Hero Motocorp halts payments of its suppliers

 Hero Motocorp halts payments of its suppliers

Since January 2020, Corona Virus has taken the world on its ride, by not only bringing the economy down but also by putting many lives in danger.

The virus pandemic has affected every field due to massive lockdowns across various countries.

Here we are talking about the motorcycle market. The lockdown has threatened to sell the BS4 inventory in India as the last date, March 31, 2020.

Total BS4 inventory, which still remains unsold, is Rs 2,500 Crores.

Pessimistic Market

In 2020, the market is facing difficulties due to the pessimistic impact of the Coronavirus on global GDP.

It all started in January 2020 when Coronavirus began its pandemic and spread across the globe.

The February 2020 YOY sales are not good, and it may hit further. Do check here.

Stocks Unsold

Now each and every motorcycle manufacture are closing there manufacturing plants. And Hero being the dominant player in terms of the BS4 stock that is still to be sold.

We learn from Auto Economictimes that they have around worth 7,00,000 INR stock that is yet to be sold.

Payments Suspended

The fact that Hero MotorCorp doesn’t have clear visibility on the receivables with no sales during this COVID- 19 lockdown period.

And the dealers will remain shut till at least April 14.

“In this situation, we are left with no other option but to invoke force majeure and regret to inform that HMCL will not be in a position to meet all its obligations,” the company told its suppliers.

However, on the other hand, the Supreme Court already refused to extend the deadline beyond March 31, 2020, by which sales of the BS4 motorcycles has to stop.

After the lockdown Supreme Court has allowed selling 10% of the remaining BS4 stock to be sold in 10 days.

“Hero has always supported its stakeholders, and will continue to do so,” it said in an email. 

“Despite the challenging circumstances.e are prioritizing payments process to make full and on-time payments to a large number of MSMEs and small vendors.”

0 0 vote
Article Rating

Related post

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments
0
Would love your thoughts, please comment.x
()
x
SUBSCRIBE TO OUR MONTHLY NEWSLETTER
And keep yourself up-to-date about biker's news.
SUBSCRIBE NOW!
Receive monthly Biker's News right in your inbox.