• Two Wheeler Makers
  • Ashok Leyland
  • Commercial Vehicles
  • Policy Reforms
  • India Research
  • Truck Makers
April 03, 2017

For truck-makers, BS-III ban to cost Rs 2,500 cr

Commercial vehicle (CV) makers disposed of over half their stock of BS-III vehicles before the Supreme Court-set April 1, 2017, deadline. The discounts and incentives on vehicles sold till March 31, 2017, are expected to have cost them about Rs 1,200 crore. Additionally, Rs 1,300 crore would be incurred to dispose of the unsold inventory.

CRISIL Research estimates the impact of this on the Ebidta margins of listed truck makers (Ashok Leyland and Tata Motors’ standalone) to equal ~2.5% of their revenues. The impact would be staggered across fiscals 2017 and 2018, because the unsold inventory will have to be brought back from dealerships and then dealt with.