Coronavirus impact: Hero, TVS, Bajaj struggle to clear BS-IV vehicles worth Rs 2,500 crore
BusinessToday.In March 24, 2020
Hero MotoCorp, TVS Motors, and several other two-wheeler manufacturers are faced with the herculean task of liquidating their stocks of BS-IV compliant vehicles amid coronavirus outbreak. The Supreme Court of India had earlier directed that no BS-IV compliant vehicles will be sold or registered after April 1, 2020. The two-wheeler companies are saddled with over Rs 2,500 crore worth of BS-IV inventory, Times of India reported.
Dealers of Hero MotoCorp, Honda Motorcycle, TVS Motors, Scooter India and Bajaj Auto are wary of how they will liquidate their stocks amid the country-wide lockdown.
The piled-up inventory is around 4.5-5 lakh units of unsold vehicles. The states of Uttar Pradesh, Haryana, Delhi, Gujarat, Maharashtra, and Punjab have the most piled-up stock of BS-IV compliant vehicles.
In an attempt to contain the spread of coronavirus, majority of the states have imposed lockdown yesterday. Due to this, 90 per cent of retail networks of these automakers are shut. Besides, TVS Motors and Hero MotoCorp have temporarily closed their manufacturing facilities on March 23.
Due to economic slowdown, two-wheeler sales in the domestic market accounted for 1,294,791 units in February 2020, compared to 1,614,941 units in February 2019 marking a decrease of (-)19.82 per cent.
Recently, Hero MotoCorp approached the apex court to relax the deadline. The two-wheeler manufacturer has sought a three month-month extension for winding up sales of BS-IV -compliant vehicles.
Automobile dealers' body FADA has also filed an application with the court seeking an extension of sale and registration of BS-IV vehicles till May 31, 2020.