Remaining Hero BS4 motorcycles and scooters will be sold at hefty discounts by the company dealers because they have been registered on employees names…
After various different figures that surfaced during this deadline of BS4 to BS6 transition, Hero’s officials, for the first time, revealed that the company’s dealers have 1.40 Lakh BS4 2-wheelers. The value of this lot is estimated at 500 crores.
There was a report that the company may buyback these 2-wheelers from its dealers but it is nearly impossible to first, get these vehicles to the factories from hundreds of dealerships across India and second, liquidate them through various means. After this report, it was believed that Hero would export them to other countries but the company simply does not have the numbers to take this stance. We have discussed this here.
So, the question now is – How is Hero getting rid of the stock which it continued to make till February 2020?
According to an online report, Hero will take back only 15,000 units from its dealerships in Delhi and NCR region, deadline for which has already passed. The company will export these motorcycles and scooters to its markets in Africa and Asia.
For the remaining 1.25 lakh BS4 2-wheelers, Hero has provided a support of Rs 10,000 per vehicle to its dealers. It has been established that dealers have already billed these 2-wheelers to their employees through online channels. And this gives them a free hand to sell them as second hand vehicles in the market. However, the question remains – is this amount of Rs 10,000 per vehicle enough?
Through this step, Hero has taken a hit of roughly 125 crores and has left it to its dealers to dispose off the remaining stock.
The Supreme Court of India has ruled that auto manufacturers can sell upto a maximum of 10 percent of their BS4 stock post 10 days from the current lockdown because of the COVID-19 pandemic.
Source – CNBC TV18