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Coronavirus: apprehensive shoppers put auto sales in tailspin

Gudi Padva sales of cars and two-wheelers during coronavirus times looks bleak for Goa’s automobile market, reports Shoma Patnaik 

Ahead of Gudi Padva festival on March 25, auto dealers in the state expect no major improvement in the depressed market sentiment. The festival is just two days away but with the overall market in a tailspin Goan auto dealers are in a doleful mood.

  Coronavirus coming on top of the ongoing demand slowdown witnessed in the auto industry is hit local dealers badly.  Dealers said that they are in a worst situation as sales have nosedived in the face of residents trying to protect themselves from the ongoing coronavirus rather than think of purchasing automobiles. Inquiries from customer are few and bookings are fewer still, according to local dealers who say that, January- February were months of poor demand and March looks even bad. 

  “The market is sluggish. People are not coming out of their homes. Banks are slow. The entire industry is in lockdown mode. Our walk-ins have plummeted. Customers are not coming to the showroom. We are facing tough times,” said Ashok Sapra, dealer Yamaha two-wheeler and Tata Motors.

  “Gudi Padva festival in the state is important as the festival is auspicious for purchasing new things. Residents move into new homes and buy new vehicles on the day. But with the festival coming in the midst of a crucial week for the dreaded coronavirus diseases we are really worried,” said a dealer.

  “Coronavirus has worsened the situation in the automobile industry,” said Vallabh  Kunkoliencar, secretary Goa Automobile Dealers Association (GADA).   “We were already facing slow down but this situation is the worst. Our overheads are unavoidable. We have salaries to pay even if we don’t have sales.  Salaries in automobile dealerships are huge. Each dealership on an average pays Rs 25 lakh to Rs 35 lakh a month on salaries,” said  Kunkoliencar  worriedly.

  Automobile dealers are actually passing through three crucial situations, viz. the demand slowdown, coronavirus and the switch to BS6 vehicles.  Kunkoliencar said that, of the three hurdles facing the trade, the coronavirus disease is the most terrible. He indicated that, the transition to BS6 from BS4 vehicles is not a major problem for

Goan dealers.    

   “In the rest of the country BS 4 inventory is a big problem but in Goa the problem is not so much. Most of the dealers have exhausted their stock of BS 4 vehicles. Hardly 250 vehicles are there in the market. Before March 31 2020, we expect even that to go,” said Kunkolienkar.

  For the inventory to clear, dealers are hoping for a slight pickup in buying due to attractive discounts on offer on BS 4 two-wheeler and four-wheelers. “My two-wheeler inventory is almost over but we are offering discounts on passenger and commercial vehicles,” said Sapra.

  According to the Indian Council of Medical Research the country is in the second stage of transmission of the coronavirus infection, viz local transmission. The third stage is of community transmission but the government is trying to avoid that by stringent social distancing as well as complete lockdown of all services.

  In Goa the government has stopped inter-state transport services, closed malls, restaurants, schools, colleges and asked residents to stay at home. Companies are asked to make employees work from home. All this is extremely alarming for local auto dealers who are hoping for a small spurt in month-end sales which marks the end of the financial year 2019-20.

  In 2019 due to the demand slowdown caused by slowdown in the economy the automobile industry across all states went through turbulent times and witnessed 30-40 per cent plunge in sales. Goan  dealers also faced a similar situation as vehicle sales dropped by 25-30 per cent. Just the October- December months of 2019 were good as the state government lowered road tax to boost the sentiments, according to dealers.

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