SC bars sales of BS-III vehicles after March 31

The Supreme Court banned the sale and registration of vehicles that don't meet the Bharat Stage-IV emission standards or higher from April 1, dealing a major blow on an industry that is sitting on inventory worth an estimated Rs.14,000 crore that they won't be able to sell.

Automakers claimed that they had 8.24 lakh units of mostly two-wheelers, three-wheelers and commercial vehicles that conform to BS-III standards lying in their factories and dealerships. The Society of Indian Automobile Manufacturers petitioned the Supreme Court seeking some leeway to clear the inventory citing the financial impact, but a bench led by Justice Madan B Lokur refused to extend the April 1 deadline to usher in the new standards.

SIAM said while the industry would abide by the Supreme Court order, the resultant financial losses could trigger job losses across the industry.

Most passenger vehicle makers, including Maruti Suzuki, Hyundai, Toyota, Ford and Honda, have already completely shifted to production of BS IV-compliant vehicles, but some two-wheeler, three-wheeler and commercial vehicle manufacturers kept on producing BS-III vehicles even after the government notified the March 31, 2017 deadline.On Wednesday , companies sitting on unsold BS-III inventory were busy discussing ways to dispose of the vehicles. Some suggested the possibility of exporting these vehicles to countries where they meet local emission rules.

As of March 20, the inventory pile up of BS-III vehicles comprised 6.71 lakh two-wheelers, 96,700 commercial vehicles, 40,048 three-wheelers and 16,198 passenger vehicles, according to SIAM data.

In its ruling, the court said the manufacturers were fully aware that from April 1, 2017 they would be required to sell only BS-IV compliant vehicles, but for reasons not clear, they chose to sit back and declined to take sufficient pro-active steps.

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