Tata Motor, Ashok Leyland, Mahindra left with over Rs 5,000 crore of unsold BS III vehicles
A large majority of this over Rs 5,000 crore unsold inventory belongs to commercial vehicle (CV) manufacturers such as Tata Motors, Ashok Leyland and Mahindra & Mahindra.
Despite the big attempts by automobile companies to liquidate the stock of Bharat Stage (BS) III vehicles during the last three days of March after the Supreme Court (SC) verdict banning them, there was still an unsold inventory of 1.2 vehicles worth Rs 5,000 crore, said the Society of Indian Automobile Manufacturers (SIAM).
A large majority of this over Rs 5,000 crore unsold inventory belongs to commercial vehicle (CV) manufacturers such as Tata Motors, Ashok Leyland and Mahindra & Mahindra as they have BS III inventory worth Rs 5,076 crore still unsold after April 1.
Also read: Post April 1 deadline nearly 50% BS-III vehicles remain unsold
“Despite heavy discount automaker stuck with 140,000 BS III vehicles. The total BS III compliant vehicles inventory valued at Rs 5,633 crore. Companies like Tata Motors, Ashok Leyland and Mahindra & Mahindra have the unsold inventory of Rs 5,076 crore. Two-wheeler manufacturing companies like Hero MotoCorp, Honda Motorcycle and TVS Motors together hold 78,638 BS III compliant vehicles costing around Rs 336 crore,” said Stewart &Mackertich Wealth Management report.
At 10:02 hours the shares of Tata Motors was trading down 2.23% or Rs 10.55, at Rs 462.20 per piece. Mahindra stocks were also down 0.90% or Rs 11.50, at Rs 1,270 per piece. Ashok Leyland shares were however trading up 0.61% or Rs 0.50, at Rs 82.90 per piece.
Automobile companies may choose to export, refit unsold Rs 12000 crore BS III inventory
SIAM said that such heightened uncertainty in the business environment will affect investment in the automobile industry and such changed in the policy environment will affect profitability of OEMs.
Due to the high sales in March the sales of light commercial vehicles (LCVs) are expected to be weaker in the coming months and may impact the overall sales growth in FY18, SIAM said.
It also urged to the government to be clear regarding the BS VI norms which become mandatory for auto makers from April 2020, so that the same does not happen again
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