Automobile dealerships are cautiously optimistic, expecting flat or moderate growth in the festive season after suffering twin blows of demand slowdown due to macroeconomic challenges and the impact of the coronavirus pandemic, according to ratings agency ICRA.
Across India, the automobile dealerships continue to face tough times. They are among the worst impacted segments within the entire automotive value chain, ICRA said in a statement.
After witnessing a sharp 75-90 per cent decline during Q1 FY2021 across the automotive sub-segments, wholesale dispatches are on a recovery trend with certain segments like two-wheelers (2W) and passenger vehicles (PV) registering year-on-year growth in the wholesale volume during September 2020, it added.
However, retail demand continues to remain weak, indicating wholesale dispatches are resulting in inventory build-up at dealerships, ICRA said.
Citing a survey done by the ratings agency across PV, 2W and the CV (commercial vehicles) segments