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TaMo sees slow CV sales as customers wait for GST

Buyers are looking for clarity on prices post B-IV emission norms and goods and services tax rollout; co looking to export 8,500 BS-III vehicles

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Tata Motors expects the current quarter to be a slow one for commercial vehicles (CV) due to several factors including a wait-and-watch policy of customers on account of increase in prices following BS-IV implementation, pre-buying in earlier months and goods and services tax (GST) rollout slated July this year.

Ravindra Pisharody, executive director, commercial vehicles at Tata Motors, while disclosing the growth strategy for the new financial year said at present there is "confusion" among customers on account of several factors. The major one is about pricing of BS-IV products by various companies, which will settle down in a few months. Also, the GST implementation will give certainty on pricing, he said, adding, "We are looking for more stable period after August-September period of this year".

On how the regulatory changes in the industry will pan out in the mid term, Pisharody said, "In the next three years or so most of the regulations will get out of the way. This will give high trajectory growth to the industry in coming years."

According to experts, the auto sector has seen some hiccups since November last year, when the Union government announced demonetization of Rs 500 and Rs 1000 currency notes which brought industry to a sudden halt. The sales started picking up by January-February, but the Supreme court decision on banning sale of BS-III vehicles beyond March-end was a shocker to most of the companies. As a consequence, they were saddled with an inventory of BS-III vehicles worth over Rs 13,000 crore.

The companies are also mandated to invest in upgradation to the stricter BS-VI norms, skipping BS-V.

According to an official, the company has an inventory of around 15,000 BS-III vehicles and the company along with other industry players is seeking a window period for selling of these vehicles through legal procedure. The Society of Indian Automotive Manufacturers (SIAM) has filed a review petition in the court for this and the central government is understood be backing it.

Meanwhile, till the legalities are sorted out, the company officials said out of the total inventory of around 8,000-8,500 units will be exported to foreign markets. The rest will be converted to BS-IV ones. "However, if the conversion cost is more than 50% it makes no sense to go for it," Pisharody said.

The company said its SCR technology will be scaled up to meet the stringent BS VI emission standards.

EMISSIONS TANGLE

  • The company along with other industry players is seeking a window period for selling of these vehicles through legal procedure
     
  • SIAM has filed a review petition in the court for this and the central government is understood be backing it
     
  • The company said its SCR technology will be scaled up to meet the stringent BS VI emission standards
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