If you think emission regulations in the United States or Europe are onerous, then you should see the hash of things that is being played out in India right now, as hundreds of thousands of vehicles have been sitting on showroom floors, flirting with disaster at the possibility of being declared unsellable in the country.
The exact figure varies from which source you believe (and their understanding that “lakh” means 100,000 in Indian parlance), so the affected number of vehicles ranges from 700,000 to 1.4 million units – most of which are trucks and two-wheelers.
As such, just days before the deadline 600,000 motorcycles soon-to-be non-compliant motorcycles were believed to be still unsold, the result of an interesting intersection of a rapidly changing environmental landscape, an unforgiving legal system, and a slowly reacting vehicle industry.
The issue comes as India has just hit its stead-fast transition date from Bharat Stage 3 emission standards (BS-III) to Bharat Stage 4 emission standards (BS-IV).
Based off their European counterpart, the move in Bharat Stage emissions is very similar to the jump the motorcycle industry just saw when it moved from Euro3 emissions to Euro4, and unsurprisingly the more stringent regulations have created more regulatory hoops for manufacturers to jump through.
Whereas Europe has made the transition Euro3 to Euro4 fairly gracefully, with some exemptions and grace periods, India’s movement towards cleaner air has been more abrupt, thanks in part to a hard-line stance by the country’s Supreme Court, and the wording of the law which focuses on vehicle sell dates, and not vehicle production dates
Wherever you want to lay the blame, the end result is that a massive amount of cars, trucks, three-wheelers, and motorcycles were almost unsellable in this heavily populated and rapidly developing country – to the tune of up to 1.4 million units
Vehicle manufacturers and dealers say the fault is with the legislative government, which gave the automotive sector less time than its European counterparts to make the necessary changes to their vehicle emissions – roughly 5.5 years instead of the nearly 10 years given in Europe.
Similarly the legal system has been blamed, as the courts have not eased-in the implementation of BS-IV regulations. Compounding things further is that the situation will likely only get worse, so the manufacturers say, as India is set to skip BS-V completely, and enforce BS-VI by the year 2020.
Still, a hefty amount of blame resides with the vehicle manufacturers and dealers themselves, as the roadmap for India’s emissions standards has been clear from their very inception, despite the popular opinion that the government wouldn’t adhere to its own timeline – foolish bet, from our perspective.
A lack of preparedness from the automotive manufacturers in India is certainly a charge that can be levied fairly, and only in the recent months have brands come to the realization that they would need to make steep discounts on the BS III units that remained still on showroom floors, before the BS IV date approached (March 31, 2017).
Clearly, these companies over-produced their BS-III vehicles and dealers struggled to unload them before the end of last month. It is estimated that now after the switch to BS-IV 60,000 motorcycles remain on dealership floors, unable to be sold legally in India.
Presumably some of these models can be retrofitted to be BS-IV compliant, if that’s even financially possible, but the exact toll of this poorly executed handoff hasn’t been completely tallied just yet, and it remains to be seen how many of the 1.4 million vehicles were sold in the rush up to the end of March deadline.
Early reports show a massive buying spree from consumers, with discounts of 60% said to be the norm. However, some reports from India still peg the unsold inventory figure at roughly 1.2 million units, though we should add that there has been great disparity in reports out of India on this subject.
The truth of the matter is likely that no one knows for certain how many machines were sold in the final days of March, but one thing is for certain is that the fiasco will cost brands millions of rupees.
The question now remains whether vehicle brands will move on from this hard-learned lesson, or if they will continue to be unprepared for the coming BS-VI standard in 2020. Only time will tell.
Source: Hindu Business Line, India Times, New India Express, & Economic Times via MotoFire
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