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Goa’s auto sales in the slow lane

Shoma Patnaik | NT

Panaji: With demand at a low level, the state’s normally buoyant automobile business has currently hit the brake pedal in sales.

President of Goa Automobile Dealers Association (GADA) Prashant Joshi, speaking to this daily Thursday, said that most local dealers are doing badly, thanks to the slowdown in car and two-wheeler sales.

He said that the automobile market in Goa is witnessing a slump with dealers unable to meet the cost of running showrooms and caught in Goods and Services Tax (GST) woes. 

“There is not much of money in the Goan economy because of the mining closure and poor tourist footfalls and it has affected our business,” said Joshi. He added that banks, fearing the onset of full-fledged recession in the automobile industry, have become extremely strict in lending and are adding to the problem faced by the dealers.

To beat the slowdown, the dealers association is asking for a reduction in the road tax by as much as 50 per cent to boost sales. On August 14, members of GADA met the Transport Minister asking for a decrease in road tax until December 2019 for the incoming busy season. “We are only asking for a temporary reduction in tax for about four months to tide over the present lean period. The government has not assured us of anything but we are awaiting the response,” said Joshi hopefully.

According to Goan automobile dealers, average sales volumes per month are almost 30-35 per cent down than the

normal sales. Auto dealer Pradeep Naik, Margao, has witnessed a higher sales decline in the range of 40-45 per cent. “Two-wheeler dealers are feeling the pinch more, as they do not have service income unlike car dealers,” said Naik. He claimed that the local dealers have started laying off staff to cut down on the operating cost. There are reports of three dealerships closing down.

Meanwhile, the news coming in from other states is equally depressing. All India auto sales are said to be down for three quarters in a row with average 31 per cent drop across all segments in July 2019. It is the most vigorous downturn, according to manufacturers.

In Goa, GADA said that registration of new vehicles dropped 33 per cent in 2018-19, to 57,393 vehicles from 86,119 vehicles in the previous year. The decrease is being considered a deviation, as the automobile market in the state has always been brisk. 

“If the market does not improve during the approaching Ganesh Chaturthi festival, which is a period of booming sales, then we are in serious trouble,” said Naik.

On the other hand, new dealerships of premium vehicles are opening up in the state. In recent months, MG Motors launched new showrooms and it is learnt that Kia Motors has finalised a dealer partner and is ready to open a showroom.

Joshi said, “New showrooms are of manufacturers, who are making a presence. Initially they will have sales but the market presently does not look good.”   

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