Indian automotive dealers starting to reopen as lockdown eases

11, May. 2020

FADA President Ashish Harsharaj Kale giving a speech at the 11th Auto Summit 2020 in New Delhi on Feb 7, 2020. (Photo courtesy of  FADA)
FADA President Ashish Harsharaj Kale giving a speech at the 11th Auto Summit 2020 in New Delhi on Feb 7, 2020. (Photo courtesy of FADA)

By Atul Ranjan

NEW DELHI, NNA - Automobile dealers across India are gradually returning to business with around 20 percent of them already reopening shutters after nearly six weeks of nationwide lockdown to stem the spread of the coronavirus pandemic.

The revival of the world’s fourth largest automobile market, which reported not even one car sold in April, follows the government’s decision to ease shutdown restrictions from May 4 to allow some businesses to restart operations under strict conditions.

“Out of over 26,000 dealer outlets, about 20 percent dealers have opened their service setups and about half of these dealers have opened their showrooms too,” Ashish Harsharaj Kale, president of the Federation of Automobile Dealers Associations (FADA), told NNA in an exclusive interview on Friday.

But automobile sales are likely to remain muted until all lockdown restrictions are completely removed which would help ensure the smooth running of the complete automotive value chain, he said.

“For any substantial sales to happen, the entire value chain needs to be up and running,” said Kale, adding that sales momentum might pick up from the next month.

“May would be the month of coming out of the lockdown blues and getting ready for business. It could only be the first week of June onward that we would see reasonable movement in the retail space provided the easing of lockdown continues,” he added.

However, the FADA president cautioned that many dealerships might even go out of business if the pandemic is prolonged and causes sales to plunge 35 percent in a worst-case scenario painted by the Society of Indian Automobile Manufacturers (SIAM), the apex national body representing all major vehicle manufacturers.

Digital push

Amid strict measures to fight the contagion such as social distancing, dealers and original equipment manufacturers (OEMs) are now going big on e-commerce to drive sales.

Kale told NNA that they are working on a “hybrid model of digital plus physical” with more emphasis on using digital platforms to attract customers.

OEMs adopting this business approach include the country’s largest passenger car maker Maruti Suzuki India Ltd., Toyota Kirloskar Motor Pvt. Ltd. and Hyundai Motor India Ltd.

Last week, Maruti Suzuki said in a statement that car buyers can explore its entire product portfolio and buy a car online. While booking their car, they could even personalize it by choosing the accessories. Documents for a purchase can be submitted digitally too.

Automakers including Maruti Suzuki and Toyota Kirloskar are also offering the convenience of delivering a car to the doorstep of the buyer now.

“To assist our customers who are home-bound, we have made provisions to entirely digitalize the sales process wherein we have a 360-degree product views for the customer to take a virtual tour of the vehicle, select financing options and even receive a quotation online,” Naveen Soni, senior vice president of sales and services at Toyota Kirloskar Motor, explained in a statement earlier this month.

Supporting their digital strategy, Kale expects the auto trade to see more online inquiries and transactions after the end of pandemic lockdowns.

India’s 40-day nationwide lockdown, which started on March 25, has been further extended till May 17. However, the government has reopened some shops, factories and offices especially in areas with a lower rate of coronavirus transmission.

India recorded 62,939 positive cases and 2,109 deaths as of Sunday evening.