Sales of passenger cars by automobile companies declined by 40% in the April-June quarter this year as compared to last year. As a result, 250 dealerships have closed in the last 18 months. As a result, over 25,000 people have become unemployed.
Vinkesh Gulati, vice-president of the Federation of Automobile Dealers Association (FADA), said it was difficult to estimate the losses incurred by automobile companies. But as a result of this crisis, about 250 dealerships have closed in the country in the last one and a half years. Most of their dealerships are in cities like Mumbai, Delhi, Chennai, Pune. More than 25,000 people have lost their jobs due to its closure. To be clear, not all auto companies are profitable right now.
Automobile companies have found a way to overcome this crisis. So far, the plants are usually closed only once or twice. Pretty much for cleaning and annual maintenance. But now the plants of almost all the companies have been reducing production by black closure since January. One of the reasons is lack of space. The question is where to build the cars and keep them.
The situation of dealers is similar to these companies at present. They have stockpiled so much that they cannot afford to buy vehicles from the plant. In May this year, 7 companies had done black closure. Also in June, four or five companies went black. It was also reported that there are 3.5 crore cars in stock in the Indian market.