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Old 3rd June 2019, 13:33   #121
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Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

Any Industry slow down especially an industry like Automotive is not good news for the economy. There are thousands of other ancillary industries dependent on the Auto industry and with it tens of thousands of job's.

Saying that, the above was expected, the roads are over crowded, cars are getting more and more expensive be it inflation or greedy manufacturers. With the increase in the cost of cars the ownership cost also increases (Insurance, service etc). Its impossible to drive a car daily in Mumbai without high BP so a driver has become a necessity which is an additional cost.

I have a Jazz V-CVT 2015 which has done 20000 kms in 4 years and a 2016 Isuzu Vcross which has done 36000 kms. The itch to upgrade is there but I don't see any worthy upgrade which is value for money. A replacement for Jazz cannot be justified and any upgrade for V-cross will end up in 30+ lac category. Even the current V-cross has become a lot more expensive. Not that I cannot afford its just that I don't see a value of doing so.

Gone are the days when arriving to a club or nice dinner place in a cab was embarrassing. With the strict following of no drinking and driving, I have not taken my car to a night out in last 5 years. I find more value in uber/ola than paying my driver Over time.

I would normally change my cars in 4 years but considering above factors I don't think I am changing my cars anytime soon.

As a marker on how economy is doing, I would look at commercial trucks and bus sales. A slow down there would be a better indicator of slowing economy.
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Old 3rd June 2019, 14:01   #122
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Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

I believe the slowdown is also on account of the woefully inadequate civic infrastructure. Recently, I opened an office in blr and also rented an apartment that I would use for 15 days in a month. I soon realized that I need to have a car in blr since cabs are simply not reliable.

While deciding which car to buy, I realized that the ridiculous road tax, coupled with traffic/parking woes means that I would retain my sanity a wee bit longer if I did not by a big car in blr. hence I picked up an ecosport AT a few months back.
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Old 3rd June 2019, 15:00   #123
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Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

The slowdown could be cyclical with a number of factors at play like the Elections, imminent introduction of enhanced safety standards & Euro VI emissions.

I personally think that there is a dramatic shift in mobility due to the app based Taxi services. I recently had to rush to Chandigarh as a relative had a medical emergency - I drove down to Chandigarh in my own vehicle, parked it & over the next 3 days just used Uber for all the running around i had to do in support of the sick relative. Convenient & easy, with rides available within 5 minutes all over Chandigarh, even late at night.

Why would I want to drive myself with hassles of traffic, parking etc when such an easy option exists? And if I don't want to drive, why would I want to upgrade my car or even buy another one?
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Old 6th June 2019, 08:27   #124
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Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

Vehicle sales in higher per capita income states such as Maharashtra, Gujarat, Delhi and Karnataka are shrinking faster than the industry average.

Tapering demand from taxi aggregators and rising saturation among passenger car owners has hit vehicles sales growth.

Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost-69670123.jpg

Quote:
The penetration of passenger cars per 1,000 person in Delhi, Gujarat, and Maharashtra is at 98, 35 and 29, respectively, compared with India’s average of 21
Quote:
The biggest slowdown in vehicle volume was in Maharashtra, followed by Gujarat and Delhi. Maharashtra is the largest market for passenger cars and MHCVs and second largest for the two-wheelers after Uttar Pradesh. Passenger vehicles volume in the state fell in three out of the four quarters of FY19, and two-wheeler volume slipped 30% in March quarter, the second highest after Gujarat.
Link

Last edited by volkman10 : 6th June 2019 at 08:30.
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Old 6th June 2019, 23:15   #125
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Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

I am trying to upgrade both my car and bike for some while now but I have been putting it off for some time.

1. The bad buyback resale values offered by dealers / organized players. Take for example my scooter which I have been thinking of selling to get a good bike. For a 4 year old vehicle run just 20000 KMs and which costed 70K in 2015, I am being offered 11000 rupees. That's a shocking 86% depreciation.

2. I could sell it in the open market but 90% buyers won't transfer ownership and its hard to get buyers to agree to the condition. The law puts all blame on the seller and no liability responsibility on the buyer. How stupid is that, plus the name transfer has to be carried out at the buyers RtO, again moronic.

So until my vehicles breakdown to the point of no repair, I prefer using my existing vehicle.
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Old 7th June 2019, 14:45   #126
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Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

Quote:
Originally Posted by Durango Dude View Post
The automakers have gone rather greedy with their downsized and under powered engines and their greedy asking price.
Spot on!!

I was looking for a vehicle which was app 6L OTR and after 3 years 10L.
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Old 9th June 2019, 09:47   #127
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Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

Mahindra and Mahindra (M&M) will be halting production across its plants in automotive and farm equipment sector for upto 13 days in the ongoing quarter to adjust to the market demand.

