As the BS4 deadline of 31st March 2020 is approaching, it is getting immensely difficult for dealers to exhaust older stock due to very weak buying sentiments…
Federation of Automobile Dealers Association (FADA) has released the vehicle registration data for the month of February 2020. Two-wheelers has shown a minor improvement of 1.52 percent but very weak buying sentiments lie ahead.
FADA says that the BS4 inventory of 2-wheelers remain a ‘very serious’ concern. It says that despite the YoY growth, overall retail sales were much below the expected levels and pre-buying of the BS4 stock was not seen. Customers are holding on their purchases and still expect distress sales towards the end of March.
It adds that due to Corona Virus there has been an alarming drop in customer walk-ins. Add to this the massive drop in the share markets has aggravated the already weak sentiments of the market. Because of all the uncertainty, the outlook for the month of March 2020 has been flagged as negative.
FADA says that its survey revealed that ‘very high’ number of 2-wheeler dealers will not be able to completely liquidate their BS4 inventory. It urged the 2-wheeler makers to handhold the dealers for 100 percent exhaustion of the BS4 stock.
Average BS4 inventory for 2-wheelers is the highest among all vehicles at 20-25 days and its consumption is a very big challenge for a lot of dealers.
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FADA has also urged the Indian Government to consider temporary reduction in GST till the auto market stabilizes. It also requested for a financially attractive scrappage policy which will also help in reducing pollution on the roads.
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It must be noted that 31st March 2020 is the last date for the sale and registration of BS4 compliant vehicles. After this date only BS6 compliant vehicles will be registered by RTOs in India.