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Footfalls in showrooms down 30% due to COVID resurgence: FADA India president

Interview: Vinkesh Gulati, president, Federation of Automobile Dealers Association

Indian-auto-automotive-sector-industry-cars-traffic-representational-shutterstock Normally, April is a good month for automobile dealers and Maharashtra accounts for around 11 per cent of car sales and 12-13 per cent of two-wheelers | Shutterstock

The automobile sector was hit hard by the COVID-19 pandemic and the lockdown last year. As things were beginning to improve, automotive dealerships have been hit hard with a fresh set of restrictions in a major state like Maharashtra amid a second wave of coronavirus. Vinkesh Gulati, the president of Federation of Automobile Dealers Association (FADA), says sales are likely to get impacted for at least a month in the state and consumer sentiments are not great in other states either. He favours some restrictions like staggered timings for showrooms or restricting manpower requirements over a complete shutdown.  



At a time the automobile industry was only just recovering, fresh restrictions have been imposed in a major state like Maharashtra. What kind of impact do you expect this time?



Maharashtra is in a really bad shape for us as showrooms are closed. The government said it is not a lockdown, but practically for us everything is closed. Normally, April is a good month for us every year and Maharashtra accounts for around 11 per cent of car sales and 12-13 per cent of two-wheelers. The lockdown resonates a 30-day sales loss, because whenever the lockdown opens, the customers’ willingness to come again and think of buying a vehicle, this regularisation takes another 10-15 days. So, for us, practically, April is lost and May is also not looking like a good month. We were expecting to recover something of what we lost last year. But this lockdown is hurting us a lot.



The lockdown is going to have a huge impact on dealers. What’s the strategy that you are adopting now?  



We are again resorting to the digital front, trying to contact customers on phones and requesting them to do digital transactions. We are doing this so that at least the customers who had made bookings or shown interest don’t cancel it and whenever the lockdown opens, we can deliver the vehicle. Due to festivals like Gudi Padwa, Ram Navami, Navratri, etc, customers had shown interest. We are trying to use digital tools as much as possible to retain the customer.



How is the consumer sentiment in other states?



As of now, things are not looking good across India. The sentiment affects proportionate sales, too. Because of this surge in COVID cases, the sentiment is not very positive. What we are seeing is that inquiry level or footfall in showrooms is down around 30 per cent, if you compare with March figures.



This is only going to increase losses at dealerships…



Obviously. I can’t say, increase the losses, but one thing is clear—we will be having an opportunity lost. As of now, it looks like if May is back on track, we could at least break even for the full year, and it may not go towards a loss. But, this is provided that May is open.



In the current situation, how are the dealerships going to manage the manpower?



Since the COVID happened last year, we have been working on a lean manpower. Those migrant or rural workers who went home and didn’t return, we didn’t replace them. So, as of now, we are working with lesser manpower. Normally 80 per cent of the manpower at dealerships is skilled. A month of lockdown will not be a big issue and we will be supporting them fully. But, if it (lockdown) extends further, dealerships will have to see how to stay afloat.



Today, there is a lockdown in one state. Other states could follow with similar restrictions. How do you think things should be handled in such a scenario to avoid the stress?



I feel some kind of permutation and combination, where you restrict the crowd to assemble, will be a better way out than going ahead with a lockdown. We are allowing buses and trains with 100 per cent capacity, but not opening a showroom with even 50 per cent capacity. This is not the right way. Last year, when the unlock began, there were staggered openings, timings were restricted. I feel, those are the better things. Our dealerships are huge and normally, social distancing is not a problem. Restrictions where everything is open also—while not operating at full capacity—then we can control the COVID spike and at least, let every businessman run on his own.



Most automakers now have digital sales platforms. How’s the customer response and can it offset at least some of the business lost due to the closure of showrooms?



In India, two-wheelers or cars are aspirational purchases. Normally, people want to go to showrooms personally, touch and feel the vehicle and then buy. You can’t force them to do everything digitally. But, because there are lockdowns, they start with digital channels. We may not be 100 per cent successful, but even if we are 70 per cent successful in retaining our customers digitally, it will be a win-win for both of us.



Should people in automotive dealerships be also considered essential and get them vaccinated and open the showrooms?



We have written to the prime minister, health minister and even written to our co-association bodies like CII and FICCI that this should be supported. No essential service can work without us. Whether it is e-commerce, ambulance or transport, you need us on the ground. If a doctor is on the way to a hospital and the car breaks down on the way, who will he call? So, we had written to everybody that we should be allowed vaccination. But, there is no response from anybody so far.




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