BS III vehicles ban: SIAM & auto industry frustrated over the ban

New Delhi: The Supreme Court verdict banning BS III vehicles from April will have to be respected but it is “frustrating” that the existing law allowing sale of these vehicles was ignored, Automobile industry SIAM said today. “We all have to respect the Supreme Court verdict,” Society of Indian Automobile Manufacturers President Vinod Dasari said. He said commercial vehicle makers have been producing BS IV units since 2010 but they have been selling BS III for the last seven years because of lack of fuel. Stating that as per government notification, sales of BS III vehicles were allowed after April 1, he said: “Now suddenly those BS III vehicles are banned. I find it quite frustrating that something like this happens.” The main issue for the industry was the availability of BS IV fuel across the country, he added.

On the impact of the verdict, Dasari said: “There will be utter chaos in the next few days for the dealers and the finance companies which have sold BS III.” Dasari, who is also the Managing Director of Ashok Leyland, said the company is impacted very little by the order. Supporting the Supreme Court order, Bajaj Auto Managing Director Rajiv Bajaj said: “There are some things on which you can’t put a price. This is for the future of our children. This is a matter of principle.”

Although the notification says “production, not sales from April 1”, but “you have to read what is unwritten”, he said. Similarly, Toyota Kirloskar Motor Vice-Chairman Vikram Kirloskar said: “We have to go towards meeting global standards of emission and safety, and that is the only way forward.” Toyota Kirloskar stopped manufacturing of BS III vehicles more than a year ago and all its vehicles currently being sold in India are BS IV compliant. Two-wheeler maker Honda Motorcycle and Scooter India said: “We respect the honourable Supreme Court’s decision and confirm that all our products comply with BSIV norms.” Car market leader Maruti Suzuki is least affected by the order and has been making BS IV vehicles since 2010.

Commenting on the implications of the order, EY Partner and automotive sector leader Rakesh Batra said: “The Supreme Court decision will result in difficulties for the entire automotive value chain, on top of cost increases to comply with BSIV vehicle production and GST implementation.” This industry works globally on 20 to 30 days inventory within the distribution channel and this should have considered as part of the transition plan when migrating from BS III to BS IV, he added. “Unfortunately a last minute decision does not help any of the industry stakeholders or consumers, in the month of March when volumes are higher due to year-end purchases and deals,” Batra said.