coronavirus: On last day of BS-IV, dealers rush to register vehicles in their own names

MUMBAI: Indian auto dealers registered unsold BS-IV stock in their own names as the financial year drew to a close, seeking to minimize inventory losses on expectations that they could sell the vehicles later after marking down the sticker price.

Two-wheeler, car and commercial vehicle retailers alike looked to register the last of their stock in the names of their family, business or employees seeing no other alternative.

The rush increased on Tuesday because the online VAHAN platform where vehicles are digitally registered was down on Monday.

“We have provided laptops to our employees to register all the remaining vehicles online,” said a leading two-wheeler dealer in central India. The dealer had more than 150 BS-IV units left to register as of Tuesday afternoon.

The nationwide lockdown to contain the Covid-19 pandemic brought vehicle sales to an abrupt halt, undoing the inventory management plans of the 18,000 odd vehicle dealers in the country. They were holding at least Rs 6,400 crore worth of unsold BS-IV inventory when the restrictions were imposed, according to the Federation of Automobile Dealers’ Associations (FADA), a lobby group for automobile retailers.

Many customers were holding back their purchase to benefit from a clearance sale around March-end, anticipating a repeat of when India transitioned from BS-III to BS-IV norms in April 2017.

“We were sure that the remaining few vehicles would be sold by March-end, even if there had to be a fire sale, but then this pandemic and lockdown happened,” said one leading dealer from southern India.

The dealers had approached the Supreme Court as well as vehicle manufacturers for help. The apex court said the deadline was set three years ago and there was no justification to extend it. The court permitted dealers to sell no more than 10% of what was left within 10 days of the lockdown getting over. In the national capital region, it permitted no BS-IV sale beyond March 31, considering the air pollution crisis there.

Manufacturers gave no assurance of buying back the unsold units, except Hero MotoCorp. The country’s largest two-wheeler maker asked dealers not to register the unsold vehicles in their name and assured that it will buy back those units, Hero dealers told ET.

Many of the retailers that ET spoke to said that anticipating these circumstances, they had already registered the vehicles remaining with them. These included vehicles for which they had received advances from customers, but the sales weren’t concluded before the lockdown.

“I cannot risk registering a vehicle in someone’s name based on just the advance,” said one dealer from western India.

There was also confusion regarding the 10% ruling. “I have three luxury cars of one brand. So, do I sell 0.3 cars?” said one of the persons quoted above. It will be the prerogative of FADA on the 10% allotment, he said.

The court asked FADA to provide in an affidavit the chassis and engine numbers of the 10% vehicles sold within 10 days after the lockdown, and only those would be allowed to be registered.

Spokespersons of FADA said that the organisation was abiding by the top court’s ruling.

“Those that have a lot of stock on hand will go under,” said another dealer.

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