Automobile dealers move SC to sell BS IV inventory beyond April 1 deadline

Federation of Automobile Dealers Associations (FADA) members are operating on 3-5 per cent gross margins of the cost of the vehicles

Auto dealers have approached the Supreme Court to sell the remaining BS IV inventory purchased before March 2020 beyond the current deadline of April 1, 2020.

Federation of Automobile Dealers Associations (FADA), apex body of auto dealers in the country, on behalf of its members today filed an Impleadment Application in the Supreme Court along with an application seeking modification in the apex court’s order of October 2018, which directed that “…no motor vehicle conforming to emission standard Bharat Stage-IV shall be sold or registered in the entire country with effect from 01.04.2020.”

FADA President Ashish Harsharaj Kale said that with BS-VI fuel to be available across India starting April 1, 2020, most manufacturers would shift to 100 per cent BS-VI vehicle production only by end February 2020 or the first week of March 2020.

Looking at this timeline of BS-VI production and the current fluctuating demand situation, despite the best efforts, there is a possibility that many dealers will not be able liquidate 100 per cent BS-IV inventory purchased by them in the course of business before the deadline of April 1, 2020, fixed by the Supreme Court.

FADA members are operating on 3-5 per cent gross margins of the cost of the vehicles. If dealers are left with any inventory of BS-IV, many of them will face financial hardship which could even threaten the existence of their business, said Kale.

FADA appealed to the apex court to protect the inventory, and in turn, the survival of business of its members and allow them to sell and register inventory purchased before March 1, 2020, which remains unsold by the March 2020 beyond the current deadline of April 1, 2020.