With Dussehra and Diwali sales done and dusted, India’s two-wheeler makers are starting to implement their BS-VI transition strategies at the production and inventory levels.
Top executives from Bajaj Auto, TVS Motor Company and Hero Motocorp have indicated over the past few weeks that the next two quarters will see inventories of BS-IV vehicles slowly liquidated as they begin feeding BS-VI units in increasing amounts.
India will transition to Bharat Stage VI (BS-VI) emission norms regime on April 1 next year, and manufacturers now face the challenge of making the transition as financially painless as possible. While Honda Motorcycle and Scooter India (HMSI) has launched a BS-VI model in the Activa 125, the rest of the top manufacturers are set to follow suit.
Bajaj Auto officials, for example, have said that they have begun “bleeding in” BS-VI models into production and inventory from October.
“We are going to manage the BS-IV and BS-VI transition through balancing out wholesale and retail in a sensible way,” said Rakesh Sharma, Chief Commercial Officer, Bajaj Auto Limited during an earnings call. As for the sequencing of completely new products, Sharma noted that there might be a slight lull before the BS-VI rollout.
“We don’t want to handicap an absolutely new product with the BS-VI cost while it is fighting with BS-IV competitors, said Sharma, adding, “But, you will see an acceleration in product introduction post-April”.
Rival Hero MotoCorp meanwhile is planning to steadily roll out BS-VI variants post-Diwali.
“We have a calibrated sequence planned… and you will see us migrating over the period, starting post-festive until March,” said Niranjan Kumar Gupta, CFO, Hero Motocorp to analysts. Hero has instituted a committee meeting every fortnight to thrash out its inventory management through the transition. “It gives us an added flexibility over other players,” Gupta said.
TVS Motor too began BS-VI variant production in the run-up to the festive season.