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Old 31st March 2020, 18:04   #1
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Hero MotoCorp to take back unsold BS4 stock from dealers. EDIT: Fake news

According to a media report, Hero MotoCorp will take back all unsold BS4 stock from its dealers.

Hero MotoCorp to take back unsold BS4 stock from dealers. EDIT: Fake news-heromotocorpshowroom.jpg

The report does not reveal any details about how the company plans to absorb unsold inventory from dealers across India. However, it is said that the company might export these BS4 scooters and motorcycles to other markets.

The deadline for the registration of new BS4 vehicles is March 31, 2020. From April 1, only BS6-compliant vehicles can be registered in India. However, earlier this month, the Supreme Court had relaxed the deadline as dealerships were unable to sell BS4 stock ahead of the deadline due to the Coronavirus pandemic. The apex court has allowed the sale of 10% of unsold BS4 stock within 10 days after the end of the lockdown.

Source

Link to Team-BHP News
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Old 1st April 2020, 07:49   #2
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re: Hero MotoCorp to take back unsold BS4 stock from dealers. EDIT: Fake news

This is truly an incredible gesture . Hat's off to Hero for standing up for its dealerships like this. They've won fans for life. What Hero will probably do is export these bikes off and no doubt, incur a loss.

Not one car maker has announced a similarly generous gesture. What's worse, some were producing BS4 cars at full clip in February and then shoving them down dealer's throats. The only option that was left with dealerships was to register the unsold BS4 stock in their name and sell it off as a 2nd owner vehicle.
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Old 1st April 2020, 10:18   #3
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re: Hero MotoCorp to take back unsold BS4 stock from dealers. EDIT: Fake news

Is it not possible for Hero to make these bikes BS6 compliant by retuning the engine and making changes to the exhaust system, just like they have done for the BS6 versions they are now manufacturing?
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Old 1st April 2020, 10:40   #4
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re: Hero MotoCorp to take back unsold BS4 stock from dealers. EDIT: Fake news

Thanks to a Team-BHP Fan (who prefers to stay anonymous) for sending this information in. Heartfelt gratitude for sharing it with other enthusiasts via this Team-BHP page!

He is a Hero dealer from Mumbai.

Quote:
Hero is NOT taking stock back!

We have all billed the vehicles in our firm's names. All of us. Some dealers have billed 700, 800, 900 vehicles in their firm's names.

This was forced upon us. Else there was no option other than quitting.

A discount was offered which is definitely less than what we will be selling their vehicles for (as second hand). We will be incurring the losses. Not Hero.

This is just for your information. Thanks. You can try and contact any other Hero dealer for verifying this info.

Regarding buyback, they had assured that any unsold stock from NCR region only would be bought back. That is just a handful of numbers as NCR dealers don't carry hefty stocks.

Last edited by GTO : 2nd April 2020 at 08:19.
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Old 1st April 2020, 10:43   #5
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Re: Hero MotoCorp to take back unsold BS4 stock from dealers

Quote:
Originally Posted by Shreyans_Jain View Post
Is it not possible for Hero to make these bikes BS6 compliant by retuning the engine and making changes to the exhaust system, just like they have done for the BS6 versions they are now manufacturing?
This is an incredible gesture by them, your analogy is what came to my mind too, Hero themselves can do much more with the 2 wheelers than what a dealership can, the dealership could only have registered it in their name or else it would have been very difficult to do anything meaningful with it, maybe strip it for parts and sell them off when needed in service centers.

Hero themselves can just add the BS6 parts which are just different ECUs and exhaust systems atleast and different fuel systems at most. In latter cases they may save themselves the hassle and just export, they may loose some money in logistics from dealership to factory but can make for it with better profit margins in exports, they might split the cost of transportation with dealers which they would gladly agree to since it makes them get rid of the stocks.

