8-10{0764260a27b4b31ca71a8adf79c3ae299a61e6f062052eee3f0df84ce9b30ade} auto dealers face closure, Auto News, ET Auto

MUMBAI: Numerous compact and medium sized automobile sellers are staring at the prospect of shutting store or merging their firms with bigger sellers as automobile profits continue being uncertain even immediately after the lockdown is finally withdrawn.

There are at present about fifteen,000 automobile dealerships (features 2,three and four wheelers) throughout India. It is envisioned that there will be closures of at minimum 8-10{0764260a27b4b31ca71a8adf79c3ae299a61e6f062052eee3f0df84ce9b30ade} of these dealerships in the following six months, individuals in the know stated. A calendar year back again, all-around 275 in addition dealerships ended up forced to shut store citing unviability of the organization when a slowdown choked profits.

Dealerships are more than leveraged and profitability is at an all-time reduced. While sellers concur that both shutting down unviable kinds or merging with bigger dealerships will aid them through, at the minute it is all about having liquidity and stock funding for organization continuity. Most of the dealerships are concentrated in the metros and tier 1 markets, where manpower and price of functions are exceptionally higher.

“During the existing fiscal, our profits will be pretty sluggish to choose up. While there are numerous dealerships in tier three cities, they can sustain even nevertheless prices have gone up there as well, when the kinds in metro towns will truly feel the pinch”, states Vinkesh Gulati, VP, Federation of Automotive Vendor Association.

Dealerships have achieved out to OEMs to improve margins and liquidity, anticipating them to appear out with a sustainable package deal else they will have to lay off workforce.