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The Supreme Court's new decision concerning the sale of BS-III compliant vehicles in India after April 1st spells bad news for automakers. According to the decision, the court stated that the environment is much more important compared to the needs of the automobile industry.
The new BS-IV guidelines is meant to be strictly implemented by April 1st, 2017 on all two-wheelers, three-wheelers, four-wheelers and commercial vehicles. after which, all sales of non-compliant vehicles are to be stopped. But the Federation of Automobile Dealers Association (FADA) filed an appeal asking that the court let the sale of only BS-III compliant vehicles even after the due date, at least until the stocked-up inventory runs out. But the Supreme Court has overturned this play citing that the urgency of being clean was much greater than the preparation of the auto industry. "The seminal issue is whether the commercial interests of manufacturers and dealers of such vehicles that do not meet the Bharat Stage-IV emission standards as on 1st April 2017 takes primacy over the health hazard due to increased air pollution of millions of our countrymen and women. The answer is quite obvious," the Supreme Court judgment read.
In further defence of the ban, the Court has pointed out that automakers knew since 2010 about the BS-IV regulations and thus had ample time to prep up for the change in order to avoid losses. The FADA has combatted this argument saying that the recent slump in auto sales due to demonetization and this led to unplanned inventory pile ups. According to reports, the automobile industry has a BS-III vehicle inventory of around 824,000 units comprising over 96,000 commercial vehicles, 670,000 two-wheelers, 40,000 three-wheelers and 16,000 passenger cars.
The burden this decision will put on the auto industry is unprecedented. Another reason for the lack of BS-IV compliant production was the unavailability of appropriate fuel. Vinod Dasari, president, Society of Indian Automobile Manufacturers (SIAM) said, "The historical implementation of emission norms also reinforces the current law that stipulates “manufacturing”. The auto Industry has had the capability of making BS-IV vehicles since 2010, but lack of proper BS-IV fuel prevented it from selling such vehicles, nationwide. Running a BS-IV vehicle with BS-III fuel can cause severe problems to some vehicles." Tata weighed in on the issue as well by throwing light on the material impact of this landmark decision. As the deadline is already here, it remains to be seen how both the government and the auto industry deals with this change.