Tiruchirapalli

Slump in auto sector leaves dealers stranded

Two-wheeler and four-wheeler showrooms in the city are seemingly going through stagnation in business reflecting the nation-wide slump in the auto sector.

The managements are a worried lot as there is as yet no indication that satisfactory sales volume could be achieved during the festival season.

‘The money is locked in the unsold stock. The sales being so dismal, we are not able to place any orders for new consignment of vehicles,’ said Vijay, Manager of a two-wheeler showroom in the city.

And, there are other consequences. The dealers face the ignominy of being seen in poor light if they do not reach the targets set by the companies.

In just a matter of months, the unexpected slump in the auto sector had pushed them into a predicament of facing heavy losses, on account of payment of rent, salaries, meeting overhead expenses, and, most of all, losing out on the back interest on the value of the unsold vehicles.

There are already instances of showrooms laying off scores of workers in the services section, N. Kanagasabapathy, president of Tiruchi District Tiny and Small Scale Industries' Association said.

In very many two-wheeler showrooms, sales so far during this month has been in just single digits. The case of four-wheeler dealers is worse still, said a manager of a branch of a nationalised bank which has a tie-up for forwarding loans for buyers.

The dealers are understandably bracing themselves up for a prolonged struggle as they have to contend with the impact caused by bringing in of the BS-VI regulations from April 1, 2020, to regulate emission of air pollutants from motor vehicle.

A section of buyers is in the ‘wait and watch’ mode as BS-IV compliant vehicles would soon be obsolete, it is learnt.

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Printable version | May 26, 2020 9:15:32 PM | https://www.thehindu.com/news/cities/Tiruchirapalli/slump-in-auto-sector-leaves-dealers-stranded/article29393491.ece

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