NEW DELHI: Homegrown auto major Mahindra & Mahindra (M&M) today said the Supreme Court order banning BS III vehicles from April 1 will have a one-time material impact on the company.
“This unexpected ruling has perplexed the industry and will have a one-time material impact even on the company,” M&M said in a statement.
The Mumbai-based company said the law related to the implementation of BS IV emission standards for vehicles from April 1, provided for allowing the sale and registration of BS III vehicles manufactured prior to April 1, 2017 in the same manner as in such transitions over the last twelve years.
“But the Hon’ble Supreme Court has passed an order banning the sale of such BS III vehicle stock and thus overriding the law in place, on the basis of which the company had planned its operations. This unexpected ruling has perplexed the industry and will have a one-time material impact even on the company,” M&M said.
The company respects the order of the Hon’ble Supreme Court and shall fully abide by it, it added.
The automaker is working to ensure sustainability in all its operations and has been ramping up its BSIV production for nationwide implementation from April 1, 2017, M&M said.
Besides, it is working on various options to work within the framework provided by the Court order, even trying to liquidate as much of the company’s and its dealers’ BS III inventory as possible by March 31, it added.
“The company will make every attempt to minimise the one time impact of this order on the company’s financials,” M&M said.
The Supreme Court yesterday banned sale and registration of vehicles with the older BS-III emission norms from April 1, in a blow to auto firms saddled with a stock of over 8 lakh such vehicles valued up to an estimated Rs 20,000 crore.
According to industry estimates, total value of vehicles impacted by ban is between Rs 15,000 crore and Rs 20,000 crore. Around 6.71 lakh two-wheelers, 97,000 commercial vehicles and over 40,000 three wheelers are affected by the ban.
Shares of M&M closed nearly 1 per cent higher at Rs 1,280.40 on BSE today.