Ahmedabad: With vehicle demand taking a hit in the automobile sector, two-wheeler dealers are struggling to sell off their Bharat Stage (BS)-IV inventories. According to the Supreme Court order last year, the sales of BS-IV compliant vehicles will be completely stopped from April 1, 2020. Since the automobile demand, especially that for two-wheelers, has taken a massive hit, dealers are struggling with inventory pile-ups.
According to data by Union ministry of road transport and highways, the number of two-wheelers registered from December 1 to December 30 this year has gone down by 44.5% against last year. “Two-wheeler dealers are offering massive discounts on all the BS-IV models and yet, the inventory continued to remain piled up. At present, most dealers have inventory worth two and a half months. After sales faring well in October during the Navratri-Diwali season, November and December saw a steep drop in sales,” said Pranav Shah, director, Federation of Automobile Dealers’ Association (FADA) – Gujarat.
Overall weakened consumer confidence added to slowing demand in the automobile sector. “With businesses in several sectors going slow, consumer confidence has weakened. While December sales are usually in slow gear, this time around the de-growth is phenomenally high as we hardly see customers walking into our showrooms. The situation does not look promising going forward because the BS-VI compliant models will be priced high by at least Rs 10,000 across all the models,” said Rajesh Patel, a city-based two-wheeler dealer.
Several two-wheeler dealers are unable to stock up on BS-VI compliant vehicles because of financial crisis, as many of them have exhausted their borrowing capacity. “Most of the dealers have exhausted their financial limit with borrowings for BS-IV compliant vehicles. Thus, most of them are unable to borrow further for a BS-VI inventory. Moreover, several manufacturers are yet to release BS-VI compliant models, many of which will be available at dealerships by January first week,” Shah said.