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Car dealers buckle up: Consolidation and cost cutting are now inevitable. Maruti could lead the way.

Auto dealerships are bearing the brunt of the current crisis. Smaller dealerships are on the brink and soon many may be forced to sell out to the larger ones. With revenue from service and spare-parts majorly hit, it has become imperative for dealerships to look at hard measures such as reducing costs to make the business sustainable.
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rajivghosh
24 Jun 2020 4 Mins Read 4 comments
A shot of a Maruti showroom after the outbreak; photo credit: Maruti Suzuki via Flickr
A shot of a Maruti showroom after the outbreak; photo credit: Maruti Suzuki via Flickr
The Indian auto industry was already limping when the Covid-19 pandemic struck. A lumbering economy was keeping customers away from the showrooms, while new safety and emission norms were gradually adding to the cost. The industry ended 2019 with sales declining the most in two decades. A pandemic-hit economy has further shackled discretionary spending. The Indian auto industry
said than done. Dealerships have invested significantly in a certain location and, therefore, shifting to another one to optimise rentals may not be viable. Landlords are also not willing to reduce rentals, and a few have waived rentals only for the lockdown period. It’s survival of the fittest for both automakers and dealerships. (Graphics by Mohammad Arshad)
The Indian auto industry was already limping when the Covid-19 pandemic struck. A lumbering economy was keeping customers away from the showrooms, while new safety and emission norms were gradually adding to the cost. The industry ended 2019 with sales declining the most in two decades. A pandemic-hit economy has further shackled discretionary spending. The Indian auto industry said than done. Dealerships have invested significantly in a certain location and, therefore, shifting to another one to optimise rentals may not be viable. Landlords are also not willing to reduce rentals, and a few have waived rentals only for the lockdown period. It’s survival of the fittest for both automakers and dealerships. (Graphics by Mohammad Arshad)

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