[DreamsUnlimited]

Gotta feel for the people involved. This is a collateral damage of a major shift in consumer habits. With all the infrastructure issues, exorbitant car prices and ready availability of app based options, car ownership is becoming more of a burden than pleasure. Car companies are still underestimating the disruption caused by the apps and there is hardly any incentive to buy a car, worst still, the prices are going through the roof.

[Autolock123]

Originally Posted by pganapathy

If you actually do the math on it, an old car will net less emissions overall. Producing a car is fairly polluting and it really needs a new car to run a lot of kilometres before the emissions are less than the overall emissions of the old car

The ban is to reduce the pollution in cities, in order to achieve that older cars have to be removed from roads.

The lifecycle emission that you are talking is definitely important but, would require a much broader approach. Our urgent need is to protect cities and health of people and hence i think 10 year ban is much required step.

In case you have any stats on comparing the life cycle emission of BS III car vs BS VI car please do share. It should be an interesting read

[51morris]

As someone already mentioned, "apps based taxis" is one of the reasons for this slow down, methinks. But then, the reason why so many people prefer these taxis is because of the increasing congestion on the roads. I have a colleague who moved to India from the US. He's been in India for about 7 years now and has not bought a car. He's very happy using Uber/Ola for all commuting needs.

[Autolock123]

Originally Posted by 51morris

As someone already mentioned, "apps based taxis" is one of the reasons for this slow down, methinks. But then, the reason why so many people prefer these taxis is because of the increasing congestion on the roads. I have a colleague who moved to India from the US. He's been in India for about 7 years now and has not bought a car. He's very happy using Uber/Ola for all commuting needs.

Using shared mobility is increasingly becoming the mode of transport in Metros and Tier I towns, but if you look at the auto sales, Metros and large Tier I towns growth rate has not been very high in recent past. It is the Tier I and Tier II towns who are contributing towards the incremental volumes that we have witnessed.

No doubt, it is impacting the sales but my estimate is it is minuscule..We are yet to reach that point where the impact to volumes due to these alternatives would be significant.

[Thermodynamics]

Staggering 350,000 Lay-Offs since April in Auto Sector per this report.

[virgovencat]

What goes up has to come down :-)

During last few years this industry has seen good growth ! In my view this down trend will help stabilize the sales. No doubt its really sad for people who have lost jobs due to this lull phase. I agree to earlier post, most consumers don't even know about the BS VI norms which will be applicable in 2020. Manufacturers should use this phase to forecast accurately for next few years.

[Maveryq]

Another perspective on the changes occuring in the Automobile sector. This is a column by Harbir Singh and his views on diesel are very interesting. Dont agree with his over all world view though.

[ajmat]

• Nissan had the most shutdowns with 44 dealer outlets closing in the 18-months through April 2019
• Hyundai closed 39 dealerships during the period as overall customer orders fell despite robust demand for its recently introduced Venue compact SUV

Brilliant article in The Mint today

Full report here

Some significant quotes:

Fada, which represents about 15,000 dealerships and 26,000 outlets across India, said a total of 286 dealership outlets downed their shutters in the 18 month-period.

The closure of retail outlets along with manpower downsizing across the 26,000 outlets has resulted in losses of about 200,000 direct and indirect jobs during the May to July period, adding to the 32,000 people who lost their jobs in the prior 18-months ended April, said Ashish Harsharaj Kale, president, Fada. He said the 26,000 dealer outlets employ about 2.5 million people.

Some lame responses

“While we have had 25 outlets closures in the last one and a half year, at present, we have over 270 touchpoints across 220 cities and will continue to strengthen our presence across the country," said a spokesperson for Nissan India.

S.N. Barman, vice president, sales and marketing, Tata Motors (TML) said, “During these 19 months, we have severed our relationship with 22 dealer principals. This was primarily done due to non-compliance with TML business objectives, customer interests and market coverage.

[gjnnbagal]

Originally Posted by aravind.anand

I think a majority of these shut downs and job losses might have come from GM shutting shop in India, and DSK-Benelli getting wiped out among two wheeler manufacturers.

GM decided to stop selling Chevrolet branded cars in India by the end of 2017, per se they are not shutting shop in india, they still have Talegaon facility operational and use it to export vehicles to Mexico and South America. The move to stop selling Chevrolet branded cars in India comes after GM's efforts at expanding its market share in the country failed to make much traction, which was indirect result of their stubborn pricing and unwillingness to keep up with the competitors offering leading to poor sale.

This story is different from current auto industry slow down which is cumulative effect of higher tax rates under new GST, poor rural economy, liquidity crunch among non banking finance companies and shadow banks which have suddenly slashed lending the money. Not to forget steady growth of ride sharing firms.

Also I'm confused, when did DSK Benelli topped two-wheeler sales chart in India, making their exit so much of a concern to current auto industry slow down

[wheelguy]

So this man Urvish Shah quits his job to open a new dealership amidst all this slowdown and turmoil! Looks at it as an opportunity to acquire a dealership at the least possible price.

New Delhi: Amidst the worst slowdown ever when hundreds of dealerships are closing down, 37-year-old Urvish Shah chose to quit his stable job and venture into the dealership business. According to the Federation of Automobile Dealers Association (FADA), over 280 dealerships have been closed in the last few months across India. Shah used the downturn to his advantage and fulfilled his long time wish to become a dealer, as he could acquire a dealership at best cost. He bought a Tata Motors’ Riya Autolink, which was set up six months before he took it over in April 2019. The erstwhile owner was his acquaintance who was shifting to the US and was winding up the business here.

