Automobile dealerships continue to face tough times: ICRA

Mumbai: Automobile dealership is among the worst impacted segments within the entire automotive value chain across the country due to poor demand amidst the Covid-19 pandemic, according to the findings of ICRA.
As per ICRA, after witnessing a sharp 75 per cent to 90 per cent decline during Q1 FY2021 across the automotive sub-segments, wholesale dispatches are on recovery trend with certain segments like two-wheelers (2W) and passenger vehicles (PV) registering year-on-year growth in the wholesale volume during September.
However, retail demand continues to remain weak, indicating wholesale dispatches is resulting in inventory build-up at dealerships, it said.
Giving further insights, Ashish Modani, vice-president & co-Head at ICRA, said, “We surveyed 19 dealerships, across the PV, 2W and the CV segments with presence in the rural, semi-urban and the metro areas. Overall the response indicates that sentiments remain cautiously optimistic with most dealerships expecting flattish to moderate growth trend in the upcoming festive season. Most players (58%) are expecting a flattish (±5% Y-o-Y) performance during this period and none of the participants projected over 10% growth during the season.”

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