In second Covid-19 wave, 6,702 auto dealerships shut across 4 states 

With the second wave of covid -19, the industry seems to be getting impacted resulting in the downfall in sales numbers. The world’s fourth-largest auto market is trying hard to recover but ended up with a 13.46% decline in FY2021 and registered overall sales of 18,615,588 units as compared to 21,545,551 units in FY 2020.

Many automobile companies have halted  production and now dealerships have also been shut down. While there is no nationwide lockdown, state-wise restrictions have impacted auto sector production and sale.

According to data from the Federation of Automobile Dealers Associations (FADA), over 6700 dealerships counting up to 26% of overall dealerships in the country have been shut down in four states. There are 26,500 dealerships in the country.

Maharashtra leads the states with shutdown of 2,712 dealerships followed by Rajasthan 1,911, Madhya Pradesh 1,469 and Delhi 610.

Auto companies in Maharashtra are manufacturing only for exports. The Indian automotive sector is highly concentrated in Maharashtra as it accounts for 25% of the auto industry alone by value. Other states have been running plants with reduced workforce and production levels.

Raising concerns auto expert Ronojoy Mukherjee said, “The Industry will suffer further with these specific lockdowns by the state governments which impacted to shut down production in by Tata Motors, Toyota, Hero Moto Corp, and a few others. The numbers are surely going to dip again and dealers are going to find sustenance very difficult.’’

”Looking at the current situation of Covid-19 and expected increase of another lockdown, more than 10,000 or more dealerships may have to shut down,’’ he further added.

“It’s been tragic for the auto industry. We have been seeing de-growth since 2019 and whenever a ray of hope is there, gloom envelops us again. The auto industry was trying to crawl back to normalcy after last year’s lockdown, and the second wave has disrupted it again. Slowly, many states are going ahead with lockdowns. Starting with Maharashtra, MP, Delhi, Rajasthan, Karnataka, the list grows every day,’’ says Vinkesh Gulati, president, Federation of Automobile Dealers Associations (FADA).

“We are already seeing walk-ins down by 50%  and new bookings dismal in the dealerships which are still open. The major issue is with the two-wheeler dealers who are sitting on huge inventory and sales are down drastically,’’ he further added.

Overall, the auto industry is once again in trouble but trying hard to ramp up the production in the states that have fewer cases.