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Most auto manufacturers in the country have already started offering next-generation BS-VI compliant vehicles, five months before the new emission deadline kicks in. Indian consumers however are making the most of the festive offers on BS-IV complaint vehicles.
Manufacturers have been offering heavy discounts and benefits that include cast discounts, corporate discounts, and even free accessories in order to reduce their BS-IV inventories. Some manufacturers are offering discounts of up to Rs 1.75 lakh.
These big discounts and offers have boosted sales to some extent over the first ten days of the current festive season leading up to Dussehera. According to Economic Times Auto, Maruti Suzuki saw an increase of between 5 percent and 7 percent in wholesale and retail sales of their BS-IV products.
RC Bhargava, Chairman, Maruti Suzuki, said, "Sales of BS-VI are not booming but at the same time we do not have much unsold BS-IV inventory. We planned our BS-VI product launches ahead of the deadline."
On the other hand, the early adoption of BS-VI compliant petrol vehicles in the mass segment has worked for Maruti Suzuki. The company has sold over 2 lakh units of BS-VI compliant vehicles within six months of launching its first compliant car in April this year.
Hyundai Motor also adopted BS-VI norms early on, and company feels that BS-IV models are outselling the BS-VI ones. The company feels that sales are up because of the offers and discounts, and they also say that only a handful of customers opt for BS-VI models considering the price difference.
Dealers feel that manufacturers should have offers and discounts running on both BS-IV and BS-VI models. They say that is the only way a buying customer will be able to tell the value in the products.
Dealers are also of the impression that BS-IV vehicles will command a high resale value for the foreseeable future because maintenance costs of a BS-VI vehicles are an inestimable at the moment.
Primary reasons for this is that several used car dealers are willing to carry a size-able inventory. And these dealers will earn a higher margin when the demand for used BS-IV vehicles kick in.
Diesel mill manufacturers are working on BS-VI upgrades at a slower pace. Manufacturers like Mahindra for example, is yet to launch a BS-VI compliant vehicle. Their timeline is justified as BS-VI diesel is still unavailable in the country, and the costs to upgrade diesel engines are more than that of petrol engines.
Thoughts About Sales For BS-IV Vehicles Rising
Manufacturers offered discounts for vehicles under their BS-IV portfolio and it worked. Sales were expected to go up during the festive season, simply because of these offers. We expect that companies will continue to offer discounts and benefits until 31 March 2020, and expect that BS-IV compliant vehicle will continue to outsell any BS-VI model until then.