Ahmedabad: With the Union government remaining firm on phasing out sales of BS-IV vehicles from April 1, two-wheeler dealers across the city are jittery over clearing inventory of BS-IV compliant vehicles. Estimates by dealers suggest that inventory worth Rs 100-120 crore of BS-IV-compliant two-wheelers has piled up in Ahmedabad alone. This amounts to a stock of vehicles that lasts up to a month and a half.
“Despite discounts, sales have remained muted, owing to the impact of slowdown. Customer footfalls are also significantly low at showrooms and discounts as high as Rs 10,000 on vehicles priced around Rs 65,000 are not proving enough to convince customers into buying. The demand is still good for popular models but for others, it continues to remain low-key,” said Rajesh Patel, a city-based two-wheeler dealer.
Federation of Automobile Dealers’ Association (FADA) had also made a representation to the Union government, urging to defer the date for stopping sale of BS-IV-compliant vehicles. However, since the decision was taken by the Supreme Court, the government denied the request.
With barely a month and a half to complete phasing out of sale of BS-IV compliant vehicles, dealers are not just concerned over clearing pending inventory but are also struggling to get finance. “Dealers keep the vehicle inventory on finance because not all have deeper pockets. However, Non-Banking Finance Companies (NBFCs) have tightened norms and as a result, dealers are not getting funding for BS-IV-compliant vehicles,” said Pranav Shah, director, FADA – Gujarat.
Vehicle sales have overall remained muted in Gujarat due to the slowdown. According to data furnished by the Union ministry of transport, 1.10 lakh vehicles were registered in January 2020 in Gujarat, declining by 14.18% against December 2019, when 1.2 lakh vehicles were registered in the state. In fact, vehicle registrations showed a consistent de-growth for three months in a row since November 2019.
“Despite discounts, sales have remained muted, owing to the impact of slowdown. Customer footfalls are also significantly low at showrooms and discounts as high as Rs 10,000 on vehicles priced around Rs 65,000 are not proving enough to convince customers into buying. The demand is still good for popular models but for others, it continues to remain low-key,” said Rajesh Patel, a city-based two-wheeler dealer.
Federation of Automobile Dealers’ Association (FADA) had also made a representation to the Union government, urging to defer the date for stopping sale of BS-IV-compliant vehicles. However, since the decision was taken by the Supreme Court, the government denied the request.
With barely a month and a half to complete phasing out of sale of BS-IV compliant vehicles, dealers are not just concerned over clearing pending inventory but are also struggling to get finance. “Dealers keep the vehicle inventory on finance because not all have deeper pockets. However, Non-Banking Finance Companies (NBFCs) have tightened norms and as a result, dealers are not getting funding for BS-IV-compliant vehicles,” said Pranav Shah, director, FADA – Gujarat.
Vehicle sales have overall remained muted in Gujarat due to the slowdown. According to data furnished by the Union ministry of transport, 1.10 lakh vehicles were registered in January 2020 in Gujarat, declining by 14.18% against December 2019, when 1.2 lakh vehicles were registered in the state. In fact, vehicle registrations showed a consistent de-growth for three months in a row since November 2019.
