How BS-III ban affected automakers' margins

761 Views Updated: 06 Apr 2017
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How BS-III ban affected automakers' margins

The country is again standing in lines. This time, the line is for bikes and scooters. The problem began on March 28th when Supreme Court banned the registration and sale of BS-III vehicles from April onwards. The impact on the market will be multi-fold and it is likely to affect the industry in many ways.

1. Impact of ban on vehicle makers

The vehicle manufacturers did know that BS-III vehicles might be banned and they had prepared in advance. However, certain companies had a large stock of BS-III vehicles and they might have to bear the consequences. The amount of losses pegged collectively by various automobile makers is however in the league of Rs 1200 crore.

2. Dealers not at much loss

Dealers will however not suffer much loss as manufacturers are likely to compensate them for the loss in one or the other way. However, some effect will be felt in the short run by the dealers also since some confusion prevails in the market on the status of BS-III vehicles.

3. Used vehicle market

Dealers who sell second-hand two-wheeler might be affected as the prices of new BS-III bikes and scooters will come down. This will naturally tempt the new customers to go in for new bikes and scooters in place of second-hand bikes and scooters.

Posted by: Lovnish Thakur Posts: (277) Opinions: (20) Points: 21,130 Rank: 1

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