The Federation of Automobile Dealers Associations (FADA) has written to Prime Minister Narendra Modi seeking immediate financial support from the government for the ailing sector amid the nationwide lockdown due to coronavirus pandemic. In its letter to the prime minister, FADA sought a complete waiver of interest on all category of loans from banks and NBFCs for the lockdown period. We had a word with Vinkesh Gulati, VP, FADA to discuss on the letter and the impact of Coronavirus on the auto dealerships.
The industry body, which represents around 15,000 auto dealers, also sought extension of 4 per cent interest subvention/subsidy for working capital/loan requirements to companies for a period of nine months post the lockdown.
FADA sought that the salary of people employed at the dealerships during the lockdown period should be paid through ESIC. The industry body has sought measures like GST cut on automobiles, incentive-based scrappage policy and priority sector tag for the sector to boost demand post-lockdown period.
FADA said the auto industry has already been reeling under a severe slowdown for the last 15 months, with more than 275 dealerships already shut, resulting in huge job losses.
Over the years, the auto dealership business model has come under severe strain with increasing costs and low operating margins, thereby reducing the sector's strength to face challenges like the current situation and its after-effects.
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