The Supreme Court has banned sale and registration of all vehicles not complying with Bharat Stage IV or BS-IV emission norms from April 1, 2017, badly jolting the auto industry saddled with an inventory worth Rs 20,000 crore.
The court announced its decision today in favour of 'public health, which is more important than commercial interests'.
Around a million vehicles, including 7.51 lakh two-wheelers, cannot be sold after March 31 due to BS-IV non-compliance, as per the apex court's order. The mandate came post a petition filed by an automaker to stop sale of BS-III-compliant vehicles beyond March 31.
According to the Society of Indian Automobile Manufacturers (SIAM), the manufacturers have a total stock of 8,24,275 BS-III-compliant vehicles.
Hero MotoCorp and Honda Motorcycle and Scooter India are going to be the biggest losers in the two-wheelers market while Tata Motors and Ashok Leyland will be most impacted in the commercial vehicle space.
Earlier, the Ministry of Road Transport and Highways issued a draft notification, making BS-IV-compliant vehicles mandatory across the country in a phased manner from April 1, 2017, without mentioning any date of registration.
Automakers suggested that the April 1 deadline was meant to stop manufacturing of BS-III vehicles, and not their sale and registration.
The manufacturers also argued that in 2005 and 2010, when the industry had switched to BS-II and BS-III, respectively, they were allowed to sell their stocks with old emission norms. Likewise, they should be able to sell their old stocks this time as the new technology is duly introduced.
The dealer community is furious over the ruling and will be pressurising the manufacturers to take back the non-compliant inventory.
The Supreme Court-appointed Environment Pollution Control Authority (EPCA) accused that most vehicle manufacturers did not prepare for the April 1 deadline; neither did they ensure a nationwide rollout of BS-IV vehicles by scaling down their production of BS-III vehicles and continued to manufacture between January and March, 2017.
Companies like Chennai-based Ashok Leyland produced a higher number of vehicles--a total of 11,563-- in January 2017 compared to 10,935 vehicles in January 2016.
However, a few players like Maruti Suzuki and truck maker Bharat Benz have already moved to the BS-IV norms.
Commenting on the development, Erich Nesselhauf, Chief Executive and Managing Director of Daimler India Commercial Vehicles, said, "A thousand BharatBenz BS-IV trucks on the road underline our commitment to lead this much-needed upgrade to cleaner and more efficient vehicles. We have worked relentlessly for more than a year to be fully BS-IV ready on April 1."