Honda Motorcycle and Scooter India announces Rs 1,700 cr support package for dealers
HMSI also said that it will take back the unsold units of Bharat Stage IV (BS-IV) inventory lying with a few dealers in the Delhi-NCR region.
April 09, 2020 / 03:04 PM IST
Honda Motorcycle & Scooter India (HMSI), India's second largest two-wheeler maker, has made advance payments of incentives and reimbursements as part of the Rs 1,700 crore package to help its dealers, suppliers and service providers tide over the coronavirus-induced lockdown period.
The maker of models like Activa, Shine and Unicorn joins companies like Maruti Suzuki and Honda Cars India to announce financial support packages for its partners.
HMSI also said that it will take back the unsold units of Bharat Stage IV (BS-IV) inventory lying with a few dealers in the Delhi-NCR region and will also entirely bear the interest cost of BS-VI inventory (physical and transit).
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With its unprecedented scale and subsequent nationwide lockdown, COVID-19 has severely impacted the business continuity of dealers, who were already under immense pressure due to the 16-month-long demand industry slowdown. About 300 dealerships closed business in 2018-19 and the number for 2019-20 is expected to be at least 500.
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"The support package will effectively provide immediate liquidity to our dealer partners and we are confident that it will comprehensively ease their business continuity anxiety and improve cash flow. Providing yet another major support, Honda shall also bear the interest cost of the BS-VI vehicles inventory at all its dealers for the entire 21-day lockdown period," said Yadvinder Singh Guleria, Director – Sales & Marketing, HMSI.
Earlier this week, Honda Cars India had said that all pending payments of dealers were cleared in March. Additional support in the form of releasing advance payments to help dealers with cash flow was also done. In normal business flow, payments are made to dealers as claims after the sales month. The company has also given support on interest cost of fresh stock available with dealers before lockdown.
Also Read: Maruti Suzuki announces service, warranty extensions to support customers
HMSI closed last year with a fall of 15 percent in domestic volumes to 4.7 million units as against sales clocked in 2018-19. HCIL recorded a drop of 45 percent to domestic sales of 102,016 units during FY20 as against FY19.Follow our full coverage here