Car dealers across India reopen

Mayank Dhingra

After the second round of lockdown in nearly three months from April to June, Indian auto retail showrooms resumed operations, and most states lifted restrictions.

About 90% of car dealers have resumed operations in India
In some states, distributors are only open to customer deliveries
Auto retail classified as MSME is considered active

Although nearly 90% of car dealers nationwide have fully resumed sales and service operations in compliance with Covid safety guidelines, the showrooms in the states of Kerala, Andhra Pradesh, Orissa and Jharkhand account for Indian car retail 8-10% of the population continue to remain partially or completely closed.

It is estimated that there are more than 15,000 car dealers and 26,500 dealers in India, employing approximately 4 million people in showrooms and service centers. Ninety percent of dealers return to work, which means that approximately 23,850 dealers are open.

“In Odisha and Jharkhand, where there are operating time constraints, dealers are only delivering to customers and not opening to business,” said Vinkesh Gulati, chairman of the Federation of Automobile Dealers Associations (FADA).

According to Gulati, despite restarting operations, the situation is far from normal. “If we compare this situation with the situation in June or July 2020, maybe our situation will be better, but the business is still not what it was before the pandemic.”

“The rate of new orders has slowed down, which clearly shows the demand situation in the market. However, when almost all dealers open next month or at the end of July, the situation should be greatly improved,” he added.

FADA Chairman praised the classification of all automotive retail businesses as MSMEs

In this difficult stage of the business environment, the FADA chairman is pleased with the government’s recent move to classify all retail and trade businesses in the country as MSMEs (Micro, Small and Medium Enterprises).

“Although auto retail was considered a part of small, medium and micro enterprises before 2017, it was limited to auto services and two-wheeler retail after that,” Gulati said.

On July 2, Nitin Gadkari, Minister of Micro, Small and Medium Enterprises of India, announced that passenger vehicle retail, parts trading, tractors, off-highway vehicles and commercial vehicle retail are now counted as small, medium and micro enterprises.

Gulati pointed out: “This allows car dealers to accept many benefits and subsidies provided by different states for small, medium and micro enterprises.”

For example, benefits include subsidies for the purchase of land from state-owned industrial development companies, and preferential loans from banks at lower interest rates.

When signing, the FADA chairman said: “Given the pandemic business situation, these support measures are a great comfort to the entire automotive retail industry.”

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