Auto Industry Transitions To BS 6 While Being Weighed Down By Much Burden

Auto Industry Transitions To BS 6 While Being Weighed Down By Much Burden

Indian Auto Industry Transition BS 6 Burden COVID-19 Slowdown BS 4 Stocks
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Achieving BS 6 transition has been a feather in the cap of the Indian automotive industry, which has now been affected by multiple issues affecting the market segment

The Indian automotive industry has achieved a significant milestone by transitioning into BS 6 emission norms on 1 April 2020 directly from BS 4, thereby completely skipping one level of regulations. However, this grand accomplishment has sadly been marred by the ongoing lockdown in the country due to the COVID-19 pandemic. Additionally, industry representative organisations have reported that almost 7.3 lakh BS 4 vehicles remain unsold with dealers in the country, with sales affected by the general industry slowdown followed by strong effects of the coronavirus problem.

MULTIPLE FIRSTS

The Society of Indian Automobile Manufacturers (SIAM) said this transition also holds another considerable effort in being four years ahead of the first plan of Government of India, wherein it was proposed to move to BS 6 in 2024. While the resolve of the country is currently under test, the commitment and combined efforts of the Indian auto industry has made BS 6 migration a reality against all odds, the industry body added.

The compliance to BS 6 emissions means that emission norms of these new vehicles are now at par with Europe, which meets one of the most stringent regulations globally. In addition to this, the emission levels of all models of Indian two-wheelers under BS 6 are also ahead of Europe and Japan, becoming the first industry to adopt this level of emission regulation. The mandate to adhere to BS 6 norms required over 1,000 models and variants of vehicles to be developed in three years, and in the process the industry is investing to the tune of Rs 70,000 crore for this.

Rajan Wadhera, President, SIAM, said it is unprecedented anywhere in the world to switch to such stringent emission regime on one single day, for all categories of vehicles including. “I do compliment my fellow industry colleagues for this outstanding achievement in meeting BS 6 emission norms despite facing huge challenges of technology, time and resources,” Wadhera added.

BS 4 STOCKS CLEARANCE

While a number of automotive manufacturers have announced the clearance of BS 4 stocks, there is still a large stockpile of these vehicles with dealers. Sources put the number of BS 4 two-wheelers, passenger vehicles and commercial vehicles, present with dealers across the country at 7 lakh, 15,000 and 12,000 units, respectively.

The Federation of Automobile Dealers Associations (FADA) had approached the Supreme Court of India recently to extend the period of sales of BS 4 vehicles. The apex court ruled that 10 % of all BS 4 inventories can be sold by dealerships in ten days from the end of the nationwide lockdown, which currently ends on 14 April. Additionally, all BS 4 vehicles sold during this period need to be registered in 10 days. However, this rule is not applicable for the Delhi and NCR region.

CONCLUSION

On one hand, the Indian automotive industry is being lauded for its efforts of transitioning straightaway to BS 6 from BS 4 and achieving it in four years ahead of initial announcements. On the other, the industry is staring into losses that would be caused due to the unsold stock of BS 4 vehicles. This strain on the automotive industry is further enhanced by the loss being experienced every day during this period of national lockdown due to the existing global pandemic. While the industry has achieved great strides in the technological advancements required for BS 6, the existing market conditions and global health situation have overshadowed them beyond return.

TEXT: Naveen Arul