There are an estimated 1000 plus CV dealers in India. These are franchises of six or seven CV majors. Chances are that there are more CV dealers if those catering to regional and local brands were to be taken into account. Even those that cater to the rising count of e-rickshaws among others. Most are in varying degrees of distress are facing the economic slowdown of 2019 and the Covid-19 situation of 2020. Their reason for distress may vary, but distressed they are for certain. A chat with Piyush Jain, a Mumbai-based SML-Isuzu dealer, revealed that he is badly affected. Eagerly waiting for the school season to start as a big chunk of his CV sales comes from school buses, Jain is very worried. “We have had no sales for the last four months,” he expressed as a matter of fact. Informing that the pandemic unleashed itself exactly when the school season begins, Jain averred that if such conditions persist for a few more months, it would be extremely difficult to stay in business.
The bus operators, it is no secret, have been the worst affected when compared to the truck operators. Most suffered from having their buses rendered inoperative during the two months of what is described as the world’s most brutal lockdown.
The ‘unlockdown’ that was announced by the government on July 01, 2020, has not led to a cheerful situation with the number of Covid-19 positive cases spiking. Having crossed the 31 lakh mark with 60,975 new cases, India has come to rank a close third after Brazil and US. For bus operators and truck operators, it in no way spells good news as they grapple with lack of any relief from the government and witness little freight or people-travel demand. With no CV operator in a position to even think of purchasing a new CV, except the very big players and those who have vehicles that are absolutely at the end of their life, CV dealers are clearly under much distress.
As CV makers make efforts to resume production (see box) and restore their supply chain, it is the CV dealers that will take more efforts to get right, it seems. This is especially proving to be a challenge for full-range CV makers. “Our operational costs, which include interest payments, staff salaries among others are turning out to be unsustainable. The 30 percent revenue from service is just about helping to stay afloat,” said Jain. “The loss we continue to incur every passing day is spiraling such that we will have to decide if we should shut down the business very soon,” he added.
Prioritizing to retain their skilled manpower, dealers are finding the going tough. Expressed A. Rajan, General Manager (Sales & Service) at Anamallais Agencies (Stadium), said that they are experiencing hardly any demand in bus and truck segments. Staring at the first half of the current fiscal as a complete washout, Rajan is not certain if the upcoming festive season will bring any cheer. The malaise he fears has run deep and will take a long time to eradicate. Stressing on the fact that the pandemic has thrown the business of many of their customers out of gear, Rajan remarked that there is an acute cash crunch. Receiving a lot of inquiries about BSVI vehicles and if they would support higher profitability in the wake of the challenges many CV operators had come to face post the announcement of new axle norms by the government in late 2018 and the subsequent economic slowdown in 2019, CV dealers have been left high and dry. Said Bharat K. Patel, Partner, Trishul Motors (a VECV dealer), that the pandemic has drastically altered their business equation.
Tejpal Ailsinghani, Managing Director, Kamal Motors.
Of the opinion that the lockdown has ended their story, Patel expressed that they are facing a terrible liquidity crunch. In fact, many dealers that CV magazine spoke to, on the condition of not revealing their identity, mentioned that they have received help from no quarter. Neither from their dealer principal, not from the government, which gathers so many taxes from them under one pretext or the other. Stating that it would be almost impossible to get back on their feet in the current financial year, Patel averred that the rot has run deeper than many experts have come to gauge. Operating four service centres and two showrooms with an employee strength of 250, Patel is prioritising the retention of manpower as well.
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