BS-III vehicle ban spells disaster for cos & dealers, but joy for buyers

Just one day to go for the Supreme Court ban on the sale of BS-III vehicles to come into effect, and the automotive dealers across India are making last ditch efforts to sell their excess inventory. But desperation of auto companies and dealers has brought cheers to vehicle buyers, who can expect to get heavy discounts at automotive dealerships, especially in two-wheeler sales outlets.
 
The dealerships have a total inventory of 824,000 vehicles that are BS-III compliant, out of which 96,000 are commercial vehicles, whereas 600,000 are two-wheelers, and 40,000 are three-wheelers.
 
The Supreme Court recently banned registration and sale of BS-III vehicles with effect from April 1. Following this, the excess inventory estimated to be worth Rs 12,000 crore has become worthless.

Almost 20,000 automotive dealers across the country will be facing uncertain future. The SC ban might spell end of business for the small-town dealers or sub-dealers, especially for commercial vehicle dealers.
 
Due to the short period, some companies have advised their dealers to use heavy discounting strategies to get rid of inventories and liquidate as much stock as they can.
 
However, the dealers are worried since there is a limit to how much the market can take in just two days. On the other hand, defaults are likely to increase, if the entire dealer inventory is financed through banks.
 
The discounts are likely to be in the range of 20-40 per cent of the market price of the vehicles. However, this may be a good opportunity for the customers to buy vehicles at the hugely discounted prices.