The 6-day lockdown in major cities across India is expected to reduce 1/3rd of the passenger car market. Furthermore, the lockdown is going to impact every industry, from the manufacturer, dealer to the seller.
On Monday, a 6-day lockdown was implemented in six states in the country. These states include Madya Pradesh, Uttar Pradesh, Rajasthan, Maharashtra, Chhattisgarh, and India.
Amit Garg, a promotor of a major car dealership company, says,
“The Delhi showrooms and workshops are closed from Tuesday. The showroom footfalls in the NCR had dropped suddenly. Imposing lockdown is not the solution. Providing proper medical facilities and adhering to COVID-19 guidelines such as social distancing is the way forward.”
He is part of Shiva Motors, a dealership company that has alliances with Mahindra, Bajaj, and Jaguar Land Rover. He further added,
“Lockdown will weaken the economy and the auto sector, which is yet to recover to normalcy.”
No sales, No increasing fixed costs
As said by a Pune-based auto parts supplier, the lockdown would impact the ones working. When the showrooms are shut down, losing sales means losing income for working people.
A senior executive requestions anonymity, who is part of a major part supplier says,
“It looks like this April also will be a washout like last year. Manufacturers are trying hard to maintain production levels but clearly, they are hit. If retail stores are shut with no sales and if this continues for long just like last year. The production units will be forced to cut volumes.”
At least 56% of the chief executives have shown their concern about not having a market. Only recently, the major car-makers have initiated work towards electric vehicles. Multiple two-wheelers and four-wheeler electric vehicle start-ups in India have planned to start production soon by this year-end, or early 2023.
Executive director of Maruti Suzuki, Shashank Srivastava says,
“The current lockdown in 6 states will obviously affect the industry sales activities for almost 30%. If it continues it will damage market sentiments. This can have a disproportionate and adverse impact on sales, especially on retails.”
Authorized dealer for Mahindra, JS four-wheeler motors Founder also expressed concern on the lockdown. Nikunj Sanghi said that this lockdown could impact their future sales too because this is about people’s sentiments. Lay-offs or pay-cuts in this situation are expected and unavoidable. However, from the public’s perspective, it is different considering the loss of the job market.
Can’t deliver the cars home
As the cars can’t be registered with registry offices shut down, FADA (Federation of Automobile Dealers Associations) has tried a different method. Not being able to register, removes the option of being able to deliver cars home. Some members of the committee asked Rajasthan chief minister Ashok Gehlot for a special consideration to open car dealerships for limited hours.
If approved, this could at least complete the incomplete deliveries they had promised the customer earlier.