TVS returns INR 57 crore to dealers towards the BS3 discount losses they suffered
TVS Motor Company is among the first to settle dealer losses incurred during the BS3 stock clearance days.
One 29th March, Supreme Court of India upheld their decision to ban sales of BS3 compliant vehicles from 1st April 2017. This resulted in a mayhem for dealers, as they had stocks of old BS3 vehicles which will go redundant in about 2 days time. So dealers all across India, announced huge discounts to clear the BS3 stock.
On 29th March, this is what TVS revealed in a media release – “The Honourable Supreme Court has passed an order dated 29th March, 2017 stating that only vehicles, which meet BS IV emission standards can be sold and registered with effect from 1 April, 2017. TVS Motor Company is a responsible corporate citizen and is fully supportive of a better environment for our customers, and society at large.”
“Products of TVS Motor Company are sold in over 4,000 dealer touch points across the country. All our dealers have been advised to strictly comply with the order of the Hon’ble Supreme Court and sell the BS III compliant stocks with them on or before 31st March, 2017. TVS Motor Company is fully geared up to meet the new emission guidelines and had already commenced manufacture and sale of BS IV compliant vehicles to the dealers.”
The discounts allowed many dealers managed to clear the BS3 stock, but they also suffered huge losses. TVS Motor Company has come forward and paid their dealers a total sum of INR 57 crores, which will settle their losses they incurred during the clearing BS3 stock phase. The INR 57 crores has been allotted from the company’s fourth quarter profits.
This comes as a big surprise, not only to the dealers, but also to other OEMs as it was not expected for a company to settle the dealer losses. During the BS3 stock clearance days, TVS dealers were selling vehicles at a discount of up to INR 20,000.