1/10 Auto Dealers may face closure

Even after the lockdown, auto sales are uncertain and many small and medium-sized vehicle dealers are looking to close the store or merge their businesses with larger dealers.

There are currently 15,000 auto dealerships across India (including 2,3 and 4 wheelers). Famous people said they plan to close at least 8-10 percent of these dealerships over the next six months. A year ago, 275-plus dealerships had to close the store.

Dealerships are crowded and profits are at an all-time low. Dealers agree to help them close down or hurt larger dealerships, but are now about getting liquidity and inventory funding for business continuity. Most dealerships are concentrated in the Metro and Tier 1 markets, where the cost of manpower and maintenance is high.

Our sales are likely to slow in the current fiscal year. “While there are many dealerships in Tier 3, we are still cutting costs. People in metro cities will feel a pinch,” said Vinkesh Gulati, VP of Federation of Automotive Dealers.

Dealerships have reached out to OEMs to increase margins and liquidity, hoping they come with a stable package, otherwise, they will have to eliminate workers.

Source- The Times of India