Commercial vehicle retail sales to kick-start gradually
Published On May 08, 2020
After partial relaxation in the third lockdown with strict safety guidelines, truck dealerships likely to start retail sales across the country. OEMs have also announced the start of productions on limited scale.
The third nationwide lockdown allowed limited business activities across the country with the guidelines of social distancing and precautions to avoid virus containment. The government has decided to allow private businesses to function as getting back the economy becomes an important priority along with containing the spread of Covid-19.
We have already reported that some OEMs have announced restarting partial production at various plants in the country. Few more OEMs are expected to resume production in the next few days. This is certainly a positive development for the automotive industry, and the whole ecosystem to get back to where it was in February.
Taking a cue from the manufacturers automotive dealerships across the country are now working with local authorities to open their outlets. This is easier said than done, as some parts of the country are still reeling under a severe increase in COVID-19 cases. Yet a necessary step to start the retail sales and get the automotive sale back on track. In some key cities and states select dealers have already opened their outlets to welcome customers.
Once dealers get the necessary permission from the local authorities, the retail truck sales are likely to kick-start on a limited scale as customers looking to purchase vehicles can visit the OEMs dealerships. OEMs such as BharatBenz, Eicher, Isuzu Motors India have started production at their respective plants also urging the retail network to resume operations by working closely with the local authorities.
Some of the large CV dealers across the country are formally working out strategies to start business activities with all the safety measures in place. After more than a month and half of shut-down, there are encouraging signs that dealerships are slowly generating some interest from the buyers. Once the complete lockdown is lifted the customers would likely to be confident to make a purchasing decision. This will hopefully help the dealers to start getting the business back. Unlike the passenger car or two-wheeler, the truck customers always consider the business activities and freight transportation scenarios before buying a truck.
Zero sales in April
The retail function is an important element in the automotive business as the OEMs production can only be purposeful if the retail sales begin and customers start to visit the dealership to purchase vehicles.
Due to strict lockdown CV OEMs have reported nearly zero sales in the month of April as the economy remains closed completely. April month was the worst nightmare for vehicle makers as both the production and sale in the domestic was halted completely. While some of the manufacturers have exported a few vehicles to select overseas markets. Sourcing components suppliers are critical for OEMs to assemble vehicles, and thus getting the supply-chain in order is equally necessary for the auto production and sale to normalise.
According to industry body SIAM, the lockdown is already crippling the automotive industry in many ways, the vehicle makers are reporting Rs 2,300 crore of loss every day due to shut-down. Zero production also impacted the government’s GST collection as automotive companies are huge contributors to the excise and other state taxes. Therefore, it is in everyone’s interest that the economy gets back to normal as soon as possible.
Also Read: Indian commercial vehicle industry sales analysis and trends forecast – March 2020