Coronavirus impact: Auto sales plummet 80%, dealers approach SC for BSIV old stock deadline extension

With the number of people infected by Novel Coronavirus outbreak in India crossing 100 and a number of states going into a partial lockdown, sale of automobiles in the country has plummet by as much as 70 percent in the last four days. This has prompted the Federation of Automobile Dealers Association (FADA) to knock on the doors of Supreme Court for an extension of the deadline for BS-IV vehicle registration beyond March 31.

“In the past week there has been drastic drop in sales and customer walk-ins have reduced to a trickle as caution sets in due to fear of spreading of the virus. Counter sales has fallen by 60-70 percent across auto dealerships in these past few days,” said Ashish Harshraj Kale, President, FADA. “The situation has worsened in the past 3-4 days with partial lockdown situation in many towns and cities and a few district magistrates have started issuing notices of closure of shops and establishments including auto dealerships to stop the spread of virus.”

The domestic industry, which is getting ready for the transition to BS-VI emission regime from April 1, 2020, finds itself in a catch-22 situation. In February, the Supreme Court had reiterated that no BS-IV vehicle could be registered for sale beyond March 31, putting the onus on dealers to liquidate all remaining stocks by then. The steep decline in footfalls at dealerships due to the spread of the virus has, however, put a serious doubt on that.

“This is a situation that is beyond our control. The fact is many of our members may face dealership closures if leftover with unsold BS-IV stocks,” Kale added. “We have once again approached the apex court with a request for permission of sale and registration of BS-IV vehicles till May 31, 2020 and hope to get an urgent hearing in the Hon’ble Supreme Court owing to the criticality of the issue and the deadline of 31st March approaching fast.”