What can be counted as a relief for the automotive industry, the Bharat Stage -VI (BS-VI) implementation have much lesser impact on demand due to cost hike, reveal the responses automakers received from the products already launched in the market.
Country’s largest carmaker, Maruti Suzuki India (MSIL) which has highest numbers of BS-VI compliant vehicles, with eight models, on the shelf witness no negative impact due to price hike.
“We have not seen any negative impact on demand due to BS-VI, rather customers are more aware and conscious about taking better technology. Most of the buyers are preferring to go for BS-VI,” R S Kalsi, Executive Board Member, MSIL said recently.
India’s second largest two-wheeler maker, Honda Motorcycles & Scooters India (HMSI) also launched BS-VI complaint Activa 125 cc in top 50 cities. The cost difference for BS-VI compared to BS-IV is about Rs 8000 to Rs 9000 on every unit for mid to high variants, however the base variant BS-VI is about Rs 600 costlier.
“So far, the response to the BS-VI is very positive and we did not see major negative impact on BS-VI due to cost hike,” says a senior executive at HMSI. Another company official asserted that on an average the price hike could be in the range of about 10 percent.
The manufacturers have adopted multiple strategies to minimize the impact of the cost hike. While some are ready to give a temporary cushioning to customers by not passing entire cost burden.
Nevertheless, the recently debuted PV makers Kia and MG Motor which launched its SUVs Hector and Seltoes in BS-VI, are one of the best performing models. While Renault’s recently launched MPV Triber in BS-VI which had over 10,000 dispatches in the last two months, becomes French carmaker’s best performing models.
So far, the response to the BS-VI is very positive and we did not see major negative impact on BS-VI due to cost hike.Senior Executive, HMSI
Hero Moto Corp, the country’s largest two-wheeler maker which launched its first BS-VI product Splendour iSmart, is planning not to transform 30 per cent of its low volume variants based on colours and features to BS-VI models.
HMSI, which recently launched, Activa 125 (BS-VI), also realigned its product features on the base variant which is just about Rs 600 pricier downgraded from the LED. On the contrary, the medium and high variant have got a host of new features like start stop etc. to attract the buyers.
Taking cue from the last transition to BS-IV, which created massive mess, the vehicle manufacturers this time around have already started minimizing their inventory. HMSI claims to have brought down the inventory to 24 days while Hero MotoCorp has one-month inventory which is further expected to go down. MSIL also has brought down the inventory to 3 to 4 weeks.
The industry experts believe that from the next month onwards the production will go down by 20% to adjust the shift to BS-VI.