[GTO]

Quite a plea from the 'Federation of Automobile Dealers Association'.

Posting as received:

Automobile dealer fraternity supports the Government’s move to demonetise Rs. 500 and Rs. 1,000 currency notes. However, it has had immediate adverse impact on auto market due to cash crunch and resultant slowdown.

Since the announcement, Federation of Automobile Dealers Associations (FADA) has proactively established contact with automobile dealers across brands, categories and sizes of business. The situation of retails is much more alarming than the dealer community could anticipate. The entire auto retail trade has come under severe stress.

FADA realises that the situation is transitional and will ultimately normalise and probably be better than now. However, most of the dealerships are saddled with stocks and near zero retail. The situation is unlikely to see much improvement till financial year end.

As a consequence, it seems unlikely that a majority of dealerships would be in a position to honour their commitments to banks and financial institutions.

Commenting on the crisis like situation at present, John Paul, President, FADA urged the vehicle manufacturers to come up with their support to reduce inventory at the dealerships and to make available enhanced credits from banks to the dealers.”

He informed that FADA had taken up the issue with all banks & financial institutions as well, urging them to take a favourable stand so that the auto market would sail through this turbulent situation.

John Paul further suggested that banks should also come forward to increase vehicle/personal loan limits for the customers, including 100% on-road funding for vehicle purchases. Likewise, the Government should take steps to reduce the service charge levied by the banks for credit card transactions, which will go a long way in minimising cash transactions.

[mayankk]

So is this a good time to pick up a good storme, with all papers available, and checked by a trusted mechanic from a dealer? Or should I still stick to individuals?

[SmartCat]

The Govt is unlikely to be bothered much about troubles of discretionary spending consumer sectors like automobiles right now. But they can expect some sort of financial stimulus in the next year's Budget

[vrprabhu]

Originally Posted by mayankk

So is this a good time to pick up a good storme, with all papers available, and checked by a trusted mechanic from a dealer?

I am attaching an article in today's Financial Express, Pune Edition.

FE pune 22112016.pdf

That looks like a Jag in the front - waiting for someone like you?

Originally Posted by smartcat

The Govt is unlikely to be bothered much about troubles of discretionary spending consumer sectors like automobiles right now. But they can expect some sort of financial stimulus in the next year's Budget

Hmmm... reduced sales = lesser tax collection for State & Centre. Which they hope will be made up through the mop up of black money?

Financial stimulus will come only if there is substantial drop in demand and tax collections, I guess.

BTW, smartcat, that was your '2222nd' post!!

[Born 2 Be Wild]

Originally Posted by mayankk

So is this a good time to pick up a good storme, with all papers available, and checked by a trusted mechanic from a dealer? Or should I still stick to individuals?

Absolutely is if the owner wants to get rid of it quickly and wants to be paid in chq or dd . Till yesterday i have been seeing dealers charge exorbitant rates while tranascting in old currency with a no questions asked approach. if its a chq or dd only deal haggle for price as all dealers know that next 6 months its gonna be a slump everyone is cashing their chips at the table.

I myself have picked up a T-Fort with 46 k on the odo at a steal only because he was in dire need of Tax paid money.

[nitishk]

not sure Mods, whether this falls in the same category or should we open a new thread.

Honda Cars ties up with banks to limit demonetisation impact

[VKumar]

Originally Posted by mayankk

So is this a good time to pick up a good storme, with all papers available, and checked by a trusted mechanic from a dealer? Or should I still stick to individuals?

This is indeed the right time if you have enough of the money ready with you in any color. If it's a dealer who wants only white money, then he must be knowing that the future isn't much bright, so he will be willing to negotiate a bit more than he would have done before 9th of November.

Originally Posted by Born 2 Be Wild

Till yesterday i have been seeing dealers charge exorbitant rates while tranascting in old currency with a no questions asked approach.

Indeed it is going on in NCR. A few dealers are now sitting without a single vehicle in inventory, just because suddenly a large number of customers appeared out of nowhere; for purchasing the cars in the exchange for older/demonetized currency.

I myself have picked up a T-Fort with 46 k on the odo at a steal only because he was in dire need of Tax paid money.

Congrats, I am also in the queue as of now.

[SmartCat]

Interview with Jnaneswar Sen, Senior VP, Honda Cars India on demonetization & its effects on CNBC TV18:

- 10 to 15% fall in foot falls since Nov 8th
- Expected 15,000 bookings in November. But we might see 40% lower bookings.
- Some states more affected than others. Reduction in foot falls & bookings not uniform.
- Tied up with a few banks. Will provide 100% loan to customers
- Enquiries/sales from salaries class at normal levels.
- Dealer stocks normal. Inventory buildup not alarming at factory
- No discounts planned.
- Demand has been postponed, not lost. So no production cut planned.