Mahindra is one of the few manufacturers who has shown a YoY and MoM growth for the month of May, 19. I guess, the above decision shows that dealers are sitting on large stockpile.

Link to news https://www.moneycontrol.com/news/bu...r-4076221.html
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Old 10th June 2019, 08:23   #128
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Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

Auto companies restore to plant shutdowns as demand remain sluggish and inventory at plant and dealer level piles up.

Quote:
Dealers are the worst- hit by the inventory that is as much as 50% more than normal, as they have to pay GST on even the unsold vehicles.
Quote:
Car and two-wheeler cos to shut plants for several days this quarter to reduce unsold inventory.
- More than half a million passenger vehicles worth $5 billion (nearly Rs 35,000 crore) are lying unsold in dealerships at the beginning of June.

- In the two-wheeler segment, the number is as high as 3 million, valued at about $2.5 billion.

- Seven of the top 10 passenger vehicle makers, including Maruti Suzuki, Tata Motors and Mahindra & Mahindra, have announced plant shutdowns between May and June.

Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost-1.jpg

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Last edited by volkman10 : 10th June 2019 at 08:30.
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Old 16th June 2019, 07:45   #129
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Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

Not directly related ..

but seeing even the mighty Fortuner
being advertised (never seen earlier)

on a Sunday edition shows that the industry is really getting desperate.

Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost-image-5.png

Long live competition!
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Old 16th June 2019, 10:59   #130
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Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

Car Makers are also to be blamed. We bought our first car in the 80s and till date, they continue to sell cars the same way. In fact, it's worse! Car showrooms are located in densely populated areas and the test drive is a joke. The sales department is filled with low-paid, passionless people. Regarding showrooms and how they sell, there is zero innovation or excitement in that space. So the law of evolution deems that they just die out! They're just waiting for a revolution to happen so they can copy that (maybe online sales).
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Old 18th June 2019, 08:40   #131
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Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

Some discussion worth listening:

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Old 18th June 2019, 10:26   #132
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Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

Quote:
Originally Posted by tbppjpr View Post
Some discussion worth listening:
So Mr Subbu thinks that every time the govt increases the taxes, the auto industry should drop prices to compensate. Already half the amount you spend on buying the car goes to the govt as various taxes. Govt is the biggest vulture among us and then we have statists telling us to feed the vulture even more.
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Old 18th June 2019, 17:15   #133
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Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

When the going was good, manufacturers were more than happy to raise the prices in Jan and July in the name of "Raising input costs" and did not give a damn about not passing the entire GST benefits to the customer. Why on earth should the GST component be reduced or a bailout is provided out of tax payers money when the going gets tough?

They can either:

1) Survive these turbulent times with their "Rainy day" funds. Or
2) Give up their ego and slash the prices. Or
3) Sink and die.

Tax payers money should not be used to bailout luxury industries nor is there a need to reduce the GST component and lose out on revenue.
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Old 18th June 2019, 18:21   #134
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Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

Quote:
Originally Posted by arunramaswamy View Post
...
Tax payers money should not be used to bailout luxury industries nor is there a need to reduce the GST component and lose out on revenue.
I agree on the bailout part but consider that the GOI earns huge revenues on car sales. When sales drop, so does the tax revenue. At the same time, I think that car makers need to share the burden of the government by cutting prices. After all, they have made plenty of hay when the sun shined.

The GOI also has a moral obligation to protect the workers of this sector who contribute income tax. Although the products this industry produces are meant for the well-off, there are made by lakhs of the not so well-off.

So this is a very tricky situation that the government needs to handle sensitively. The demand of reduced GST is justified but it needs to be carefully considered from the social angle. It would be indefensible if after receiving government incentives, car makers still cut a lot of jobs.

Last edited by Motard_Blr : 18th June 2019 at 18:22.
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Old 18th June 2019, 18:29   #135
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Re: Slowdown bites hard: 205 dealers shut down, Rs 2000 crore losses & 3000 jobs lost

Quote:
Originally Posted by Motard_Blr View Post
The GOI also has a moral obligation to protect the workers of this sector who contribute income tax. Although the products this industry produces are meant for the well-off, there are made by lakhs of the not so well-off.
Thank you very much for highlighting this point. I agree that many livelihoods are dependent. What pains me the most is the dealers, who have got nothing to do with this mess, is facing issues with bloated inventory.

Exactly why I would like the manufacturers to make the first move of bringing down the prices. Then approaching the government makes sense. Until then, I feel there should not be any support from the Government unless the manufacturers comes up with some sort of viable plan to revive the industry.
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