With the new regulation of BS IV compliant vehicles coming into effect from 1st April 2017, automakers across India have been left with piling stocks of BS III vehicles.
One such automaker is Mahindra and Mahindra with an inventory of 18,000 units. The company had managed to get rid of some stocks through hefty discounts upto 15% allowing them to clear over half of their BS III inventory.
Following new regulations coming into effect, the company is planning to export some of its balance stock and convert some to BS IV. However, converting from BS III to BS IV could include an added expense of INR 3,000-4,000 on each small commercial vehicle going upto INR 2 lakhs on vehicles in the heavy commercial segment. The company even fears that despite such measured being taken some of these stocks could remain unsold.
During the month of March 2017, Mahindra and Mahindra sold 56,031 units as against 52,718 units sold in March 2016. This growth of 6% could also be due to heavy discounts upto 15% offered in BS III vehicles on the last few days of the past month. Domestic sales increased 9% from 48,967 units sold in March 2016 to 53,322 units sold in March 2017.
Not only Mahindra, many other OEMs have pending stocks of BS3 vehicles. It is not yet clear as toe why the OEMs continued to manufacture BS3 vehicles in spite of the government notifying well in advance of the ban.