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Mahindra & Mahindra, other automakers rethink BS-IV product launches

Bharat Stage norms are emission standards imposed on automobile manufacturers that specify the maximum permissible limits for pollutants in the exhaust fumes of automobiles.

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Mahindra & Mahindra (M&M) is rethinking launching six products under Furio platform in the Bharat Stage IV regime after the Supreme Court banned the sale of vehicles under the emission norms after April 1, 2020. The company is considering shifting at least a couple of products to the BS-VI regime.

Sources said other original equipment manufacturers (OEMs) too are bringing changes to their strategies for a smooth transition into the BS-VI regime.

Bharat Stage norms are emission standards imposed on automobile manufacturers that specify the maximum permissible limits for pollutants in the exhaust fumes of automobiles.

Furio, a platform of 21 products, was introduced by M&M in July this year for its new range of Intermediate Commercial Vehicles (ICVs). Designed by its Italy-based subsidiary Pininfarina, Furio has been developed with an investment of Rs 600 crore. The company had then announced its plans to launch six trucks in the current fiscal while the rest will come straight in the BS VI era.

Vinod Sahay, chief executive officer, Mahindra Truck and Bus and Construction Equipment Divisions, M&M said, "We are right now debating. We will not launch all the six products under BS IV, as the Supreme Court has decoded everything." "Out of six, we would have to postpone a couple of products because the window of BS6 has reduced," Sahay said on the sidelines of the launch of the Blazo X, an upgrade of its Blazo range of heavy commercial vehicle trucks, on Friday.

Sahay said if the BS-VI deadline had been four years away, then M&M would have launched all 21 products under BS IV itself as it would have had all the time to recover its investment.

He said it made absolutely no sense to launch any product in August 2019 because after four months its production will need to be stopped.

The Indian auto industry is slated to jump to BS VI, skipping BS V, and a deadline of April 1, 2020, has been set. Drawing a strong line on environmental issues, the apex court, had in the last week of October, reiterated that sales of BS-IV complaint vehicles and their registration will not be allowed after the deadline. The court announced its order after certain OEMs had approached the court seeking deadline extension.

According to the experts, the court's order has brought the clarity over the industry transition to the new emission regime. In a similar situation during the transition to BS IV regime from BS III, the Supreme Court had in its March 29 order banned the registration and sale of vehicles not compliant with BS IV emission norms from April 1, 2017. The apext court order had a huge impact on the finciances of the OEMs, as the industry collectively is believed to have sustained losses of around Rs 12,000 crore. While the OEMs tried saving some money by offering huge discounts on the last two days of the deadline, a significant number of vehicles became redundant, which were later either upgraded to BS IV at a heavy investment or were exported to other countries with similar level of pollution regulations.

Analysts said that despite the current slowdown, the demand for CVs is bound to return back from the start of new year as the deadline for BS VI nears. The fleet operators are expected to make purchases during this period in order to avoid paying a higher price after BS VI kicks in. "However, the OEMs will slow down their launches by the second half of next year, in order to push out the BS-IV inventory as much as possible." said a Mumbai-based analyst.

THE DEAD END

  • The Indian auto industry is slated to jump to BS VI, skipping BS V, with the deadline of April 1, 2020, set for the transition
     
  • The apex court has reiterated that sales of BS-IV complaint vehicles and their registration will not be allowed after the deadline
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