New Delhi April 7 (IANS) Export of unsold BS-III commercial vehicles is the most suitable option for the manufacturers with a sizeable inventory following the Supreme Court ban on sale and registration of these vehicles after April 1 2017 rating agency ICRA said on Friday.
CV (commercial vehicle) OEMs (original equipment manufacturers) are now sitting on sizeable stock of unsold inventory which is worth approximately Rs 46-58 billion the rating agency said in a report.
We believe exports of these vehicles to nearby markets where emission norms have still not progressed to Euro-IV or equivalent appears to be the most suitable option available with OEMs as upgradation to BS-IV has limited possibility.
The report said the technology to meet BS-IV norms has undergone a significant shift. In case of CVs the engines technology has moved from largely mechanical to electro-mechanical.
Apart from changes in engine technology the exhaust system has also been upgraded to either exhaust gas re-circulation (EGR) or selective catalytic reduction (SCR) technology to achieve higher reduction in Nox levels under BS-IV the report said.
In a setback to the automobile industry the Supreme Court ban on the sale and registration of BS-III vehicles just two days prior to the implementation of new emission norms on April 1 resulted in the sizeable stock of BS-III vehicles lying unsold.
Besides there was a sharp contraction in earnings on account of deep discounts extended to clear existing inventory and costs associated with re-calls and possible upgradation to BS-IV norms.
According to industry estimates the CV industry had approximately 95 000 BS-III vehicles in March 2017 of which they were able to clear only 50 000-60 000 units (or 55-65 per cent) in the last two days of the fiscal 2017 despite sharp increase in discounts (ranging between 10-30 per cent) offered by OEMs as well as dealers the report added.
--IANS
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Export of unsold BS-III vehicles suitable option: ICRA
