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In a major relief to dealers, Hero Motocorp will take back unsold BS4 Stock

Indian Automotive Industry was coming to terms with the BS6 adoption norms when nationwide lockdown occurred. Brands were offering hefty discounts on BS4 vehicles but the citizens are now staying home due to Coronavirus epidemic. Manufacturers pleaded for extension of sale and purchase of BS4 vehicles from the apex court and Honorable Supreme Court has granted relief. As a result, BS4 sale and purchase deadline has now been extended to the 24th of April, 2020.

According to a media report, Hero MotorCorp will take back all the unsold BS4 motorcyles and scooters from its authorised dealers across the country. The report doesn’t disclose the strategy or how Hero will reimburse its dealer partners. There is no official statement so far from the Hero MotorCorp in regards to this story. Exporting BS4 bikes to countries with less stringent pollution norms would be the one strategy for the company. Latin American Countries and African countries could be one such market for the Hero to sell their bikes. 

The Supreme Court on Friday provided relief to the automotive industry by extending the sale and registration of the BS-IV stock from the earlier set deadline of 31st March to the 24th of April 2020.  Dealers can now sell 10 percent of the unsold BS-IV stock within 10 days of the end of the nationwide lockdown. This condition stated we believe would not be applicable to the Delhi NCR market.

Hero MotoCorp is taking the entire unsold BSIV stock, it will be interesting to see whether the other manufacturers follow it or not. According to FADA, the auto dealers have BS4 inventory worth Rs 6,350 crore, which includes about 7,00,000 two-wheelers valued at Rs 3,850 crores, 15,000 passenger vehicles worth Rs 1,050 crores and 12,000 commercial vehicles worth Rs 1,440 crores. If these remain unsold, it will be a financial fallout for the dealerships around the country.

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