Hero MotoCorp, Bajaj Auto, other OEMs, offer discounts to clear BSIV vehicle inventory

With a little over ten days to go before the Supreme Court-mandated deadline for the registration of BS-IV vehicles comes into effect, the country's largest two-wheeler manufacturer Hero MotoCorp has introduced massive cash discounts on unsold inventory.

The company is offering cash discounts of up to Rs 12,500 on various models.

The discounts range from Rs 12,500 on premium bikes to Rs 5,000 on fast-moving SKUs such as HF DLx and Splendor Plus. The offers are available from March 18 till BS-IV unsold units lie in inventory.

This is the company's most aggressive discount since 2017 when the industry was transitioning to BS-IV emission standard, causing industry-wide disruption.

While Hero MotoCorp has been offering various discount schemes since the festive season in October last year, this is the highest upfront cash discount being offered by the company.

The company is focusing on price, alerting the prospective buyers that BS-VI will push up cost of the vehicles for the customers.

Sources told CNBC-TV18 that Hero MotoCorp dealerships are currently holding 3-4 weeks of inventory, including secondary and tertiary dealerships.

While dealers are confident of liquidating nearly 85 percent of their stock before the deadline on the back of these firesale-like discounts, especially the popular models such as the Splendor Plus, there are concerns over whether premium bikes can be liquidated in time, despite high discounts.

The challenge is now for the company to be able to swap models in time to ensure there is adequate supply of the models in demand in right geographies.

Hero MotoCorp has been dispatching fully self-financed vehicles to dealers, and has plans to utilise unsold BS-IV stock for its export markets, CNBC-TV18 has learnt.

Hero MotoCorp, in a statement, said: “Our inventories are currently at a level of less than two weeks with dealers including network. During this month, we have run market-specific, time-bound micro promotions such as the four-day scheme on scooters during the Women's Day weekend, which have been very successful. During the first two weeks of the month, our retail sales have registered double-digit growth.”

The company added: “We are confident that the BS-IV inventory in the market will get liquidated ahead of March 31 deadline, festive days from March 25 is likely to boost retail off-take further.”

High discounts on offer also mean that other original equipment manufacturers (OEMs) are also reviewing their discounts to match the competition, or they will risk losing customers to sweeter deals being offered by Hero MotoCorp.

Bajaj Auto is currently offering Rs 5000 cash discounts on their popular models like CT-110 cc and Platina 110cc. The company said to have ‘limited BSIV stock’ and has introduced the offer for a 5-day period.

Honda dealers have almost depleted BS-IV inventory by offering dealer discounts in February through March, as deal hunters make a beeline for discounted BS-IV units.

(The copy has been updated)