-IV timeline.

[//M]

Originally Posted by RaghuVis

Flash News!

Supreme Court orders that BS-III vehicles will not be sold from 1 April onward. Rejects plea by govt and automakers to let them sell existing stock.

That is a very bold decision.

Not sure if I should be happy or sad as I was awaiting delivery of a BS3 motorcycle with discounts.

Any links to a news article? Somehow a simple google search doesn't shows the verdict yet.

[RaghuVis]

Originally Posted by //M

Any links to a news article? Somehow a simple google search doesn't shows the verdict yet.

SandyX just posted the link.
I am sure Mr Bajaj is not as shocked as he is showing. Maybe it's a joyful shock. If I am not wrong, Bajaj was one of the companies that did not want to have a huge stockpile of BS-III and was against government help to other companies.

[Nilesh5417]

Originally Posted by //M

That is a very bold decision.

Not sure if I should be happy or sad as I was awaiting delivery of a BS3 motorcycle with discounts.

Any links to a news article? Somehow a simple google search doesn't shows the verdict yet.

Well you could still go ahead and close the sale in 2days! The dealer might also show unbelievable agility in getting you the loan if required.

Am seriously wondering now if i should really go ahead and plonk my money - i wanted the Versys 650 but haven't heard of any discounts on it. The kwackers (650+) have all been replaced with new bikes and they all come with ABS standard so i dont find the old ones so appealing even with discount . CB650F is going to be replaced with a new version soon so same story as the Kwackers. Heard of massive discounts on the Scrambler too but it is a tough bike to live with everyday so nopes.

There is no discount on the bikes I would like to have - none on the Tigers!