BS4 Used Car Sales Increase — BS6 Emission Norms Effective From April 2020

BS4 (BS-IV) used car sales increase ahead of the updated BS6 emission norms that come to effect in April 2020. Major automotive manufacturers are busy making their existing products BS6-compliant while certain models are being discontinued. In order to prevent such units from piling up the inventory, the soon-to-be-discontinued models are currently available with attractive discount offers and exchange bonuses.

ET Auto shares that BS4 cars are also bargain buys on the used car market. The popular players in the pre-owned car space such as Mahindra First Choice Wheels, OLX, Trubil, etc. claim that the implementation of BS6 has brought more business activity, as there is no restriction laid on BS4 cars in the used car segment.

BS4 cars are expected to flood the used car market as there are chances of owners expecting a lower resale value if the vehicles are not sold now. Furthermore, the trouble of finding parts and assistance is also a concern (even though it won't be the actual case).

Ashutosh Pandey, CEO of Mahindra First Choice Wheels, shared, "As the resale value of BS4 models goes down, their supply in the used car park will go up. The price differential between used and new will widen as the BS6 versions replacing the phased-out models will be substantially more expensive. So there will be a spurt in demand for desirable BS4 models like the Suzuki Swift and Dzire or Toyota Corolla."

Meanwhile, the Vice President (Auto) of OLX India, Sunny Kataria stated, "Even if there's an upgrade, the used price of the earlier version declines by 5-7%. In the case of a phased out model, resale will depreciate by 15-20%. There will be some panic-selling when the migration to BS6 happens which will impact pricing."

There is a noticeable hike in BS4 cars which are inching closer to being phased out; some of the main examples being the Honda Brio, Tata Safari Storme, Hyundai Eon and Mahindra Xylo. Such vehicles will mostly be of interest in smaller towns and cities rather than developed metros.

In this regard, Shubh Bansal, Co-Founder of Truebil stated, "As they drop in prices, these phased-out models will do very well in tier-2, -3 and -4 cities where affordability is an issue."

Thoughts On The Increased BS4 Used Car Sales In India

As mentioned before, the government is really pushing towards cleaner mobility by introducing stringent emission norms. However, the authorities still have to take necessary measures to completely remove high-polluting vehicles from the system and prevent them from swarming up in the used car market.