COVID-19 might force auto dealers to look for new biz models_ FADA

April 2020 a month to forget: FADA

COVID-19 might force auto dealers to look for new biz models_ FADA

Federation of Automobile Dealers Associations (FADA) said it was looking towards opening of the lockdown and resuming business again at the earliest without compromising citizen safety after witnessing zero sales in April. FADA President Ashish Harsharaj Kale said, “April 2020, will be a month which the entire automobile industry would like to forget and implore that such a time never comes again in future. The entire country is under lockdown, the complete automobile ecosystem has been affected, right from the dealer to manufacturer to component manufacturer everyone. This is the first time ever in the automobile history that there has been no sales/zero sales, it is a difficult moment for all of us in the automobile community. we look forward towards opening of the lockdown and resuming the business again at the earliest, without compromising citizen safety.”

He added, “Auto sales have a multiplayer effect in the economy, it not just contributes 8% to the GDP but it contribute to entire economy benefiting many connected sectors such as Banks, Insurance Companies, Service, sale of Components, Oils, Paints, glass, plastic and rubber and many more along with generating huge direct as well as indirect employment.”

“To resume business the entire automobile ecosystem has to come back to business as any of the members of the ecosystem if left out in lockdown condition will have a significant impact on the entire ecosystem, as the entire system is inter dependent”, he further stated.

Going forward, we need to see how much of demand will be affected but it is expected to be significantly lower and the industry will require enormous government support immediately after the lockdown, to get the demand back on track. We had put forward few suggestions to the government in support to regain the positive sentiments & demand, we have requested for a reduction in GST rates for a temporary period till the time demands and market comes to normalcy, considering automobile sector is the highest taxed sector, alternate to GST could be a direct benefit to consumers in Interest Rate Reduction through Banks and NBFC’s. ending up in reducing the overall cost of ownership.

Other important recommendations includes the immediate introduction of long-pending attractive incentive-based scrappage policy, which can work as a demand revival tool at this different time. The government should include auto industry in Priority Sector, so that both retail and wholesale financing can be made available easily, helping the banks allot a certain portion of their funds for this sector. Extend Depreciation Benefits scheme which was valid till 31st March’20 to be further till FY 2021 along with similar benefits be allowed to individuals.”




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Deepika Chauhan

Hello, I am Deepika Chauhan an automobile enthusiast. Presently working as a Media Manager and Writer. My aim is to guide and teach ways to manage, grow and scale business.
Earlier, I have been a part of Asian News International (ANI) as a Sub-editor cum Producer.

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