Zoom Gloom: Over 250 Automobile Dealerships Shut Down In Past 18 Months!

The Indian automobile sector is facing its worst slump ever. Sales have dropped by 14 per cent overall, year-on-year, in 2019 and this has led to car manufacturers suspending production and sitting with piles of inventory.

According to Federation of Automobile Dealers Associations (FADA) data published in The Times of India, a staggering 245 passenger car dealerships have shut down in the last 18 months. City-wise, the number of dealerships closed as follows:

Mumbai – 34
New Delhi – 27
Pune – 24
Chennai – 15

Manufacturer-wise shutdowns:

Nissan – 44 (Company claims 25)
Hyundai – 39
Renault – 20
Tata – 20
Mahindra – 20

Also read: Car Manufacturers Put Brakes On Production, Rs 35K Cr Inventory Unsold

However, some car manufacturers claim dealerships closing and opening is a natural process. Financiers blame banks tightening their grip on working capital loans, tight liquidity, channeling of funds to real estate by dealers as reasons for failure. A dealer typically invests Rs 60-80 crore for an automobile dealership, the report said.

Around 27,000 people, directly and indirectly, have lost their jobs, the reports indicate.


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