Resilient auto industry has survived the pandemic by managing finances prudently: FADA

The Covid-19 pandemic has had a marked impact on automobile dealers: FADA

The resilient industry has survived the pandemic by managing finances prudently and restructuring the overall dealer business, Vinkesh Gulati, President, Federation of Automobile Dealers Association (FADA) has said at its third retail conclave.

“However, the pandemic and the exit of several prominent auto OEMS has hurt the dealers extensively," he added.

“The Covid-19 pandemic has had a marked impact on automobile dealers. Many dealerships are family-owned small, mid-sized businesses and partnership firms. While the government has done a lot to promote the viability of the sector, we request it to consider protecting the auto dealers’ rights who have been impacted by the unexpected exit of MNCs with whom they had signed up as long-term partners. Giving industry status will create a sense of equilibrium in this industry,” he said.

“The auto retail sector employs over 45 lakh people. It contributes Rs 95,000 crores in direct and indirect taxes and other levies to the Central and State exchequers. The sector has a minimum set-up cost of Rs 1,50,000 crores; 60,000 acres of own land and an investment of Rs 2,25,000 crores. In fact, the auto retail sector is the largest sector in the country and every state’s economy. The enormous size and potential of this segment of retail sector can be gauged from the fact that auto retail is three times the size of rest of the organised retail,” he added.

Union Minister of Heavy Industries, Mahendra Nath Pandey, acknowledged the significant contribution made by the dealers’ community to the auto industry and economy and said: “The auto industry should play a vital role in making India a manufacturing hub. The Indian government has been making efforts to promote India as a global business-friendly destination. We are promoting clean, green and Atmanirbhar Bharat campaigns in India and revitalising the green mobility movement.”

Additionally, “he urged the automobile industry to continue making efforts to make India an Atmanirbhar manufacturing hub not only for India but globally and to contribute to the success of the government's Automotive Mission Plan 2026.

“Industry status will give us better financing options in terms of priority lending from banks, financing from top lenders, private equity investments, easier access to domestic and global funds and more tax benefits. This will boost the confidence of the sector immensely and will result in the scaling up of infrastructure bringing in new investments to make the sector foster growth," he added.

The conclave witnessed a series of panel discussions on optimisation, reinforcement and agility of the dealerships. The key topics for the power panel discussion were ‘Strengthening our Relationship’ and ‘Future of Auto Retail’.