NEW DELHI | MUMBAI: Indian two-wheeler companies are in a photo-finish race to sell old stock before stricter emission norms kick in Saturday: And that last-ditch effort has thrown up only one winner – the buyer.
Companies are offering record discounts and cash-back of up to Rs 22,000 on BS III-compliant models to liquidate inventory before April 1, when BS IV emission standards become the norm across India. The race to sell BS III compliant vehicles comes a day after the Supreme Court ordered a ban on the sale and registration of vehicles that don’t meet the new standards.
The market leader Hero MotoCorp on Thursday announced discounts of Rs 12,500 and free insurance on models such as Duet, Maestro, Super Splendor 125 cc, and Glamour. Rival Honda Motorcycle & Scooter India (HMSI) said it is offering cash-back of up to Rs 22,000 on its BS III range. Given the magnitude of discounts being offered by competing companies, Bajaj Auto Limited (BAL) told its dealers to offer free insurance and discounts in the range of Rs 3,000-12,000 on BS III compliant versions of CT100, Platina, Discover 125 , V15, Pulsar (exclusive RS200), Avenger, and Pulsar RS200.The offers are valid until March 31.
According to dealers, Hero MotoCorp is offering discounts of Rs 5000 on entry level commuter bikes, Rs 7,500 on premium motorcycles and Rs 12,500 on scooters.
On its official Facebook page, HMSI announced Thursday cash-back offers of up to Rs 22000 on “Honda’s all BS III motorcycles and automatic scooters”.
The cash-back is in the Rs 13500-14,500 range on scooters Activa, Dio and Aviator. For motorcycles CB Shine SP, CB Shine, Dream Yuga, and Livo, the discounts are as high as Rs 18800, dealers said.
Discounts offered in the run-up to the pan-India implementation of BS IV norms are unprecedented. With 671,000 BS III two-wheelers in stock, companies in this category accounted for over 80% of the overall inventory of 824,000 BS III compliant vehicles available locally as of March 20, 2017. According to data from industry grouping SIAM, there were 96,700 commercial vehicles, 40,048 three-wheelers, and 16,198 passenger vehicles in that inventory. CARE Ratings valued the old stock at Rs 14,000 crore.
“These are all time high discounts in the band of Rs 5,000-22,000,” said Nikunj Sanghi, director (international affairs), Federation of Automobile Dealers’ Association (FADA).
“Manufacturers will compensate for most of it, but there will be a squeeze on margins at the dealers’ end too. It is easier to liquidate stocks of two-wheelers, but not so for bigger-ticket commercial vehicles.”