Not that most other manufacturers can't do the same but it requires a mix of heart, ethics and lack of greed in the part of top level management but as we all know that is not very common.
Having said that, many two wheeler manufacturers including Yamaha and Honda started selling mostly BS6 models from January itself and they might not need to buy back the stocks.
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Old 1st April 2020, 11:46   #6
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Re: Hero MotoCorp to take back unsold BS4 stock from dealers. EDIT: Fake news

Hero MotoCorp has 1.5 lakh units of unsold BS IV inventory, to offer 10,000 to 15,000 discount on BS IV vehicles - Link

The two-wheeler maker will be utilizing the online platform to liquidate stock, given the fact that showrooms are shut.
Quote:
Mumbai: Hero MotoCorp holds about Rs 600 crore worth of BS-IV inventory, and these vehicles will either be sold overseas where more stringent emission norms are yet to be put in place or used for its parts business by the country's largest two-wheeler maker.

The company told analysts that the unsold stock totals about 1.5 lakh units. With the Supreme Court allowing 10% of unsold inventory to be registered, Hero MotoCorp will be offering discounts of Rs 10,000 on a motorcycle and about Rs 15,000 on a scooter to clear inventory that remains unsold. The company will be utilising the online platform to liquidate stock, given the fact that showrooms are shut.

Hero MotoCorp had organised the call to update the fraternity on the uncertain market conditions. The company stated that the situation is 'constantly evolving' and that it is difficult to predict the bottom of the cycle.

A business continuity plan is being worked on to reduce the severity of the issue. The company expects the two-wheeler industry demand to improve only by the festive season - that too supported by government stimulus and pent-up demand.

Hero MotoCorp assured that the company will continue its effort on new product development but will prioritize Capex, given the environment.

The company assured that it has about Rs 4500 crore of liquidity and reserves, which is much more than that for any future payment obligation.

Hero MotoCorp currently has one month of BS6 inventory and because of adoption of fuel injection technology, the vehicle price has been increased by up to Rs 8,000.
Quote:
In another significant move, the company relaxed its stance on the ‘Force Majeure’ clause of deferring payments, by resolving to reimburse 50% of the dues of large vendors from its earlier plan to pay only 25%.

The company said small vendors or MSMEs are being paid on time and others too on a periodical basis. The company has already paid contractual labour in advance and no one is sacked. The management said GST deferral and EMI deferral will help in managing liquidity in the current environment.
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Old 1st April 2020, 15:58   #7
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Re: Hero MotoCorp to take back unsold BS4 stock from dealers. EDIT: Fake news

Hello all, I would like to tell you that this information is NOT TRUE.

Hero is NOT BUYING back any vehicle. All the outstanding BS4 stock has been billed in the name of the dealer firm. Now, it is our responsibility to sell the vehicles and they will be sold as second hand. They even told us to sell them off to our relatives or anyone else. It's just they wont take back the vehicles.

Quote:
Regarding buyback, they had assured that any unsold stock from NCR region only would be bought back. That is just a handful of numbers as NCR dealers don't carry hefty stocks.
I am not entirely sure about this. But the rest of the information that was told regarding dealers billing huge numbers (700-800 in some cases) against their firm is true.

We even have to cut the requisite fee for RC and Insurance of the vehicle. All the money is paid by the dealer.
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Old 1st April 2020, 18:25   #8
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Re: Hero MotoCorp to take back unsold BS4 stock from dealers. EDIT: Fake news

When I checked for Xpulse for my friend in the first week of March 2020, the dealers have mentioned that they have exhausted all the stocks in Telangana/AP. They were pushing only for BS4 Glamour(with 8K discount), and mentioned to us that all other BS4 stocks (incl scooters) have been sold out.

May be North India Dealers are left with more stock than the South India ones.
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Old 3rd April 2020, 12:16   #9
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Re: Hero MotoCorp to take back unsold BS4 stock from dealers. EDIT: Fake news

Meanwhile, Hero MotoCorp is saying:

Hero MotoCorp liquidates entire BS-IV stock with ‘limited financial impact’

Hero MotoCorp to take back unsold BS4 stock from dealers. EDIT: Fake news-hero.png

Quote:
New Delhi: The country’s largest two-wheeler maker, Hero MotoCorp today said its dealers have been able to liquidate almost the entire stock of BS-IV vehicles by the evening of March 31st, thereby ensuring limited financial impact on the Company.

