Strategies for providing various offers by auto companies to sustain dealers

Mumbai, Ta. 27 August 2020, Thursday

Challenges facing the country's automakers are mounting as the means of selling declines in times of recession. Auto companies rely on dealers to sell their products, but more than 200 dealers in the country have been permanently locked up in the last financial year.

Auto manufacturers are providing various facilities to sustain the dealers who are left behind. Offers such as high-margin, long-term direct loans are being made to dealers by companies to help them cope with the coronavirus crisis.

In addition to the recession of the last two years, the economic impact of the coronavirus has had a serious impact on vehicle sales in the country. Vehicle sales were zero due to the lockdown in April of the current financial year.

The financial year 2020 was one of the worst years ever for the auto industry. Auto sales were down 19 per cent to 2.15 crore vehicles in FY18. Dealers were forced to shut down as vehicle sales declined.

Companies are struggling to keep dealers afloat as the country's economic downturn due to Corona deepens and vehicle sales continue to decline in the current financial year.

The online sales system of vehicles in India is not yet widely developed and those who want to buy a vehicle have the mentality of going directly to the showroom and buying a vehicle directly. With this fact in mind, companies want to retain dealers, an analyst said.

Cash flow to vehicle manufacturers and dealers has almost come to a standstill due to Corona. Dealers are surviving due to the moratorium that has been completed for the last 3 months but with the completion of the moratorium, dealers may come under pressure.