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Coronavirus lockdown | 20% auto retailers open shop, but business remains slow

Besides movement curbs, loss of jobs, pay cuts and priorities on savings have led to muted response from customers

May 08, 2020 / 02:40 PM IST

Close to 20 percent of auto retailers or 3,500 outlets and workshops have opened shop this week in compliance with Home Ministry guidelines after the lockdown was relaxed, and 50,000-60,000 employees in the sector are now back to work, with social distancing and sanitisation practises in place.

Customers, however, are absent, as restrictions on non-essential movements - especially in cities (which are red zones) - continue, The Economic Times reported. Besides movement curbs, loss of jobs, pay cuts and priorities on savings have led to muted response from customers, it noted.

Maruti Suzuki has opened 680 dealerships till May 6 and is seeking permission to open another 1,220 outlets while the remaining 500 - which are in containment zones - remain shut. So far, only Goa, Karnataka, Delhi and Kerala have allowed dealerships to open regardless.

Shashank Srivastava, the executive director (marketing and sales) at Maruti Suzuki, told the paper that, till May 7, the company had sold 300 vehicles via contactless deliveries. While these were mostly prior booked orders, he was still optimistic as there have been some walk-ins and enquiries.

Notably, the company has not had many cancellations of prior orders and has reached out to 150,000 potential buyers. Srivastava also noted that there is a definite shift in customers wanting to move from public to personal transport over health concerns – which would likely trigger future demand.

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Suzuki Motor Corporation also recorded a 15-16 percent surge in web enquiries compared to the volume of such requests before the coronavirus pandemic. Such enquiries prior to the lockdown were 3-4 percent, it said.

Besides Maruti, Hyundai has also begun delivering vehicle orders booked during Navratri and Gudi Padwa. It has retailed 170 cars till week. The South Korean giant has opened 255 outlets, and said it received 4,000 enquiries and 500 bookings so far.

Ashish Kale, the president of the Federation of Automotive Dealers Association, has told the paper that no one knows when the recovery would begin. “Revival will strongly depend on the support package from the government and the extent of it and even the initiatives and support from the vehicle makers,” he added.

Hero Motocorp and Mahindra & Mahindra dealer Nikunj Sanghi, said they received requests for cancellations for vehicles booked earlier, adding that they have asked customers to wait till lockdown ends on May 17.

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Moneycontrol News
first published: May 8, 2020 02:40 pm

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