A few hundred brand new cars and SUVs that were partially or fully submerged in the low-lying stock yards of automobile dealerships across Kerala in the recent floods will shortly be up for sale at heavy discounts, or sold as scrap.
This brings back memories of 2013 when 250 SUVs of an automobile brand parked in its stockyard in the immediate suburbs of Ernakulam were inundated, many of them up to the roof.
“Most of these vehicles were sold at 50% discount after they were cleaned and repaired, to a dealer outside Kerala. The ones that suffered minor damage were sold with warranty cover, while vehicles that incurred more damage were sold sans warranty,” sources in the dealership said.
Demo cars
A few of these vehicles were inducted by dealers as demo cars, while some others were sold to staff at half the selling price or to rent-a-car firms, they added.
In the wake of floods, car manufacturers send their team to assess the damage. They block sale of such vehicles. Thus, dealers sell such cars as used cars, with or without warranty cover.
The overall expenses of vehicles caught in the floodwaters are met from insurance cover of stockyards, which covers natural calamity, floods, and burglary.
Scrapped for parts
As a norm, car dealerships shortlist vehicles flooded above the steering level for being sold as scrap.
Scrap dealers and their agents often descend in flood-ravaged places across the country to buy such vehicles from which they salvage spare parts, body panels, tyres, etc., which are routed to the second-hand market.
The recent floods caused inundation of a couple of car stockyards in the suburbs of Kochi - at Aluva, Muvattupuzha - and also in Thrissur, it is learnt. Both the dealer and the manufacturer suffer loss when the stockyard or dealership is flooded.
Festival season
This time, most dealers had around 30% more stock of brand new cars, foreseeing an increase in sale during the Onam festive season that extends from July to September, said Rajwanth Ben, director of an automobile dealership firm in Kochi.
“The insurer pays only for tangible damage, while it may take up to two months for affected dealers to bounce back. On their part, manufacturers would have spent big sums on marketing,” he said.
While there will be many who are keen to purchase new cars that are being sold at huge discounts, there will be others who will go the extra mile to ensure that the car they intend to purchase was not caught in a flood situation, he added.
