Shares of automakers fell after Supreme Court today imposed a ban on sale of BS-III vehicles from April 1, 2017. The apex court said that the manufacturers were fully aware of April 1 deadline in advance, adding that public health more important than inventories.
The Nifty Auto index fell nearly 1% post the decision dragged by HeroMoto Corp, Ashok Leyland, M&M and Tata Motors.
At 2:28 pm HeroMoto Corp was trading 4% down followed by Ashok Leyland (down 3.6%), M&M (down 0.8%) and Tata Motors (down 0.6%) while Motherson Sumi and Bajaj Auto continued trading in positive.
The bench yesterday observed that the automobile companies knew about the BS-IV notification in 2014 and when people were aware in 2010 that it was coming up, then the firms should have scaled down the production of BS-III vehicles. BS IV norms rollout started in October 2016 when EPCA had directed that vehicle manufacturers exhaust their stock of non-BS-IV vehicles before April 1, 2017.
The automakers conveyed to the apex court that technically and financially it was impractical to convert BS III vehicles to BS IV, also that unsold inventories form miniscule part of 19 crore vehicles are already on Indian roads.
The development comes in the wake of the court monitoring the alarming air pollution levels in the national capital region.