Dealerships feeling the heat of slowing cars sales


Almost all major car manufacturers in India have registered negative growth in the last month. Dealerships are also feeling the heat of slowing car sales and some are even struggling to stay afloat. 

According to a media report, on average, two car dealerships have shut down every week for the past 2 years. Over 205 dealers have closed down, while 300 dealer outlets of passenger vehicles, two-wheelers and trucks have gone out of business resulting in an estimated 3,000 people losing their jobs. The automotive retail sector, as a whole, is estimated to have incurred losses of at least Rs. 2,000 crore.

Maharashtra and Bihar saw the maximum closures at 56 and 26 respectively. 26 showrooms in Mumbai, 21 in Pune and 10 dealerships in NCR have already shut down. It has been reported that 38 Nissan, 23 Hyundai and 9-12 dealers each of Maruti, Mahindra, Honda and Tata have shut down.

In addition to a drop in sales, it is believed that higher rental costs, employee costs, falling margins from insurance and finance companies and liquidity crunch following the introduction of GST have affected businesses.

Source: Economic Times

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