When the Covid-19 pandemic first struck India in early March, auto manufacturers and dealers were largely unprepared for what followed. Hundreds of thousands of cars and two-wheelers gathered dust as manufacturing plants and showrooms were shuttered, even as potential buyers were locked down at home.
The timing could scarcely have been worse. In the midst of the lockdown, even with the industry in stasis, the country’s emission norms lurched forward—from Bharat Stage (BS) IV-compliant vehicles to BS VI BS VI Business Standard What are BS-VI norms? Read more . This was in accordance with a mandate mandate The Hindu Businessline Supreme Court orders sale of only BS VI compliant vehicles from April 2020 Read more from India’s apex court all the way back in November 2018, which barred manufacturers from selling BS IV vehicles after 1 April 2020.
Manufacturers and dealers alike—already struggling with a multi-year slowdown in sales—were now stuck with BS IV stock stuck with BS IV stock The Telegraph BS-IV inventory piles up Read more . A whole lot of it. As of April 2020, around 700,000 two wheelers, 12,000-13,000 passenger vehicles, and 8,000 commercial vehicles were unsellable. According to analysts, the estimated value of these vehicles was pegged at Rs 7,000 crore Rs 7,000 crore CNBC-TV18 SC gives marginal relief to auto sector Read more ($960 million). In addition, manufacturers also had no way to get their brand new BS VI-compliant vehicles to retailers.
As all these storms made landfall, Fiat Chrysler Automobiles Ltd (FCA), a fringe player in India’s passenger vehicle industry, was arguably best prepared. Of course, no amount of foresight could have predicted the pandemic and the chaos that would stem from it. What FCA did know was the BS VI deadline and the stocks of its flagship sports utility vehicle—the Jeep Compass—that it needed to sell before then.
It swung into action in August 2019, consolidating its retail network of 80 dealers using cloud-based software company Salesforce’s customer relationship management (CRM) tool. This would help it manage inventory based on the retail performance of the Jeep Compass, even as it built towards the launch of a BS VI-compliant model at the end of 2019.
All told, it has sold nearly 50,000 units of the Jeep Compass since 2017. And, as of February 2020, its dealers had sold all their BS IV inventory. Even when the lockdown rolled around, the CRM tool allowed the manufacturer to ready an online sales channel to make up for the lack of footfalls that dealers were seeing.