The novel Coronavirus outbreak is causing a restriction in walk-in sales for the car dealers in India, and thus FADA has requested the Supreme Court to extend the BS-4 deadline to May 31, 2020.
The novel Coronavirus is affecting all possible industries, trade unions, and business practices. The epidemic is also taking a toll on the Indian automobile industry because the quarantine practices are making it tough for the dealerships to sell any vehicle. Since the Indian automotive scenario would soon witness the introduction of BS6 emission compliance, dealers have to liquidate the leftover BS4 inventory before March 31, 2020. This rather worrisome situation has made Federation of Automobile Dealers Association (FADA) request the Supreme Court of India to extend the deadline for selling and registering BS4 vehicles in till May 31, 2020.
COVID-19 outbreak is coming up as a major barrier for dealers in clearing out the BS-4 inventory.
As per the current deadline, a BS4 vehicle cannot be registered after March 31. While, most car makers have started selling the BS6 compliant cars, finding buyers for BS4 inventory is turning out to be a tough job the dealerships, especially since the Coronavirus has spread its menace to all walks of life.
FADA claims that there is a big drop in walk-in sales. The footfall has reduced by a massive 60 to 70 per cent due to the Coronavirus outbreak, as masses are advised to avoid public places as a precautionary step. Although, FADA made a similar request to the Supreme Court of India in February 2020, it was denied.
“The situation has worsened in the past 3-4 days with partial lockdown situation in many towns and cities and few district magistrates have started issuing notices of the closure of shops and establishments including auto dealerships to stop the spread of the virus, and there has been a drastic change in circumstances in conducting business as usual.”
Ashish Harsharaj, President, Federation of Automobile Dealers Association (FADA)
That said, the Supreme Court of India is yet to respond to the latest request of FADA. The Indian automotive industry has been facing a huge slump for a year now, and there has been a massive drop in the sales growth, which can be credited mostly to the transition to the stricter emission compliance. In case of an extention of the deadline, the BS4-compliant vehicles will live on for a couple of months more. It will allow the dealers to liquidate the unsold inventory and curb losses. On the flip side, it could also lead to some reduction in the discounts currently being offered on BS4 products.