“If the industry is at its peak, no one would sell his dealership. I believe that to enter into the automobile industry during down time is a golden opportunity that I was getting to put my foot into the business,” Shah told ETAuto.

The dealership was in Ahmedabad’s Bopal area. In the last four months, he has already expanded his business into three outlets and expects to add another one in September. Shah took some loans and used his savings to fund the expansion. Now, the first outlet is in Bopal, which is a sales, services and spares (3S) facility. The remaining two are in Surendranagar and SG Highway, which have 1S facility.




Even though it is too early to brand his venture a success, but looking at the pace we have no reasons to snub his efforts. So, what yielded this confidence in him is his 18 years of work experience at various dealerships, which concluded with his last stint as CEO of Ahmedabad-based Concept Motors.

“I have been passionate about automobiles since my young age. I didn't think twice before entering into the automotive business when the opportunity came to set up Riya Autolink in Ahmedabad,” he said.


With about 70 employees, the dealership is currently trying to focus on PSUs and government department apart from other initiatives. He also stated that one of the perks of owning a dealership in Gujarat is the youth customer base. The state does not have a prominent presence of ride sharing platforms like Ola, Uber which makes owning a car the most viable option to commute. Going forward, Shah wants to opt for a multi-brand dealership after stabilising his current business. He will consider investing in Hyundai and Honda as he has worked with these brands quite closely in the past.

Further, with a monthly turnover of Rs 6.5 crores and sales upto 65 cars during the slowdown, up from 30-40 units of average sales by the earlier owner, Shah claims Riya Autolink to be among the top dealers of Tata passenger vehicles in Gujarat. “Once the season is up, sales will be around 100-110 cars,” he added.

“Our main focus is on walk-ins because it constitutes the largest chunk of the sales pie at 25 per cent. If the customer is actually walking into the showroom, there is a high chance that they are a sure shot buyer,” he said.

For scaling up the sales, Shah takes the benefit of Tata Motors’ ‘Upgrade Policy’. By researching on the database from OEM and contacting through robocalls, his team is working on the customer sales output.

“For sales, I have also linked up with lots of digital platforms to get search trends. I get lead sources with a specific focus that help in conversions,” he added.

To build a strong relationship with customers, his team takes a step further and involves in various activities such as referral schemes, customer meets and one-on-one interaction.

“I learnt in a recently held customer meet that young buyers are contributing a large part of the total sales as they are earning well and want to live a lavish lifestyle. So unlike earlier, now these first time buyers are opting for higher segment vehicles rather than going to entry segment,” he added.

Recalling the year 2002 when he ventured into dealership as a Sales Executive for Maruti Suzuki, Shah said, "The only thing that drove me to take this decision was my passion for automobiles and my father’s dream of watching me have a stable career choice with a corporate job.”

An MBA in Finance and Marketing, Shah learnt the knitty-gritty of car retailing by working in renowned dealer firms like Cargo Motors, Landmark Honda and Concept Motors. But Shah realized early in his career that setting up a four- wheeler outlet required a higher capital outlay. “Overall I had put in close to a single digit investment in crores in this business venture,” he said.

Going forward, Shah said that he is expecting the retail sales to go up by 125 cars during the festive season. In the long term, he is considering to expand the dealership out of Gujarat as well. Further, while the OEM's sales target is 60 cars a month, Shah is eyeing to sell 80 cars for the same period.

“I am targeting a turnover of Rs 100 crore for the current financial year, FY 2019-20. To achieve this, I will have to get through my personal targets first,” he said.

Talking about the BS-VI challenge, he said that he has already stopped stocking any diesel cars.

Source: ET Auto

[StarrySky]

Originally Posted by Maveryq

This is a column by Harbir Singh and his views on diesel are very interesting.

I am not sure why he wants to blame EU for our own pollution problems. I think the the diesel car problem in India has its root in wide difference in petrol-diesel prices until a few years back combined with more fuel-efficient diesel cars. This lead to almost everyone going for diesels, no matter how much or how little their usage was. Lately, we have seen the trend reverse due to shrinking price difference between petrol and diesel and widening price difference between petrol and diesel powered variants of the same car, prompting people with lower running to question if they actually save or lose money by going for a diesel.

[V.Narayan]

One of the most important root causes for the slow down in the auto sector is to be found in the NBFC sector. The NBFC sector financed consumers and builders/manufacturers of two major industries - housing and auto. With the debacle of ILFS and Dewan Housing the market has got spooked and sources of funding for NBFCs have dried up in turn leading to fewer loans available to consumers of cars and homes. The ailing we see in the auto sector is equally prevalent in the home building segment only there is less visibility in the papers. The banks have cash but are scared of lending due to difficulty in exercising their securities - this challenge existed in India always just that with the tide going out everyone is more bothered about it. And in case of PSU banks the ever present threat of the three C's - CAG, CBI, CVC who will question sane decisions gone sour ten years later.

Also the auto industry does have overcapacity especially where cars go - but I do not have data on the tip of my fingers to back that up.

For the hapless folks who are losing their jobs it is a nightmare which only one who has lost a job overnight or a business wallah who has faced bankruptcy can understand.

[ViruKM]

Is the slowdown a good thing for the environment?

[locusjag]

Originally Posted by ViruKM

Is the slowdown a good thing for the environment?

I'll go off on a tangent to reply to your question - after 9/11 happened, every aircraft on earth was supposed to have been grounded. According to Jeremy Clarkson, the earth's temperature went down immediately by 1 degree Celsius.

So yes, I would say that any slowdown in activities by humans does a bit of good to planet earth. As Agent Smith put it so eloquently in 'The Matrix' to Morpheus, we are the scourge.