“We had 1.4 lakh BS-IV vehicles prior to the lockdown on account of the COVID-19 pandemic. Out of this stock, we will be taking back the 15,000 vehicles that were in the Delhi-NCR market. We would export these rest 15,000 vehicles to our global markets,” a top Hero MotoCorp official told ETAuto on condition of anonymity.

“The rest of the stock of around 1.25 lakh vehicles have been sold by the dealers through online platforms, for which we have provided support of Rs 10,000 per vehicle. So the actual financial impact to Hero MotoCorp on account of the BS-IV stock would only be limited to above extent. The company has been able to take care of the BS-IV inventory with minimum hit, and helped the dealers to seamlessly windup their fiscal without any stock,” he added.

A number of Hero dealers that ETAuto reached out to were almost unanimous in their comments that it was the support of the company that helped them to clear the stock of BS-IV vehicles and minimise any impact from the residual BS-IV inventory.

ETAuto had reported extensively on the initiatives announced by the auto company for its dealers principals to rein in the financial impact of the BS-IV inventory through financial support from the company on March 29, highlighting how the various vehicle manufacturers had announced support packages for the crisis hit dealer partners.

“You should utilize this time to bring innovation and improvements to the business models. Be considerate to your staff. We will support you during the lock-down period, not just in business, but also in the training and skilling-up of your staff and shoulder these challenges together,” he added.

Urging the dealers to maintain social distancing to overcome this unprecedented situation, Munjal said “I am aware of the difficulties that this may be posing to a lot of you. I want you to know that during this time we are together with you.”
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Old 3rd April 2020, 17:45   #10
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Re: Hero MotoCorp to take back unsold BS4 stock from dealers. EDIT: Fake news

Quote:
Originally Posted by GTO View Post
He is a Hero dealer from Mumbai.
Quote:

We have all billed the vehicles in our firm's names. All of us. Some dealers have billed 700, 800, 900 vehicles in their firm's names
How effective this strategy is can be guessed from the fact that some dealers are having even BS3 stocks registered in their name but finding no buyers. A recent pic of BS3 stock lying with a dealer:

Hero MotoCorp to take back unsold BS4 stock from dealers. EDIT: Fake news-img20200403wa0020.jpg

Asking price is around 40k inclusive of registration and insurance charges.

Last edited by vb-saan : 3rd April 2020 at 18:20. Reason: Photo orientation
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Old 3rd April 2020, 18:26   #11
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Re: Hero MotoCorp to take back unsold BS4 stock from dealers. EDIT: Fake news

Moral of the story - if it is too good to be true, it usually is.
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Old 4th April 2020, 08:23   #12
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Re: Hero MotoCorp to take back unsold BS4 stock from dealers. EDIT: Fake news

Quote:
Originally Posted by Leoshashi View Post
some dealers are having even BS3 stocks

Asking price is around 40k
In a vast market such as India, anything & everything sells at the right price. Clearly, there have been no takers @ 40k. Dealers should price them lower or put them in an auction.
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Old 4th April 2020, 08:38   #13
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Re: Hero MotoCorp to take back unsold BS4 stock from dealers. EDIT: Fake news

Quote:
Originally Posted by Leoshashi View Post
A recent pic of BS3 stock lying with a dealer:
If this dealer was based in/around NCR with unsold karizma in the inventory, I'm game.
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Old 4th April 2020, 11:05   #14
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Re: Hero MotoCorp to take back unsold BS4 stock from dealers. EDIT: Fake news

Quote:
Originally Posted by GTO View Post
In a vast market such as India, anything & everything sells at the right price. Clearly, there have been no takers @ 40k. Dealers should price them lower or put them in an auction.
We have a hero dealer in our forum as a bhpian. But i dont think he will want to incur the wrath of Hero.
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Old 4th April 2020, 21:15   #15
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Re: Hero MotoCorp to take back unsold BS4 stock from dealers. EDIT: Fake news

Quote:
Originally Posted by Red Liner View Post
We have a hero dealer in our forum as a bhpian. But i dont think he will want to incur the wrath of Hero.
I don't think Hero will be bothered. Bikes should have been already registered by dealer in his name by now and he should be free to sell at whatever price he wants. Better to let them go away at low price, rather sell them to scrap dealer for nothing. If they are not registered yet, then it is a scrap indeed.
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