Automakers Still Manufacturing BS-III Compliant Vehicles, Salve Tells Apex Court

Automobile companies have not scaled down the production of vehicles compliant with old emission norms, even as the deadline to stop the sale of such vehicles is just a week away, Senior Advocate Harish Salve informed the Supreme Court on Friday. He is an amicus curiae in the National Capital Region pollution case.

The Supreme Court will now consider whether to allow sale of Bharat Stage-III (BS-III) compliant vehicles without issuing a national permit or impose a complete ban on their sale in the next hearing on March 27.

The apex court-appointed Environment Pollution Control Authority (EPCA) had sought implementation of the government notification which made it compulsory to switch to BS-IV fuel norms from April 1. The government has already spent Rs 18,000 crore on migrating to the new emission norms, it informed the court on Friday.

Most automakers are ready to comply with the new standards but are opposed to the cut-off date as they still have unsold inventories of vehicles compliant with the older norms. The Society of Indian Automobile Manufactures (SIAM) told BloombergQuint in a recent interview that the EPCA notification allows them to manufacture vehicles till March 31, and the ban should therefore not be made effective from April 1.

According to data submitted by SIAM to the apex court, the inventory of two wheelers stands at 6.71 lakh units, of which Hero MotoCorp Ltd. alone accounts for 2.97 lakh as of March 20. Inventory of trucks stands at 96,000 and cars at 16,000.

Automotive companies typically keep an inventory of vehicles at their manufacturing facilities and with their dealers. This, as a standard practice, ranges between 3-5 weeks based on demand for the vehicle. A ban on sale of BS-III compliant vehicles from April 1 would mean that auto companies are stranded with this unsold inventory.

While a 2015 notification from the road transport and highways ministry spoke about mandatory manufacturing of BS-IV vehicles from April 2017, it made no mention of whether the sale of BS-III inventory would be allowed. In October last year, EPCA directed vehicle manufacturers that no non-BS-IV vehicle will be registered after April 1.