Auto Industry Slowdown: 205 Dealers Shut Down in India

Auto Industry Slowdown in India: The dealer shutdown crisis is getting worse with time as last two years saw 205 dealers putting their shutters down, with many even having more than one dealership under the shutdown list. The total number of outlets closed during the period is around 300, with the number including car, two-wheeler and commercial vehicle dealerships across the nation. The loss is piling up higher than ever as INR 2000 Crore of total value has been calculated to date. The shutdown of dealerships and limiting the operations resulted in 3000 job losses in India in the 2-year period. [caption id="attachment_505604" align="aligncenter" width="850"] Maruti Suzuki Shuts Down Production for One Day[/caption] Maharashtra saw 56 dealers shutting down shops during this period while Bihar followed next with 26. Out of these, Mumbai and Pune saw maximum loss with 26 and 21 dealerships respectively. Nissan saw the biggest drop in dealership count as 38 dealers left the business while 23 Hyundai dealers were also seen going out of the industry to save themselves from further losses. Maruti, Tata, Mahindra, and Honda were the next big brands to see approx 10 dealers moving out of business during this tough time. The margins from the insurance and finance sector, along with higher than ever rental cost and staff expenses forced them to reconsider their business practice. [caption id="attachment_503962" align="aligncenter" width="850"] Auto Industry Slowdown: Maruti Suzuki Facing Tough Times In India[/caption] Maruti dealer meet has already concluded with the need to face these tough times with efficient management while others are yet to clear their stand on the situation. The upcoming BS6 emission norms will further bring a jump in prices and small cars would no more be feasible for using diesel engines in India. The shift from diesel to petrol will help the government keep emission levels lower while estimated margins for Indian dealers are said to be limited to just 2.5-5%. The international value falls between 8-12%, and that too with more initial spending estimate. Source