[torquing_points]

Went to the Volkswagen showroom. They have in fact changed their tune in reverse -- they have INCREASED interest rates. Offered 9% on Jetta, whereas website says offer for 4.99%. Dealer said that there is a lot of demand for financing.

[RSR]

Automobile dealer fraternity supports the Government’s move to demonetise Rs. 500 and Rs. 1,000 currency notes.

That must be the most half-hearted or even quarter-hearted support of the demonetisation move!!!

I guess one really cannot blame the dealer lobby FADA. They are caught in a catch-22 situation for now. They cannot rejoice at the demonetisation process (obviously!) for it certainly seems to have led to a huge drop in footfalls, enquiries and sales. Nor can they condemn the demonetisation move in the strongest terms, because (apart from giving it a political hue) it would let the cat out of the proverbial bag!

Yep, condemning demonetisation of the 500 & 1000 rupee notes would be tantamount to admitting what a lot of people already know, but very few would dare to admit - automobiles (especially the more expensive ones) are one of the preferred parking spots for unaccounted money within India after real estate and jewellery (not taking into account the overseas avenues that remain the privilege of the bigger fish).

All cash transactions for automobile purchases are a way of life, and even encouraged by dealers (by providing additional discounts/freebies, quicker delivery etc.) Most dealers have high volume cash counting machines as part of their office stationery.

Of course, it's neither illegal nor unethical to purchase an automobile by making full payment in cash. That's how the majority of two-wheelers are purchased today. Four-wheelers see a greater percentage of other modes of payment, but all cash transactions still constitute a significant part.

The 1% TCS for purchase of cars costing more than a million rupees was intended to ensure those making such purchases do not fall outside the tax net.

Well, many dealers (especially of luxury cars) are known to "help their esteemed customers" avoid paying higher road tax by getting such cars registered in neighbouring UTs (despite the requirement of proof of residence). Can one be sure that they will not "help their esteemed customers" by similarly playing around with the 1% TCS???

It begins with a desperate-sounding plea from the dealer lobby FADA to banks and manufacturers. Let's see if it builds up into indirect threats from certain manufacturers (who've done the same not too long ago).

[dZired]

Car makers adopt e-payments to minimise demonetization effect

As a measure to tackle the slump in business post the Government of India's announcement on demonetization, various car makers have partnered with banks and third-party e-wallets to provide cashless transaction facilities to their customers.

Renault India is offering cashless transactions for new car customers as well as for those availing after-sales services. The company is offering new customers a choice to pay their booking amounts via PayTM and HDFC PayZapp e-wallets. Existing customers are also being given the option of paying through cheques, demand drafts, e-wallets, debit or credit cards and instant fund transfers for availing after-sales services. Additionally, the automaker has announced a 100% finance scheme for all its cars.

Nissan and Datsun are also offering similar cashless transaction facilities to customers. They are even providing free towing facilities for cars that are under warranty or extended warranty.

Honda has also announced its partnerships with HDFC, ICICI and Axis Bank for providing 100% finance options to prospective customers.

All these steps are being taken to give a slight push to the new car industry, which has been reported to have recorded a 30% drop in sales in the current month. The Federation of Automobile Dealers' Association (FADA) recently released a statement to all major OEMs, mentioning that the entire auto retail trade has come under severe stress post demonetization. FADA has urged vehicle manufacturers to reduce inventory at dealerships and partner with banks for financing options in order to provide added support to dealers.

Source: ET Auto

Link to Team-BHP News

[dheepak10]

My NEXA dealer, even before demonetization, informed me that they prefer payment through RTGS or through Cheque, rather than cash.

Tying up with 3rd party payment vendors is just co-promotion, in my opinion.

[VKumar]

Originally Posted by smartcat

- Tied up with a few banks. Will provide 100% loan to customers

Indeed, the manufacturers are taking this route now a days. There are Mahindra ads like "Buy car for 101 rupees". One from Hyundai in today's The Times of India:

Finance by three banks and none of them a PSU!

[sgiitk]

Theoretically it should be zero, since one cannot buy a car for cash. However, what I hear on the grapevine is that many people buy cars on finance, and then pay off the loan quietly in cash. So these chaps are now out.

[rrsteer]

Originally Posted by smartcat

But they can expect some sort of financial stimulus in the next year's Budget

It should come. In the form of reduced income taxes. Provided of course demonetization is treated by the public at large as was being expected by the government.