DEALERS IN DISTRESS
Commercial Vehicle|September 2020
CV dealers are a worried lot with business witnessing a significant dip.
Deven Lad

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.

PRIORITIES

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.

Continue reading your story on the app

Continue reading your story in the magazine

MORE STORIES FROM COMMERCIAL VEHICLEView All

New BEST e-buses?

Brihanmumbai Electric Supply and Transport (BEST) has commissioned 25 new e-buses of Tata Ultra Urban 9/9 make, claim sources.

1 min read
Commercial Vehicle
January 2021

TUSIMPLE SELF DRIVING TRUCK

TuSimple’s self-driving semi-truck is set to revolutionise the freight transport industry in the US.

5 mins read
Commercial Vehicle
January 2021

The age of value Trucks

The age of value trucks is here.

10+ mins read
Commercial Vehicle
January 2021

OMEGA SEIKI MAKES THE MOVE

Maker of Rage e-cargo three-wheelers, omega seiki has inaugurated its first dealership in india.

5 mins read
Commercial Vehicle
January 2021

SONALIKA ELECTRIC TRACTOR

Hot on the heels of the announcement that it has crossed the one-lakh annual tractor sales for the third consecutive year, the Sonalika Group has unveiled a field-ready electric tractor called the ‘Tiger Electric’.

2 mins read
Commercial Vehicle
January 2021

Mercedes-Benz trucks win 2021 Truck news

Mercedes-Benz Trucks has won the 2021 edition of the Truck Innovation Award for its electromobility solutions involving the eActros battery electric heavy-duty truck, which is scheduled to enter series production this year, and the Mercedes-Benz GenH2 Truck, a hydrogen-based fuel-cell electric concept truck, which will start operational customer trials in 2023.

2 mins read
Commercial Vehicle
January 2021

FM Logistic India warehouse

FM Logistic India has announced a plan for new intra-city, multi-story warehousing units in Mumbai, Delhi and Bengaluru to meet the rising e-commerce sector warehousing needs.

1 min read
Commercial Vehicle
January 2021

ELECTRIC THREE-WHEELERS GAIN MOMENTUM

Electric three-wheelers gather momentum, courtesy the involvement of bigger players.

6 mins read
Commercial Vehicle
January 2021

ELECTRIC CVS ACCELERATE

The Covid-19 pandemic seems to have accelerated the shift to electric CVs.

10 mins read
Commercial Vehicle
January 2021

CRASHES TO CRASHES

America’s wild west is a land of history and mysteries when it comes to tin-hunting.

6 mins read
Commercial Vehicle
January 2021
RELATED STORIES

LiDAR MAPPING A GOLD MINE

When Consolidated Gold Mine in Dahlonega, Georgia, wanted to open more of its areas to public tours, they asked Inspired Intelligence, a family owned and operated drone business in Buford, Georgia, to help. Inspired Intelligence CEO and founder Nir Pe’er explained, “Besides drone technology, we also used new, amazing cutting-edge technology called LiDAR.

3 mins read
RotorDrone
February/ March 2021

CREATIVE TOOLS

How four master builders defined the path of the 2021 BMW R 18

3 mins read
Cycle World
Issue 4 - 2020

The Prodigy

Yoyo Chang turned a hunch born in an English high school cafeteria into a next-generation payments app backed by serious, well-heeled investors

10+ mins read
Bloomberg Markets
December 2020 - January 2021

The Fintech Revolution Is Finally Here— And So Are the Regulators

SPEAKING IN OCTOBER to his banking brethren at the world’s biggest payments confab—the annual Sibos conference— Jamie Dimon didn’t mince words.

4 mins read
Bloomberg Markets
December 2020 - January 2021

HOSPITALS CAN CARE FOR MEDICARE PATIENTS AT HOME IN PANDEMIC

Hospitals will be allowed to care for Medicare patients in their own homes during the pandemic under a government program announced Wednesday to help hospitals deal with the latest surge.

1 min read
Techlife News
November 28, 2020

GLOBAL TECH GIANTS THREATEN TO LEAVE PAKISTAN OVER NEW RULES

Internet and technology companies have threatened to leave Pakistan after the government granted blanket powers to authorities to censor digital content, a move critics say was aimed at curtailing freedom of expression in the conservative Islamic nation.

1 min read
AppleMagazine
AppleMagazine #474

LIGHTS, CAMERA, SELL: RETAILERS WANT YOU TO WATCH AND SHOP

When Jenna Powell gets in front of a camera, she can sell $10,000 worth of sparkly dresses and tie-dye hoodies in 40 minutes.

4 mins read
AppleMagazine
AppleMagazine #474

PFIZER: COVID-19 SHOT 95% EFFECTIVE, SEEKING CLEARANCE SOON

Pfizer said this week that new test results show its coronavirus vaccine is 95% effective, is safe and also protects older people most at risk of dying — the last data needed to seek emergency use of limited shot supplies as the catastrophic outbreak worsens across the globe.

3 mins read
Techlife News
November 21, 2020

SAL'S POLIKARPOV I-16

Valery Chkalov Red Five

2 mins read
Model Airplane News
December 2020

TAIWAN PROCESSOR CHIP MAKER TO SET UP $3.5 BILLION U.S. ARM

A Taiwanese maker of processor chips for Apple Inc. and other customers plans to invest $3.5 billion to set up its second U.S. manufacturing site amid American concern about relying too heavily on sources in Asia for high-tech components.

1 min read
AppleMagazine
November 13, 2020