Kale said there were an unusually high number of dealership closures, especially in the metros and Tier-1 cities. A substantial number of closures were because of accumulated losses and reduced access to working capital needs.
The dealers want the government and the RBI to categorise auto retail as a separate category of credit.
Fada said two-wheeler sales in April fell 9 per cent to 12.85 lakh units against 14 lakh units a year ago. Commercial vehicle sales fell 16 per cent to 63,360 units.
Car dealers are concerned over the limited availability of credit that is impacting sales as they prepare to make a representation before the new government at the Centre over their liquidity problems.
The dealers body — Federation of Automobile Dealers Association (Fada) — on Wednesday released their sales data for April, which show retail sales of passenger vehicles declining 2 per cent 2.42 lakh vehicles in the month against 2.47 lakh vehicles a year ago.
“Fada is extremely concerned at the dealer liquidity which continues to remain very very tight and access to working capital for dealers has reduced further with the banking system taking a negative view towards auto retail in the current circumstances,” the president of the dealer body, Ashish Harsharaj Kale, said.
The dealers fear they are facing the backlash of the liquidity crisis among NBFCs and want the government to take measures to stem the fall in credit to dealers and customers.
The Telegraph
